Data Collected by the Mortgage Brokers Association for Responsible Lending

1. A recent sample of 100 stated income loans which were compared to IRS records (which is allowed through IRS forms 4506, but hardly done) found that 90% of the income was exaggerated by 5% or more. MORE DISTURBINGLY, ALMOST 60% OF THE STATED AMOUNTS WERE EXAGGERATED BY MORE THAN 50%. These results suggest that the stated income loans deserves the nickname used by many in the industry, the “liar’s loan.”ⁱ
2. 37.2% of non-agency mortgage backed securities were no document loans in 2005.ⁱⁱ
3. 49.3% of ARMS with interest only features originated in 2004 lacked full documentation.ⁱⁱⁱ
4. As of September 2005, Adjustable rate Mortgages (ARMs) accounted for roughly 70% of the prime mortgage products originated and securitized and 80% of the subprime sector.^iv
5. In 2006 97.5% of borrowers are likely to face a payment shock of at least 25% and 75% of borrowers could face a shock of 50% or more.^v These changes neglect additional shocks that would result from the repayment of principal because of current interest only payments!
6. Payments will increase on 41% of the outstanding subprime loans in 2006 alone.^v
7. As of March 22, 2006 53.1% of interest only ARMS had a prepayment penalty.^vi
8. 70% of borrowers with Option ARMs (Arms that allow negative amortization) are currently making minimum payments.^vii
9. In 2004 $600 BILLION of consumers' spending power was from borrowing against home values. That is double the value of President Bush's tax cuts, as estimated by Brooking Institution scholar Peter Orzag.^viii
10. 2^nd homes accounted for 14% of new mortgages in 2004; in 2000 it was only 7%. Mr. Greenspan said that the fact that someone can sell a 2nd home without moving, "suggests that speculative activity may have had a greater role in generating the recent increases than it customarily has had in the past."^viii
11. Residential housing now makes up 16 percent, or $1.9 trillion, of the gross domestic product and is the economy's largest single sector, slightly bigger than the industries and services that supply health care.^ix
12. In 2005 the FBI convicted only 170 people nationally for mortgage fraud. In 2004 that number was 172 people. According to the FBI the hot spots for Mortgage Fraud activity in 2004 (per capita) were: California, Nevada, Utah, Arizona, Colorado, Missouri, Illinois, Maryland, Georgia, and Florida.^x
13. In the San Francisco Bay Area alone, almost 75% of mortgage loans taken out last year (2005) allowed borrowers to delay the payment of principle. Negatively amortized loans jumped to 29% of the Bay Area mortgage market from less than 10% in 2004.^xi
14. The following chart shows the percentage of Bay Area loans that were interest only or Option ARMs (know as negative amortization).^xi

    Year	Interest Only	Option Arm
    2005	42.6%	29.1%
    2004	43.7%	9.6%
    2003	20.3%	0.8%
    2002	12.0%	1.7%
    2001	2.9%	1.6%