Tuesday, April 04, 2006

Tighter lending standards = less buyers

If the housing opportunity index (affordability) for Los Angeles is 2 (The percentage of new and existing homes sold in the fourth quarter of 2005 that were affordable by a family earning the metro area’s median income) and lending requirements are tightened, who will be left to buy the $500K-$700K "starter" homes.

Read this to judge for yourself if defaults & foreclosures are going to influence lending and the housing market. Beware: some of the #'s are shocking!
First Federal's reliance on mortgages that allow for reduced payments at the start raise concerns among regulators and analysts.

Can OTS manuevers force lenders to hold back more reserves and shrink the money supply and pressure a recession?


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