Orange County

[BobPhillips-RE]

I just came across this information, and thought that it makes a lot of sense, in retrospect.

http://www.housingwire.com/2012/01/27/value-in-seasoned-subprime-underestimated-amherst

"Subprime loans issued in 2004 and earlier possess a higher percentage of better quality re-performing loans when compared to 2006 and 2007 vintages, Amherst Securities said in its latest mortgage insight report.

The point of the survey is to remind the market that there's a need to differentiate between the collateral characteristics of subprime loans issued in different years."

"Subprime loans written in 2004 and earlier averaged $110,000, compared to $159,000 and $188,000 in 2006 and 2007, respectively. The larger loans came as home prices peaked in 2006. Seasoned subprime borrowers also put more equity into their homes with LTV generally at 79% on 2004 subprime loans, compared to 81% on 2006 and 2007 mortgages."

I don't know about you, but I never thought about it, in that manner.

[Goran_K]

I've always thought about loans in the past 10 years this way. It was obvious that as funny money became more prevalent, that loans closer to the peak were less stable than ones made earlier in the bubble. I'd say 2005-2006 were PRIME fraud years.

[BobPhillips-RE]

That's true, but the main point of the article - as I saw it, anyway - was that the SIZE of the loans in 05 and 06 were MUCH larger, so, therefore much more susceptible to depreciation.  As those years unfolded, more questionable qualifying also came into play.

Thinking further on these factors, you might also conclude that the depreciation which has ensued, since, could be considered an overreaction, and that once that momentum loses traction, there might be a false bottom, which could provide a brief surge of appreciation, until the market corrects itself, once again, as it usually does.  Just a thought.