Comments on: 10% at 75% http://www.usablemarkets.com/2010/02/03/10-at-75/ markets, design, usability, research Wed, 21 Jul 2010 21:02:21 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: David Smith http://www.usablemarkets.com/2010/02/03/10-at-75/comment-page-1/#comment-76480 David Smith Fri, 05 Feb 2010 02:54:01 +0000 http://www.usablemarkets.com/?p=1648#comment-76480 Thought experiment: If you hadn't read that item, but someone asked you to guess how many houses are worth 75% or less of mortgage balance, what would you have guessed? I would have guessed 15-20%. So 10% is actually better than expected! You can see how useful this quality of being pleasantly surprised is in some prosfessions, like Wall Street analysis. At one time I sold real estate in inner city areas, some of the toughest neighborhoods. A lot of sales were with very high LTV, up to 100%. Lots of mortgages were interest only, so not amortizing principal, or one of those weird COFI loans which gave the option of not amortizing principal. I'd have to guess a lot more than 10% of those owners are underwater. Thought experiment: If you hadn’t read that item, but someone asked you to guess how many houses are worth 75% or less of mortgage balance, what would you have guessed?

I would have guessed 15-20%. So 10% is actually better than expected!

You can see how useful this quality of being pleasantly surprised is in some prosfessions, like Wall Street analysis.

At one time I sold real estate in inner city areas, some of the toughest neighborhoods. A lot of sales were with very high LTV, up to 100%. Lots of mortgages were interest only, so not amortizing principal, or one of those weird COFI loans which gave the option of not amortizing principal. I’d have to guess a lot more than 10% of those owners are underwater.

]]> By: alex kirtland http://www.usablemarkets.com/2010/02/03/10-at-75/comment-page-1/#comment-76352 alex kirtland Wed, 03 Feb 2010 16:54:40 +0000 http://www.usablemarkets.com/?p=1648#comment-76352 Yes, Lou, that's right. 75% of the value of the mortgage. ~alex Yes, Lou, that’s right. 75% of the value of the mortgage.

~alex

]]> By: Lou http://www.usablemarkets.com/2010/02/03/10-at-75/comment-page-1/#comment-76349 Lou Wed, 03 Feb 2010 16:10:00 +0000 http://www.usablemarkets.com/?p=1648#comment-76349 Just to be clear, looks like they're talking about mortgage value, not purchase price. Right? Just to be clear, looks like they’re talking about mortgage value, not purchase price. Right?

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