I don't know how accurate the visuals were. Do you have any data Joe?

He mentioned more fees. Around December I saw the following;

"For loans closing on or after March 1, 2008, Fannie Mae and Freddie Mac will subject the bulk of their mortgage products hefty fees when the loan-to-value exceeds 70%.

Credit scores will determine the amount of the rate adjustment.

* Credit scores between 660-679: 0.750% of loan size in fees
* Credit scores between 640-659: 1.250% of loan size in fees
* Credit scores between 620-639: 1.750% of loan size in fees
* Credit scores below 620: 2.000% of loan size in fees"

I haven't heard anything more in recent weeks. Does anyone know if it is still the case?

For credit scores below 620, they might as well say zero, since someone with such a poor score will have a hard time getting a loan at all by March 1. There's no way in hell they'll be getting one for over 70% LTV. The tightening is not over, by any means.

How do you know?

ts,

I don't have data at hand, and am too lazy to look it up at the moment. I don't think anyone would dispute the proposition that the prime market is far larger than the Alt-A and subprime combined.

Here's a proxy: 40% of people have FICO scores of 750 or above; 58% are 700 or above.

The video makes prime borrowers look like a small part of the universe, and that's simply not accurate.

I'm asking myself why I wasted 5 mins on a lousy video with absolutely no data.

Thanks for highlighting the video, Joe. I appreciate the nod.

As to the specific size of each market, or "hard numbers", that wasn't really the point. I was only trying to illustrate what is happening on a broader scale.

I explain this concept several times per day by telephone and found that it plays much better on paper (or Photoshop/Cam Studio).

The specific sizes of conforming versus Alt-A versus sub-prime don't alter the root concept.

@TS: The changes are already cooked in for credit score-driven adjustments so if you are getting interest rate quotes and you set off the triggers, those fees are part of your quote. In addition, there's a 0.25% fee on ALL loans through Fannie and Freddie that already priced in, too.

Dan,

I realize you were focused on clarifying a concept. It's an effort worth making, and helps people understand what transpired and its impact on today's loan markets.

I was merely trying to point out that the visuals had an unintended consequence - making both the expansion and contraction of mortgage availability appear much larger than they actually were.