dtb said:

>From what I've read, a large fraction of mortgages in CA are
>now interest-only, often with essentially nothing down. And banks
>are allowing people to commit over 50% of their income to
>mortgage payments. I'd assume its a similar situation in Florida.
>Under those conditions, just the tiniest blip -- an uptick in rates,
>a decline in prices, people losing jobs, whatever -- is enough to
>result in massive foreclosures.

I agree with dtb's conclusions. I have heard from more than one source that somewhere between 60-70 percent of the homes being bought in the San Francisco Bay Area were financed with these interest only / no down payment mortgages. The popping of this bubble could be worse than the Dot Com bubble. The Bay Area is still suffering economically from the Dot Com. Why are these mortgages legal? Why aren't the banks worried about this? The banks will be stuck with billions of dollars worth of devalued property after the bubble pops and the suckers quit claim their mortgages or go into foreclosure. This situation has much of the look and feel of the collapse of the Japanese real estate bubble. The Japanese economy is still in the toilet due to that bubble's popping.

Gary