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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (16325)	7/8/2004 3:18:01 PM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 110194

"Fannie Mae and Freddie Mac have a stock price to keep up," suggests Reed, "so they have to expand their homeownership rate, and you wrap that around homebuyer assistance programs and all these state and federal bond agencies that help people get in homes, which is a great thing. But that means providing a mortgage that we can eventually make money loaning, and if you can't qualify, now you have to buy mortgage insurance. ild, what is your positioning on mortgage insurers these days? do you expect them to take the brunt of an RE fallout? Alan Greenspan, who suggested in remarks made in June that "to the degree that households are driven by fears of payment shocks but are willing to manage their own interest rate risks, the traditional fixed-rate mortgage may be an expensive method of financing a home." what an amazing statement from the economic leader of the free world. for the average boob who's financing at 97% LTV with a 5/1 ARM, what the hell does "managing their own interest rate risks" really mean? they have no clue, except that their immediate monthly payments are lower. the only "management" is to hope rates don't go up. Once that snowball starts rolling, it will be up to the appraisal industry to stop it. AVMs. in widespread use right now can be made to say almost anything." what is an AVM and what does that last sentence and a half mean?