Real Estate Crash thread

Where are these prices falling? I'd like to move there.

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Originally Posted by Benny Profane

http://www.nytimes.com/2007/07/24/bu...d-lend.html?hp


"In a conference call with analysts that lasted a lengthy three hours, Countrywide’s chairman and chief executive, Angelo Mozilo, said home prices were falling “almost like never before, with the exception of the Great Depression.” He added that because of a large number of homes on the market, the housing sector would continue to shrink until sometime in 2008 and not begin growing until 2009.Shares of Countrywide fell nearly 11 percent, or $3.56, to $30.50, the lowest the stock has been in nearly two years.

What caught investors by the greatest surprise was a stunning rise in delinquencies on home equity loans, lines of credit and second mortgages to homeowners with good, or prime, credit. Until recently, most mortgage industry officials had been saying the problems with defaults would largely be contained to borrowers with weak, or subprime, credit."

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Originally Posted by P_McPoser

Where are these prices falling? I'd like to move there.

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Who wants to live in Florida or Michigan?

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Originally Posted by P_McPoser

Where are these prices falling? I'd like to move there.

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san diego foreclosures up 551%.

close to the beach, but a yuppie shithole nonetheless :) i'll come visit whenever i interview for google.

Entry level anywhere in California <$600k is weak. Down 15&#37; easily. Houses in my neighborhood have been marked down $60k with no movement. I've easily lost $50k in equity on mine. One can buy a house in the central valley (Diablo Grande) on two world class golf courses for around $400k. It opened at absolutely the worst time. It's a stunning golf resort.

http://www.diablogrande.com

It's all good though.. Inflation next year will be nil and rates are going back down. Ten year notes could test 4% next year.

Shit is still gangbusters here under $600K...above $1.5 million is getting soft, but to the tune of 5&#37; or so...

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Originally Posted by 4matic

One can buy a house in the central valley (Diablo Grande) on two world class golf courses for around $400k. It opened at absolutely the worst time. It's a stunning golf resort.

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It opened in the absolutely worst place.

It takes you 20 minutes to get from your home to I-5. Then it's another 1+ hour to the bay area, unless you've got employment to fund a $400k home in Stockton.

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Originally Posted by 4matic

It's all good though..

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my problem is not with the housing market. after all i don't plan to own. i'm having real trouble with the fact that your pesky currency devalues faster than i can blink against real-world moneys.

even if you start rebuilding your currency's value now (which you won't) it'll still take a decade to go back to pre-somethingsomething levels.

Thank you 100&#37; financing! Wow, I can't believe this is happening ;) Our government is so rad!

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Originally Posted by skier666

Thank you 100&#37; financing! Wow, I can't believe this is happening ;) Our government is so rad!

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Well, it really isn't the government's fault. After all, we live in a very free market economy. But this:http://www.nytimes.com/2007/07/25/ny...l?ref=nyregion is clearly the government's fault, and why, if you can get out of Jersey and some other states, do it ASAP. It will be the next boomer boondoggle.


"It turns out that New Jersey will need about $58 billion, in today’s dollars, to provide all the care it has promised its current and future retirees. That’s nearly twice the state budget and nearly twice the amount of its outstanding debt. And because of the step it took in 1994, the state has virtually no money in reserve to cover those costs.

In addition, New Jersey’s towns and other local governments owe about $10 billion for health care for their own retirees."


Now, that is not a free market economy. Thank you cops and teachers.

Yeah, but the government is the one that gave the go ahead to do so....

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Originally Posted by Benny Profane

Well, I'm actually quite interested in buying something in a year or two when things bottom, but, I guess what I'm really trying to say is "fuck the ex wife" and the property she got.


And, yeah, fuck the rich, too, if they don't invite me to the party.

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PLus we dont have to mow the lawn anymore.

5% T-Bills are warm and cudly right now.

