The latest word from the trenches...OWP http://www.websitetoolbox.com/tool/post/sdcia/vpost?id=1382618 I think that the "experts" should just spend one week in my office observing the financial profiles of our refinance applicants. I believe their outlook would be much different. Most people simply cannot believe the profiles that we see. I am the sales manager of a branch office of a top-10 national lender. My office of 7 loan officers takes +/- 100 loan applications per week, 90% of that coming from cold calls. Of the last 100, I have taken some simple statistics and have found the following: * 68/100 had LTV's over 80% at time of application * 16/100 had LTV's over 100% at time of application * 78/100 had back end DTI's over 55% * 31/100 had back end DTI's over 70% * 23/100 had FICO's under 500 * 81/100 had credit card debt above $10,000 * 54/100 had credit card debt above $20,000 * 18/100 had credit card debt above $50,000 * 66/100 had Pay-option ARMs * 27/100 had Pay-option ARMs and mortgage lates * 22/100 were either in forbearance or had been in forbearance within the past 12 months We took 14 applications today and we cannot qualify a single borrower for any type of loan. We are sub-prime, in fact, sometimes I say we are sub-sub-prime. We can qualify almost anyone for a loan. Not today. Let me tell you about just one borrower from today: * Husband and wife * Husband on fixed income military retirement $1800/mo * Wife makes $9500/mo as a registered nurse * 5 properties with $3,400,000 in mortgages * All mortgages currently have prepays * 8 interest-only mortgages * 1 option ARM deferring $3500/mo * 3 in Chula Vista and 2 in Escondido * No more than $75,000 equity in any of the homes (verified by comp checks with 3 appraisers) * All properties with front end LTV over 90% * $65,000 credit card debt $672 Mercedes payment * One property had 3 mortgages, one of them hard money * 621 mid FICO * 2x30 in the past 12 months * Not a dime in the bank They have been making mortgage payments with their credit cards and refinancing to pay off the credit cards. They are at the end of their rope, but refuse to throw in the towel. This is not even an "extreme" example. I could show you dozens of these every single week. I just wish the experts would see what I see. I think the statistics released would be different. Granted, I only see applications from San Diego and Imperial Counties, but this is just getting out of hand. I will say this without any hesitation: 9/10 borrowers who currently have Option ARMs have no real understanding of what their loan is doing. I have had more than a few old ladies cry in my office when I show them the amount of deferred interest on their loan. They were careless enough to sign a bad loan (ultimately the responsibility of the borrower to read the docs before signing), but it doesnât help that every hack broker out there is pitching the option arm just because the rebate is so high. Almost daily I see 70-year-old+ borrowers who used to owe $50k on their home now owing $600k on option arms.
interesting chart ... www.millersamuel.com/charts/gallery-view.php?ViewNode=1158169201CoMzo&Record=35
There's been a fair amount of new construction in Manhattan (primarily in fact almost exclusively condos.) This phenomenon probably explains to a great degree the interesting findings of the chart.
There is a neat mortgage broker commercial here where he says get a $500,000 1% fixed for five year loan and pay only $1200/mo. They repeat it three times, like that stupid "HeadOn" commercial to make sure you get the point. The actual apr in real small print just to be legal. Personally, I think the guy belongs in prison for the screw job he's giving people. Lots of dumb people out there to take advantage of their ignorance. Nice stats... goes to my point that a lot of recent purchasers will not be able to roll to fixed loans to save their behinds.
that chart has already been debunked - the most obvious issue is the time-frame the chart used. The data domain is not very impressive....
i really don't mean to be 'that guy', but the NAR is a sales organization. I know they release data that Wall St. loves, but how can anyone think their data is not biased in some way?
Can you get RE data from other sources? Price trend is more important than prices in the data. I don't think they would distort price trend too much.