behind mortgage mess

--Rates have also increased over the past few months on jumbo mortgages, which exceed the $417,000 limit for loans offered by government-backed mortgage houses Freddie Mac and Fannie Mae. That could squeeze middle-class families in cities like San Francisco, New York, and Washington, D.C., where middle-class home prices have risen above $500,000. --Alt-A loans accounted for about 13% of home loans last year and subprime loans accounted for about 20%, according to Inside Mortgage Finance. Jumbo loans account for about 16% of the market. Facts • Certain "no-doc" subprime loans didn't require the lender to verify the borrower's income. In extreme cases, lenders offered what was dubbed a "ninja loan" that required no income, no job, and no assets. • Mortgages date back to the Middle Ages. In French, "mortgage" means "dead pledge," implying that the property was "dead," or forfeited, if a loan wasn't repaid and that the pledge was "dead" once the loan was repaid. • One sign that risk has returned to financial markets: the CBOE Volatility Index, or VIX, alternatively known as the "fear gauge," reached its highest level in four years. • Homeownership rates rose to a high of 69.2% in 2004, from an average of 65% through the 1990s, according to government statistics. • As a share of all mortgage originations, subprime loans nearly doubled to 19% in 2004 from 9% in 2003, according to Inside Mortgage Finance. http://online.wsj.com/article/SB118678466632694559.html