A friend of my wife's just sold his house for $1.7 million. He bought the house in 2003 for $850K. The real estate crash really scuttled him, I'll tell ya! :)

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Originally Posted by f2f

my problem is not with the housing market. after all i don't plan to own. i'm having real trouble with the fact that your pesky currency devalues faster than i can blink against real-world moneys.

even if you start rebuilding your currency's value now (which you won't) it'll still take a decade to go back to pre-somethingsomething levels.

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A $2.00 pound is not that unusual. It was higher in 1980 and not four years later, 1984, they were calling it the ounce when it went to $1.00.

What needs to happen is for Old Europe to cut taxes, lower rates, and promote economic growth which would cause currency flow to ebb back. It will at some point. It always does. There is no currency crisis. In fact, the dollar is doing well vs. the Yen and a higher Yuan will also help dollar denominated assets.

Also, a low dollar promotes European tourism too. I can't believe how many Euro's are coming over hear to ski.

"The Fed has left its benchmark rate unchanged at 5.25 percent for a year after two years of steady increases.

That contrasts with the course of the European Central Bank, which has raised rates steadily and is expected to do so again to 4.25 percent in September. The Bank of England last week increased its benchmark rate to 5.75 percent, a six-year high.
Higher interest rates, a weapon against inflation, can bolster a currency by giving better returns on fixed-income investments

I'm seeing this crash right now. I'm living it every day.

"The current rate equals one foreclosure for every 152 occupied residential units, among the highest density rates in the state. The state average is one foreclosure for every 385 occupied units." (CO State Division of Housing)

These are the forclosure stats for my county-

Year Foreclosures % change
1998 267 +53%
1999 376 +41%
2000 433 +15%
2001 557 +29%
2002 749 +34%
2003 935 +25%
2004 1,025 +10%
2005 1,032 +1%
2006 1,174 +14%

Prices in SLC are finally starting to trend down after the crazy gains in the past two years. I might be able to actually afford a house in 2008.

http://www.housingtracker.net/asking.../SaltLakeCity/

insanity continues worldwide.....





Home Craze Gazumps London With Record Prices, $500,000 Parking
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By Simon Clark


The Blairs new home July 25 (Bloomberg) -- One late-June morning in London, a real estate broker named Becky Fatemi eases into her black Porsche Cayenne and heads for Connaught Square, just north of Hyde Park.

As her sport utility vehicle turns into the square, Fatemi -- who, by her own account, handled about 55 million pounds ($113 million) of home sales in 2006 -- nods toward one of the Georgian town houses.

``This is where Tony Blair bought,'' says Fatemi, the top producer at Foxtons Ltd., the biggest residential property brokerage in London.

Through Foxtons and another broker, Blair purchased the five-story house for 3.65 million pounds in 2004, when, as prime minister, he was still living on Downing Street. Fatemi, 31, says Blair's place is worth as much as 4.7 million pounds now -- a 29 percent increase.

Blair is no real estate savant. A confluence of powerful forces from low mortgage rates to Russian petro-riches to the teeming wealth of the City of London, Europe's largest and most dynamic center of finance, has supercharged home prices across the British capital.

The average price of prime London homes, the ones brokers consider the most desirable, has soared 254 percent since 1997, when Blair's Labour Party came to power, according to London- based real estate broker Knight Frank LLP.

Up, Up, Up

Defying predictions that the market would sputter, that average rose 28.7 percent in 2006, the steepest increase since 1979, and then jumped 18 percent during the first half of this year.

These days, buyers who dillydally risk getting gazumped. That's British slang for what happens when someone arrives on the scene at the last minute and offers a higher price.

The decade-long leap in prices has made London the most expensive city in the world for high-end homes -- costlier per square foot than Monaco, New York, Hong Kong or Tokyo, according to Knight Frank, which says prime London houses cost about 5 million pounds and prime flats run about 2.5 million pounds. The most-sought-after property in areas such as Kensington and Chelsea, the priciest of London's 32 boroughs, sells for an average of 2,300 pounds a square foot, according to Knight Frank.

Comparable living space in Monaco, the world's second-most- expensive locale, costs 2,190 pounds a square foot. Similar digs in No. 3 New York fetch 1,600 pounds a square foot, according to Knight Frank.

