RE:RE:RE:HOME PRICES DON'T MATTER TO HCG'S BUSINESSQuick Math:
$750k house
30% down for 25 year @ 5% 2 year term
Balance after 2 years with home cap or equitable: $502,796
If prices fall 20%, resulting value is $600k
503/600 = 84%
After 2 yeras, go to the big banks and refinance with improved credit. I can guarentee the banks will fiddle with reality and apprasials to get a mortgage without insurance (magically, the appraisal comes back at $650k!). Worst Case, they get mortgage insurance or stay with home cap or equitable for another year or two.
I think that there is always risk with financial institutions, but the reality is far from a whole housing collapse. You need unemployment to trigger that.... to me it seems that the economy is booming.