— Refinances with cash-out drove the subprime mortgage market. Where refinances used to be uncommon and very difficult to obtain, they were a dominant force in the recent financial markets.
— Refinances actually added risk and constricted capital in the financial markets.
— Financial markets are now dominated by commercial banks, instead of the savings and loans, playing a large part in our financing.
— Approximately 65% of outstanding mortgages are cash-out refinances. Forty percent of all loans were done with zero percent down.
The positive news is that the San Francisco Bay Area reached the bottom of the trough in February of 2009 when we reached a low of 53% down from the high in May of 2007.
— The market today is different and may stay this way for some time. Distressed sales will remain for at least the next 2-3 years. However, filings for Notices of Default are down and it seems that the government is metering the flow of foreclosures out slowly.
— California had 25,000 contracts entered into in April, up from 8,000 in April of 2009. 47% of purchases were by first-time buyers.
— FHA is 32% of all new mortgages, and 90% percent of mortgages are FHA, VA or GSE-backed.