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News Link • Housing

..Richard Koo Learned When He Went Undercover Into A Bank And Pretended To Be A Homebuyer

•, Joe Weisenthal
 In his latest note, he does a grand tour around the world, making observations in Germany, Japan, Spain, and the US.
The observation about the state of the banking/housing system in New York was fascinating.
In New York, I played the role of prospective homebuyer and visited a local bank to get a feel for the home lending market, much as I always do when visiting my home in San Francisco.

I was surprised to find that the bank, one of the largest US financial institutions, had dramatically changed its lending stance a short while ago and was now aggressively expanding its home mortgage business. While the bank continued to require substantial documentation, it was very willing to lend and offered a wide variety of incentives.

Among the incentives were an offer to make the first month’s payment (up to $2,500) on behalf of the borrower and the availability of 95% loan-to-value loans for a slightly higher interest rate (LTVs are normally capped at 80%).

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