Risks

The unprecedented surge has brought with it unprecedented risks. Blair's successor, Prime Minister Gordon Brown, must now contend with a host of dangers -- from accelerating inflation to rising interest rates, to mounting mortgage debt -- that could puncture the housing market and threaten the nation's longest period of economic growth in 200 years.

The housing market hasn't been this heady since the 1980s, when prices almost tripled. That boom, touched off by falling interest rates and rising stock prices, ended when a subsequent increase in inflation drove interest rates as high as 15 percent.

London home prices sank 27 percent from December 1988 to December 1992.

Now, the thunderheads are gathering once again. As the U.S. Federal Reserve battles a subprime mortgage crisis, the Bank of England is tightening credit to combat inflation. The U.K. central bank has raised its benchmark lending rate five times since August 2006, pushing that rate to a six-year high of 5.75 percent.

Squeezing Borrowers

Tightening credit will squeeze people who've gone deeper than ever into debt in order to buy homes. Since May 1997, the amount of U.K. mortgage debt outstanding has ballooned, soaring 168 percent to a record 1.12 trillion pounds as of May 30, according to the Bank of England.

British homeowners have never been so stretched. A decade ago, first-time buyers typically took out mortgages equal to 2.4 times their annual salaries. Today, that figure has climbed to 3.2 times. About 120 billion pounds of short-term fixed-rate mortgages may have to be refinanced this year at new, higher rates.

London, long attuned to old money and social class, is increasingly a city divided by new wealth. The capital is being split between the rich, who can afford homes, and a growing number of ordinary folks who can't. Laying out his agenda on July 11, Brown told Parliament that many people in Britain have been priced out of the home market. He vowed to build more low- cost housing.

``Putting affordable housing within reach, not of the few, but of the many, is vital,'' Brown told Parliament.

Foxtons Frenzy

No broker has fed the frenzy like London-based Foxtons, which has helped drive up prices and, in the process, its own commissions, by inflating home valuations, wooing buyers and sellers -- and pushing agents to close, close, close.

This year, Foxtons itself, along with another British property broker, Countrywide Plc, was gobbled up. The buyer in both cases was the new power in global finance: private equity. London-based buyout firm BC Partners Ltd. bought Foxtons from its founder, Jonathan Hunt, in May for about 390 million pounds. New York-based Apollo Management LP bought Countrywide in May for 1.07 billion pounds.

Hunt's exit is a bad sign, says Peter Nicholls, who sold his own London real estate firm, Royston Estate Agents Ltd., to rival Douglas & Gordon Ltd. in May for an undisclosed price. ``When Jon Hunt sells, you know the market's going to be in trouble,'' Nicholls, 44, says.

Kensington Mansion

Hunt declined to be interviewed for this story, as did Foxtons Chief Executive Officer Michael Brown, former chief operating officer of bankrupt energy trading company Enron Corp.'s European unit.

``I am happy to hand over the reins, knowing that what we have started has a very long way still to go,'' Hunt said in a May 21 statement. London's real estate mania has been good to Hunt: In 2005, he spent 14 million pounds to buy a mansion in Kensington, opposite the home of steel billionaire Lakshmi Mittal.

Hunt, 54, electrified the real estate scene by creating a snazzy company with a gladiatorial sales culture. From the moment Hunt founded Foxtons, in 1981, he never tolerated excuses from his brokers, former Managing Director Peter Rollings says.

In the early days, Foxtons' attitude toward its brokers was simple: ``There's your desk, there's a phone, there's your car -- now bugger off and sell some property,'' says Rollings, who left Foxtons in 2005 and now runs rival broker Marsh & Parsons Ltd.

Mini Coopers

Today, the firm Hunt founded in a former pasta restaurant in Notting Hill employs 1,300 people, most of them fresh out of university and willing to work weekends. Foxtons' 780 brokers race through London in a fleet of 635 Mini Coopers. The cars are painted British racing green and emblazoned with names like `Park Lane Prince' and `Fulham Flyer.' Top producers are rewarded with BMWs.

