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I have heard people in the banking business in Spain saying that the 35-40% ratio for mortgages is becoming compulsory. No mortgage if it represents payments of more than 40% of personal income.

If this is true Spain may avoid the next bubble because it looks like they can be repaid... if only flat prices will also fall to normal values in big cities, we may get something good about this US financial mess.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Mon Oct 12th, 2009 at 05:42:10 PM EST
[ Parent ]
My bank won't even give a 40% mortgage to employees except in exceptional circumstances...

En un viejo país ineficiente, algo así como España entre dos guerras civiles, poseer una casa y poca hacienda y memoria ninguna. -- Gil de Biedma
by Migeru (migeru at eurotrib dot com) on Tue Oct 13th, 2009 at 03:08:31 AM EST
[ Parent ]
Most of the defaults in the current crisis are in loans less than 40%, because 38% max was already the lending standard for being able to securitize most loans.  The difference will come in better verification of income.
by santiago on Wed Oct 14th, 2009 at 10:11:24 AM EST
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