LTV for a long time was 80% (or 20% down) for loans not requiring an escrow account and not requiring mortgage insurance (PMI). LTV was 90% (or 10% down) otherwise, plus you had an escrow account into which you paid monthly to cover taxes and insurance plus you also paid PMI. However, with 30% down or 70% LTV a loan could be had for those who were self-employed or had other documentation problems.

During these times various “Nothing Down” courses were sold to show you how to get arround this by getting the owner to “finance” the rest.

Recently 0% down, 100% LTV, and no documentation became the rule, that is the buyers had no skin in the game. In fact in Great Britain, Northen Rock wrote 125% LTV loans so you could fix up the place. “Liar Loans” (no documentation of income) became the norm so that with an income of $14,000.00 you could qualify for a $750,000.00 loan by the clever moving of a decimal point.

In Germany, 50% LTV and 50 year mortgages were common, thus their prices did not bubble and thus did not fall.

In Poland, lacking a robust Zloty mortgage infrastructure, liberal Yen loans were offered to prime the housing market.

More generous terms have always been available by FHA or the VA, but other terms applied such as the seller paying the points, so that durring the bubble sellers would not sell as a non-FHA or non-VA buyer was always available.

This total disregard to sound lending occurred in the U.S., Spain, Ireland, the U.K., eastern Europe, etc.

This housing bust is global and the latest news is that property prices in Mumbai, India are falling.

A house is only an investment if you buy it to rent it with the expectation that the rent covers ALL costs.

The FED & the Government have in 12 months bent every rule and virtually outlawed being a BEAR on what many call the FIRE economy = Finance Insurance & Real Estate.

BUT none of the tricks will work because:
Consumption is Value Destruction.
Production is Value Creation.

The Housing BOOM was really a CONSUMPTION based event. No different than $5.00 Coffee.

For MGIC to alter its requirement from 5% down to 10% down (with the other insurers YET to follow suit) means we STILL have a looong way to go before true sanity returns to this picture.

Why do I get a feeling the mortgage insurers are going to go the way of the dinosaur?! (wiped out by a financial meteor)

“Housing Collapse Ahead? Not According to the Data”
http://www.aei.org/publications/filter.all,pubID.28418/pub_detail.asp

If you torture the numbers, they’ll tell you anything you want to know.