Inside Foxtons' glass-and-steel headquarters in Chiswick Park, in west London, hundreds of telebrokers with headsets work the phones as dance music thumps. The young crowd cheers, claps and exchanges high-fives as brokers reel in new clients. Foxtons offers more places to buy or rent than any other London broker. Employees staff the phones 8 a.m.-8 p.m., seven days a week, and typically process 1,000 applications a day from people looking to buy or rent.

Suddenly, one broker leaps to his feet. ``I got a val!'' he shouts, to huzzahs from his colleagues. Val is Foxtons-speak for a request to value a property.

Big Brother

Photos of employees, ranked by valuations, are projected onto one of the walls. On Friday nights, the team gathers for a meeting during which brokers shout out their weekly sales numbers. Newbies who cut their first deals are rewarded with bottles of champagne.

From his perch in Chiswick Park, manager Jean Jameson, a 37-year-old from South Africa in a gray suit and pink tie, plays a Foxtons version of Big Brother. He can peer into Foxtons offices across London via video camera to check up on brokers and see who's available for assignments.

Foxtons lets its brokers choose how they get to be paid. Some collect 22,000-pound annual salaries and no commissions. Others opt for 10,000-pound salaries and 10 percent of the fees they generate. Still others choose to take 20 percent of their commissions and no salary at all. Fatemi brought in 1.5 million pounds in fees for Foxtons in 2006 and says she pulled down six figures.

``You can write your own check if you work hard enough at it,'' Jameson says.

Dinner at Nobu

Inside the Green Street apartment, Fatemi surveys the mock- croc tables and blue-grey velvet sofa draped with a faux-fur throw. Martha Lane Fox, co-founder of travel Web site Lastminute.com Plc, and members of the Saudi royal family live opposite, she says.

People who can afford a home like this won't be put off by a 1 or 2 percentage point rise in rates, Fatemi says. ``That's one or two less dinners at Nobu, do you know what I mean,'' she says.

All the same, Fatemi knows firsthand how frustrating it can be to find a home in London these days. She bought a flat near Regent's Park last December for 452,000 pounds. It's now worth 550,000 pounds, she says.

``It was the most horrific thing I've ever been through,'' Fatemi says of the purchase. She says she had to fend off seven rival bidders.

`Unprecedented Market'

Des Forges, the Knight Frank broker, has played the market too. He bought a home for 490,000 pounds in 2001 and sold it in June for 1.05 million pounds. He's moved up to a larger, 1.4 million-pound house in Hammersmith. ``We're in an unprecedented market,'' he says.

Des Forges, the son of a Herefordshire farmer, is an architecture aficionado who favors Hackett suits with a traditional English flavor. He attended Ampleforth College, a North Yorkshire boarding school run by Benedictine monks, and went to work in real estate at the age of 19 as, he puts it, a ``tea boy.''

By his own account, he sold 135 million pounds of property from April 2006 to April 2007. On this late-June day, des Forges is padding across walnut floors in his socks inside a redbrick town house in Sloane Gardens, off Sloane Square. The Victorian interior has been gutted and given a sleek modern look that includes a laser-cut steel staircase, exposed brickwork and a seamless glass elevator shaft.

London's Future

The ground-floor maisonette -- with a sweeping, cantilevered walnut staircase, storage for 1,200 bottles of wine and a 42-inch (1-meter) plasma TV hidden behind a walnut panel in the master bedroom -- is on the market for 3.95 million pounds. Des Forges says an Italian banker and his wife have bought one of the places upstairs for 5.75 million pounds. An Israeli couple has purchased another for 4.7 million pounds.

When des Forges looks at buyers such as these, he sees the future of London and its housing market. London, a global nexus of finance, law and media, is luring the best and brightest from around the world, he says. ``I think it's just the beginning,'' des Forges says of London's ascent. ``Where else is going to compete with it, really?''

