MBA Economist Has "Tiny Bubbles Of Concern"

The MBA chief economist had this to say at a conference. "Overall conditions in the mortgage market remain 'fundamentally strong' even though there may be 'tiny bubbles' of concern in certain areas,' Doug Duncan told attendees."

The champagne must be flowing. The MBA has a fizzy survey out May 4th with information on the quality of lending. "Piggyback loans, second mortgages closed simultaneously with a first mortgage, accounted for 66 percent of all second-mortgage loans originated in the second half" of 2004.

The survey tracked the continuing decline in traditional loans and the proliferation of borrowing gimmicks. "The dollar volume of first-mortgage originations declined 9 percent from the first half to the second half of 2004. Nonprime and alternative-A loans increased their market share, capturing nearly one-third of the mortgage market. The dollar volume of second-mortgage production increased 17 percent from the first half to the second half of 2004."