“HLS (or anyone) what does the 5 year ARM mean against say the 2-3 year? Are less people willing to take those?”
The 5 year arm could be better, if you just want to control cash flow(which is what these things are supposed to be for, but the teaser rate won’t be so low because the banks are postponing interest income further out.In any case now a borrower would have to qualify based on the post reset rate and that basically means only people qualified to go conventional can get the exotic stuff now. That is how it usually is. “Affordability” , using credit, is getting worse and worse even as prices fall, That is a recipe for a snowball.Just add foreclosures, oh yes we have those.Job losses/income/wealth setbacks on deck.
You are right Cardiff, the LTV requirements are much bigger deals. Documentation of income requirements is huge.
Before, a buyer or their mortgage broker could literally enter any fudged income figure and a FICO score and that was it…instant homeowner.