Good times don't last forever. As the price -- and risk -- of buying London real estate climbs, many people are asking when this boom will end.

One June afternoon at Frankie's, a bar and grill in Knightsbridge, Savills broker Brian D'Arcy Clark is nursing a beer while a colleague sips champagne. Up walks the restaurant's French manager, Jean-Christophe Slowik.

``Les agents immobiliers!'' Slowik exclaims. ``It's crazy, your market, huh? Is it going to collapse one day?''

``Tomorrow,'' D'Arcy Clark quips.

``Good!'' Slowik says. He's hunting for an apartment.

To contact the reporter on this story: Simon Clark in London at sclark4@bloomberg.net

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Originally Posted by skier666

Thank you 100% financing! Wow, I can't believe this is happening ;) Our government is so rad!

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What's wrong with 100% financing :redface:

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Originally Posted by runethechamp

What's wrong with 100% financing :redface:

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Nothing, other than you wont have a lick of equity for minimum 5 years, especially if you financed your closing costs.

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Originally Posted by Stone-Free

Nothing, other than you wont have a lick of equity for minimum 5 years, especially if you financed your closing costs.

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Unless you make smary buys instead of stupid ones.

So I am out look for new houses here in St. Louis, and all i can say is wow! Buyers mkt. I love reading, "bring me an offer!" "free plasma!"

Im starting at 80&#37; of ask, and many of them have been reduced allready. Quality stuff out there too, everyone just got done rehabing with their refi money. opps!

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Originally Posted by Cono Este

So I am out look for new houses here in St. Louis, and all i can say is wow! Buyers mkt. I love reading, "bring me an offer!" "free plasma!"

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Wow, that is great! And then you EVEN get to live in St. Louis...:p

If you like bare handed catfish tourney's or nascar its the place to be.

It seems like its falling everywhere except where I live, westside LA... I do think there is a LOT more bad news and things are just starting the downward slide. Countrywide saying that delinquencies were running higher on Alt-A loans than Subprime says this thing isn't contained to just subprime = bad credit borrowers. The Alt-A people are just starting to feel the pain. Wait another year or so and they will really be hurting. I'm just hoping it finally makes it to my neighborhood...

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Originally Posted by comish

It seems like its falling everywhere except where I live, westside LA... I do think there is a LOT more bad news and things are just starting the downward slide. Countrywide saying that delinquencies were running higher on Alt-A loans than Subprime says this thing isn't contained to just subprime = bad credit borrowers. The Alt-A people are just starting to feel the pain. Wait another year or so and they will really be hurting. I'm just hoping it finally makes it to my neighborhood...

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LA is a weird mkt, it was stagnate for alot of the ninties.

Rents in South Bay (Silicon Valley) have been increasing for the last 5 months. There's still not enough supply to meet the demand, and the job market is improving here. San Francisco is still crazy, although the pace has slowed a bit (according to stats). However, it should be interesting to see how the all new apartment high rises that are going online in the next couple of years on South of Market perform. To me, its getting way too saturated with the same looking condos near the Ball Park. There's no character to the neighborhood. Just condo after condo is being built. But hey, if they can build it and sell them, I guess that's their whole gameplan.

It seems that the most notable one, 1 Rincon Hill (the biggest addition to the skyline since I've lived here), is almost completely sold. They have more towers planned of 300 or so units each.

http://www.sfnewdevelopments.com/

The house next door is in default. The lawn is unkept and long, the pool turned green and the county health department applied mosquito control. The woman who owned it bought it for $665,000 in 2003 with a first mortgage of $550,000. She then proceeded to take out an additional $330,000 in secondary mortgage debt putting the debt load at $880,000. She used the money to buy things like a Cadillac Escallade, 2-personal watercraft, top of the line appliances, TVs, exercise equipment and a bunch of landscaping. Meanwhile they lived like pigs and destroyed the inside of the house. Animals and careless living mean all the carpeting needs replaced, the floors need sealed and the place needs a lot of general updating. No short sale, the house is listed at $940,000 and will be a nuisance until foreclosure and auction is complete.

