Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: CalculatedRisk who wrote (33496)	5/30/2005 6:35:03 AM
From: Wyätt Gwyön	Respond to of 110194

re: IO loans... "They pose a great threat to the economy. They are likely to make any recession much deeper." but the perverse argument is that IO loans are "safer" in a recession because they reduce cash flow demands, allowing consumers greater disposable income net of "mortgage" payments. true enough, if one pretends IO has no systemic effects (on raising overall housing prices and debt) and that people will prudently underbuy relative to their IO paying capability. war is peace!

To: CalculatedRisk who wrote (33496)	5/30/2005 11:56:06 AM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

Said Williams, the acting comptroller of the currency: "We've produced a new class of lenders willing to take on riskier and riskier borrowers at a very high price. Many of the products are nothing more than time bombs." Fannie Mae, the home loan giant, has devised several programs to help distressed homeowners. It also has started its "American Dream Commitment," which aims to drive the percentage of homeowners still higher. Spokesman Alfred King acknowledges that many lower-income homeowners are experiencing troubles but says his company has no plans to temper its homeownership push. "Sure, some people are being done a disservice when they get mortgages when they are not ready for it," he said. "But the desire for ownership is there. And there's compelling evidence that there's probably a mortgage product that works for them." msnbc.msn.com