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	<title>Comments on: Wrestling with houses</title>
	<link>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/</link>
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	<pubDate>Sat, 06 Sep 2008 03:17:12 +0000</pubDate>
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		<title>by: Carlomagno</title>
		<link>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-20031</link>
		<pubDate>Wed, 07 May 2008 15:12:58 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-20031</guid>
					<description><![CDATA[@Stacy-Marie: Thanks but just to be clear I wasn't making any claims about prime mortgages.

NB that sub-prime, Alt-A and jumbo loans accounted for over 50% of US mortgage originations in 2006.

BTW, NY Fed publishes stats about a sample of subprime and Alt-A loans here:

http://www.newyorkfed.org/regional/US_Mar.xls

(More stats here: http://www.newyorkfed.org/regional/subprime.html)

Which, if I read it correctly, indeed suggests that the Alt-A pool Mish is tracking isn't representative.]]></description>
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		<title>by: Stacy-Marie Ishmael</title>
		<link>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-20029</link>
		<pubDate>Wed, 07 May 2008 13:22:25 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-20029</guid>
					<description><![CDATA[@Carlomagno - a snippet from a CreditSights report out of their recent Credit Crisis Conference in NY:

- The key characteristics of Subprime and Alt-A mortgages are higher original loan-to-values, a greater proportion of non-owner occupied properties, lower FICOs, weaker documentation and greater exposure to mortgage rate resets.

- We argue that the first three - loan-to-values, non-owner occupied and FICOs - are possible markers of peoples' propensity to default rather than their being forced to default.

- Cities with high levels of weak documentation mortgages and adjustable rate mortgages, especially those that have already reset, have higher levels of defaulted and delinquent mortgages.

- According to our characterization of the five key identifying traits, this suggests that homeowners are being forced to default by payment shocks rather than deciding to default as a result of negative equity.

-If this is correct, then the stronger financial positions and better documentation of prime mortgages means predictions of subprime like default numbers in prime should be exaggerated.]]></description>
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		<title>by: Carlomagno</title>
		<link>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-20015</link>
		<pubDate>Wed, 07 May 2008 10:53:13 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-20015</guid>
					<description><![CDATA[On the Alt-A disaster, check out Mr. Mortgage:

http://tinyurl.com/3hlt6k

Also, check out these stats on negative equity in the US:

http://tinyurl.com/5d45ba

With a combination of widespread negative equity and a large numbers of option/negative amortisation ARMs still to reset to higher payments, it's likely that foreclosures will rise for the foreseeable future, putting further downward pressure on prices. The death spiral continues.]]></description>
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		<title>by: harry e</title>
		<link>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-19931</link>
		<pubDate>Wed, 07 May 2008 09:49:36 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-19931</guid>
					<description><![CDATA[On John Authers Short View, a graphic was displayed that showed a "correlation between the tightening of bank lending and house prices".

Closer inspection of that graphic shows house prices to begin falling shortly before bank standards are tightened...which is contra received wisdom that the credit crunch is causing house prices to fall. Either there are lags in the information that cause this reversal, or it is that banks tighten lending standards when they perceive the assets may not cover their loans at a future point.

Indeed, house prices in the UK also began to soften according to the Nationwide index at least 2 months ahead of the onset of the credit crunch in August of last year. 

And yes, wrt the article above as asset prices fall, defaults will be absolutely massive in Alt-A and for good measure over here too. Look ahead to even more bank rights issues a year or so out and then finally, a proper bailout by the state.]]></description>
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		<title>by: burnt quant</title>
		<link>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-19930</link>
		<pubDate>Wed, 07 May 2008 09:38:59 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-19930</guid>
					<description><![CDATA[What is they typical subprime property and more importantly who is the natural market for these properties? 

Where are they going to get the buying power to purchase them at prices even 20% lower than the peak now that there's no Alt-A or teaser loans?

Using conventional credit (i.e. traditional mortgages) what can this market segment pay for their homes? That surely is where there will be support for prices and no higher. And after possibly years of declines who will even want to pay those levels?

Sequel to subprime is Alt-A, possibly followed by Jumbo loans.]]></description>
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		<title>by: Anonymous</title>
		<link>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-19928</link>
		<pubDate>Wed, 07 May 2008 09:16:43 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-19928</guid>
					<description><![CDATA[Let's see what happens when all the UK "teaser rates" expire this year and next. That is essentially what is happening in the USA, a year ahead of us. And look at the freefalling housing market over there.]]></description>
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		<title>by: zaphod</title>
		<link>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-19924</link>
		<pubDate>Wed, 07 May 2008 08:46:05 +0000</pubDate>
		<guid>http://ftalphaville.ft.com/blog/2008/05/07/12841/wrestling-with-houses/#comment-19924</guid>
					<description><![CDATA[Interesting how high fuel prices and water scarcity could affect many of these homeprices. In a real estate downturn the marginal properties can become unsellable, and many of these developments could end up as essentially worthless, if the cost of driving to your job is to great. Since subprime mostly went to low income workes mostly affected by increases in basic living cost, and the developments they bougt into would not be attractive to higher income workes, there could end up being no buyers  to these properties. 

Also having a golf course nearby and a swimming pool is no good if water rationing kicks in.]]></description>
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