She sold most of her personal belongings and the appliances for pennies on the dollar this spring and moved out. Hell, she even sold her Temperpedic bed and motorized frame. Her final gift was to turn off all the power so the pool would go stagnent and the landscaping would die. She will lose the home and her initial down payment, but pocketed $330,000 in loans that will never be recovered and walked. Bitch! Its legal larceny enabled by lending policies and the assumption what goes up can never go down.

Oh yeah, our building just changed hands and we got a nice letter yesterday informing us our rent is going up $200 / mo!?!?! We knew it was coming given that the building was on the market and the price they were asking wouldn't even make the place cash flow positive but it still hurts...

Market is actually rising in JH and Teton Valley...
Average home price in JH just went up from $880,000 to $1M.
Anything in town under $500k sells in a few hours.
Silly.

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Originally Posted by skier666

Rents in South Bay (Silicon Valley) have been increasing for the last 5 months. There's still not enough supply to meet the demand, and the job market is improving here. San Francisco is still crazy, although the pace has slowed a bit (according to stats). However, it should be interesting to see how the all new apartment high rises that are going online in the next couple of years on South of Market perform. To me, its getting way too saturated with the same looking condos near the Ball Park. There's no character to the neighborhood. Just condo after condo is being built. But hey, if they can build it and sell them, I guess that's their whole gameplan.

It seems that the most notable one, 1 Rincon Hill (the biggest addition to the skyline since I've lived here), is almost completely sold. They have more towers planned of 300 or so units each.

http://www.sfnewdevelopments.com/

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Interesting to see that the rents are going up now. East Bay rents were very low compared to the house prices for a long time, and I think that was the tune all around the bay area. Our rent was downright cheap compared to what we pay in morgage now.

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Our rent was downright cheap compared to what we pay in morgage now.

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I'm in the same boat buddy! The Rental market is weird. Usually rents go up when housing prices rise because less people can afford to buy a house, and thus look at the rental market. However, the last couple of years have been strange due to the extremely low interest rates and the subprime, 0&#37; down, all interest craze...which is now gone.

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Originally Posted by Cirquerider

She will lose the home and her initial down payment, but pocketed $330,000 in loans that will never be recovered and walked. Bitch! Its legal larceny enabled by lending policies and the assumption what goes up can never go down.

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Why can't her creditors go after her for the deficiency? Because she will declare bankruptcy?

Jim Cramer the money god says just walk away from your house.

http://video.google.com/videoplay?do...62039224367008

its no big deal
just run away and default

"you made a bet and lost"
so just fold your cards!!

Cramer also says that when the 2 year teaser arms come time to reset soon (the 2/28 loans) there will be a 100&#37; default rate!
I don't believe that, but I also can't believe he believes it.
What a pessimist. I hope he is wrong.

http://housingdoom.com/2007/07/30/cr...erwater-homes/

The market is crazy out here. I'm sure my perception is skewed as I'm looking at very specific types of properties for investment purposes. If I pull aside a listing as being a good investment I either need to move on it immediately or it will be gone within the week (even If I've pulled 10 listings that day). I am buying houses for 60K though (and getting a commission back). :D But, the houses are generally beat and will require a lot of hard work

Anything under 200k in the Salt Lake Valley is an absolute feeding frenzy.

I've had some other properties sit though. Both over the 200K mark. They've had crazy numbers of showings, but for some reason haven't moved. Multi-units aren't selling for shit as rents haven't caught up with home prices yet. You can't make them flow right now (in SLC anyway).

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Originally Posted by meatdrink9

I've had some other properties sit though. Both over the 200K mark. They've had crazy numbers of showings, but for some reason haven't moved. Multi-units aren't selling for shit as rents haven't caught up with home prices yet. You can't make them flow right now (in SLC anyway).

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I'm waiting for the 'right deal' to come my way, I think alot of people are doing the same thing. Prices aren't going anywhere fast, and if anything, they'll come down a tad. We're making offers 5~10% under the listing price and seeing what happens, there's lots of overpriced stuff out there, and some people still have the expectation that their house will sell with multiple bids withing 24 hours of hitting the market...

