That's what I suspected...but, just to make sure, doesn't this mean that folks are borrowing against "inflated" values? Now I totally understand that it's only "inflated" if the bubble bursts; but, let's suppose, housing prices drop 20%? And there are additional job losses...say in hi-tech...and people can't pay the mortgage...
Who gets left holding the bag? Will it be like the S & L crisis all over again?
Joanna
Devine, James wrote:
it's based on the expected future market value of the house, which is mostly based on its current market value.
------------------------ Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
-----Original Message----- From: joanna bujes [mailto:[EMAIL PROTECTED] Sent: Friday, October 31, 2003 12:42 PM To: [EMAIL PROTECTED] Subject: Re: [PEN-L] PK on GDP surge - what could a socialist say ?
Here's what I'm curious about: I buy a house for 300,000. Within five years, the house is valued at 500,000 (not unusual in the Bay area); now I re-finance. Is my "collateral" based on the portion of the 300,000 I have paid off? Or is it based on the revised market value of the house?
Joanna
