Subprime Assessment

Here's one of the better short articles I've seen on subprime mortgage problems.

From the article:

Now there is a lot more that I can get into here, but I wanted to just briefly focus on what I see as the key issue that has made the word "subprime" sound like "Long Term Capital Management" -- namely, the availability of 100% financing.

I have no problem with 100% financing when you're talking about a big screen TV or maybe a nice sectional, but 100% financing for a home is asking for trouble if you ask me. Even worse is allowing subprime borrowers to use 100% financing. Of course, I'm not just talking about full 100% loan-to-value [LTV] loans, the same applies to the so-called piggy-back loans that provided 100% financing through 80/20 or 90/10 paired loans. And don't even get me started on 110% LTV loans...

Housing Valuations

I found this article interesting - in particular the map showing housing overvaluation concentrated along the east and west coast, with prices in the interior of the country more reasonable.

Housing Stats

Here's a link to some housing stats.

In the first graph look at all the Adj.Rate Mortgages yet to reset to their new rates - we're not yet to the peak... In the second graph: the time to completion of a sale of residential property (6mo) is at it's highest level since 1994... Unsold inventory has doubled in a little over 3 years... and nationwide home prices are declining.

If I was shopping for a house (not that I am, but thinking out loud) I'd be thinking there might be some steals a couple years out.

Housing Value Roller Coaster

This is cool.

US Real housing values over time, converted into a roller coaster ride.

Here's a link to the graph of real home values showing the unprecedented recent rise we've experienced.