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Originally Posted by Core Shot

Cramer also says that when the 2 year teaser arms come time to reset soon (the 2/28 loans) there will be a 100% default rate!
I don't believe that, but I also can't believe he believes it.
What a pessimist. I hope he is wrong.

http://housingdoom.com/2007/07/30/cr...erwater-homes/

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Holy crap, people call me a doomsayer, and I was shocked and upset looking around that site.

Cramer just wants people to watch his show and buy stocks. I guess.

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Originally Posted by Benny Profane

Holy crap, people call me a doomsayer, and I was shocked and upset looking around that site.

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another good one is www.housingpanic.blogspot.com

Jim Cramer goes looses his mind:

This is what panic looks like.
I guess its too close to home since he used to work in fixed income funds.

"WE HAVE ARMAGEDDON"





You gotta watch the whole thing - he is like a crying little kid stomping his feet.

Western states went exotic with mortgages
But credit crunch means options are dwindling
By Laura Mandaro, MarketWatch
Last Update: 12:01 AM ET Aug 5, 2007


SAN FRANCISCO (MarketWatch) -- Borrowers in California, Nevada, Hawaii and Florida face the harshest drought if banks cut off the flow of some popular but riskier mortgages.
These states surpassed the national average last year for payment-option adjustable rate mortgages, the type of home loans that allow the borrower to minimize their monthly payments so they don't even cover the interest on the loan, a review of mortgage data show.
California led the nation in originations of payment-option ARMs, with about 24&#37; of all its refinanced and first mortgages falling into this category last year, according to data firm First American LoanPerformance.
These home loans, also termed negative amortization loans because they tack any deferred interest on to the back of the loan, represented about 17% of Nevada's total mortgages last year, followed by just under 15% for Hawaii and about 13% for Florida.
In contrast, payment-option ARMs made up 11% of all mortgages last year in the United States, estimates LoanPerformance, a unit of First American Corp.

"You've seen growth in the states with high home-price appreciation," said LoanPerformance spokesman Bob Visini.
The states with the lowest percentage of payment-option AMRs? Mississippi and Arkansas, where 0.6% and 1.3% of loans fell into this category.
After a fall-out in the subprime market, where lenders made loans to borrowers with poor credit history, banks are now cutting back on loans to better credit borrowers. Under the gun are loans that carried special features, like minimal income documentation requirements.
Some of the nation's largest lenders, including National City Corp. (NCC : National City Corporation
WFC32.81, -1.61, -4.7%) have started to clamp down on making new nontraditional mortgages amid the slumping housing market, leaving homebuyers with fewer options.
A broker at mortgage brokerage firm ACE Mortgage Funding LLC estimated Friday that 90% of mortgages that don't conform to standards set by Fannie Mae have disappeared in the last three days.
As one visual sign of banks' cooling to a variety of mortgages they had introduced over the years, the broker's morning loan rate sheet dropped to one page - versus 10 pages usually. The broker asked not to be identified. See full story.
Nevada leads interest-only
One hit with borrowers over the last few years was the interest-only loan, which allowed homebuyers to pay just interest for a fixed period of time. Interest-only mortgages made up about 22% of all U.S. loans last year, says LoanPerformance. Nevada outpaced the average in this category too, with 34% of its mortgages deemed interest-only; California stood at 32% and the District of Columbia 33%.
Interest-only and payment-option ARMs together made up one-third of the U.S. mortgage origination market last year.
The volume of these mortgages increased swiftly during the housing boom, particularly in states where fast-rising home prices made it harder for borrowers to cover mortgage payments - and easier to sell homes for a hefty gain.
In California, payment-option ARMs made up just 0.8% of all loans in 2003 before jumping to 7.5% in 2004 and more than 18% in 2005, says LoanPerformance.
It derives its data from a review of mortgages that wind up in mortgage-backed securities, or loans that make up over half the U.S. market.