...E como consequência, na minha modesta opinião, vão contribuir para o crash mundial desse sector. Mas talvez só daqui a bastantes anos (talvez até mais de 10 anos,sei lá) entretanto tempo tempo para um cafézinho. Com vossa licença, então até já. .....
"The rise of piggyback loans in recent years may pose a risk to the financial strength of the mortgage banking system.
The rise of piggyback loans in recent years may pose a risk to the financial strength of the mortgage banking system, according to a study released yesterday by PMI Mortgage Insurance Co., a subsidiary of The PMI Group, Inc.
Piggyback loans -- so called because a second mortgage is piggybacked on to a first to compensate for a smaller down payment -- have become common in recent years as housing prices have appreciated. Approximately 42 percent of home purchase mortgage loan dollars involved piggyback loans during the first half of 2004, up from 20 percent in 2001. Piggybacks are particularly popular in high-cost areas such as California , where prices have outstripped incomes and borrowers are increasingly stretching to purchase properties.
"The rapid growth of piggyback lending has introduced new benefits and risks into the mortgage market, and these issues and risks merit further consideration by policy makers," explained Charles A. Calhoun, PhD, the study's author. "Borrowers are able to afford more expensive homes with smaller down payments, but may not be prepared for the increased payments they will face as interest rates rise. Similarly, piggybacks allow lenders to increase profits because they are originating two loans instead of one, but they may not be prepared for the one-two punch of rising interest rates and declining house price appreciation."
Piggyback lending is especially popular in high-cost areas, many of which are at risk of house-price declines. Mark Milner, Chief Risk Officer of PMI Mortgage Insurance, said, "Overlaying concentrations of piggyback lending on top of PMI 's assessment of the likelihood of depreciation in the top 50 metropolitan statistical areas reveals a strong positive correlation between the rate of utilization of piggyback loans and market risk. In fact, among the MSAs ranked in the top 10 in terms of market risk, 7 regions -- all of them in California -- had more than half of their mortgage lending for home purchases in piggybacks during the first half of 2004." Information on the likelihood of house price declines was taken from PMI 's Economic and Real Estate Trends report, published quarterly and available at pmigroup.com/newsroom/publications.html.
"Piggyback loans may contribute to overheating in local housing markets," said Charles Calhoun. "Initially, they appear to support a rapid rise in housing values by qualifying borrowers for larger loans at higher loan-to-value ratios -- but I expect that as interest rates rise and house price appreciation slows or declines, defaults will rise and borrowers could lose their homes. It's particularly worrisome given that borrowers may not fully understand the risks they face."
In addition to risks specific to borrowers and lenders, piggyback loans "raise reporting, disclosure, and regulatory issues that represent the unintended consequences of a rapidly growing market segment," the paper asserts. The emergence of piggyback loans without MI has increased the overall level of uninsured and lender-insured credit risk in U.S. mortgage markets and raised a range of capital, pricing, and reserving questions. Current risk-based capital standards for Fannie Mae and Freddie Mac were developed prior to the rapid growth in the piggyback market, and fail to fully account for the potential impact on their financial performance. Similarly, under current disclosure practices, investors are not informed about the presence of simultaneous second mortgages, because loan eligibility requirements for GSE securities traded in forward "To Be Announced" (TBA) markets do not account for the potential impact of piggyback seconds on the payment performance of securitized first mortgages due to higher combined loan-to-value ratios.
In a piggyback structure, the first mortgage is a loan covering 80 percent of the property's value, often at a fixed rate, but increasingly at an adjustable rate. The second loan covers the difference between the buyer's down payment and the first mortgage (the popular "80-10-10" structure, for example, combines an 80 percent first mortgage, a 10 percent second mortgage, and a 10 percent down payment). The second loan is typically either a closed-end loan, or more often, an open-ended home equity line of credit (HELOC) with an adjustable rate. "