Homestead mailing list

[Gene GeRue <genegerue AT ruralize.com>]

> > An unanswered question remains, he acknowledged: "We have no experience 
> > of how these loans will perform when the market is weak."
>
> Oh really?  I wonder if he can take a wild guess.

Indeed. His answer is either an outright lie or he is incompetent. Even my 
imperfect memory clearly recalls when southern California had lots of 
over-financed places after the big defense budget cutbacks caused 
widespread layoffs and PhDs were pumping gas. Foreclosure rates under 
varying conditions are well established.

Very-high-percentage mortgage loans require very good credit scores, OR a 
government program to insure or guarantee them, in which case we taxpayers 
act as insurance underwriters. Non-government loans with less than 20 
percent down payment require private mortgage insurance with the premium 
paid by the borrower. To beat that, it sometimes makes sense to use a 20 
percent second, with attendant higher interest rate, to get the 
no-mortgage-insurance first loan. There are a gazillion mortgage plans, one 
to fit every purchaser. Rely on a good mortgage broker to help you make the 
decision of what is right for you. Know what you will do if you lose your 
income, with the knowledge that a foreclosure will probably wreck your 
credit score.