Analysis: Giant home loans were still going strong in 2007

[sinkingfeeling]

Source: USAToday.com

http://www.usatoday.com/money/economy/housing/2009-02-2...

WASHINGTON — The share of Americans taking on huge new debt to buy a home was increasing even as foreclosures and plummeting housing prices began sending shock waves through the nation's economy, a USA TODAY analysis shows.

In 2007, the most recent year for which statistics are available, banks and other lenders gave out nearly 419,000 mortgages to buyers borrowing at least four times their annual income, sums that were unheard of less than a decade ago.

An examination of federal lending-disclosure reports show that amounts to 9% of all borrowers in 2007, a rate higher than at the peak of the U.S. housing boom.

Records filed with the Federal Financial Institutions Examination Council show the giant loans were most common along the West Coast, and around East Coast cities such as Boston and Washington, where home prices shot up dramatically. In California's Sutter and Yuba counties, outside Sacramento, for example, almost a quarter of borrowers took out loans for at least four times their annual income.

Many of those counties have foreclosure rates among the nation's highest.

Read more: http://www.usatoday.com/money/economy/housing/2009-02-24-bigloans_N.htm

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Cross post from GD.

I remember well that it used to be your mortgage loan couldn't exceed 2 1/2 times your annual income and your total debt couldn't be above 36%.