Reply #24: I worked for a bank from 1983 - 1990 [View All]

[slackmaster]

There were indeed adjustable rate mortgages early in the 1980s; they were generally called "variable rate" instruments.

There were also lots of balloon payment loans in those days. Many people got screwed on them when the principle came due and they had to refinance in a world of astronomically high rates.

Payments not to exceed 28% of your gross income AND total debt payments not to exceed 38% of your gross. Full documentation of income.

You do have that part right. Another factor I remember was housing costs not exceeding 22% of your after-tax income.

Underwriting standards were very strict and were enforced, except for people like US Attorney General Edwin Meese who was a "special" customer of the institution I worked for. He got very special treatment.