Now spreading to the next level - Alt-A's?
WASHINGTON (MarketWatch) -- For the first time in the nation's history, a significant number of Americans are being threatened with the loss of their home even though they still have a steady, good-paying job.
It's not just an issue for people with poor credit, those with subprime loans. It also affects people with good enough credit to qualify for a prime loan. Known as Alt-A mortgages, these loans were written for 1 in 5 U.S. mortgages and could have a big impact on the economy and on credit markets -- bigger, perhaps, than the effects of the recent shockwaves buffeting the subprime-lender market, economists say.
In coming months and years, the credit crunch that's now squeezing mainly the poor is likely to hit millions of middle-class homeowners who took out risky loans during the great housing boom earlier in the decade. More than 1 million families will lose their homes in the next few years, by one estimate. Another study predicts 2.2 million foreclosures.
This threat is new in American history. Its impact on the economy, and upon the American Dream, is uncertain.
http://www.marketwatch.com/news/sto...x?guid={1F050B96-5BA3-494D-9D92-FB882963206C}
Yep, they'll have to withdraw the troops from Iraq and deploy them into every Mortgage company in America.
50!http://ml-implode.com/ has it at 41, the number of US mortgage lenders that have croaked it since late 2006:
The count was 36 early last week...
Now spreading to the next level - Alt-A's?
WASHINGTON (MarketWatch) -- For the first time in the nation's history, a significant number of Americans are being threatened with the loss of their home even though they still have a steady, good-paying job.
It's not just an issue for people with poor credit, those with subprime loans. It also affects people with good enough credit to qualify for a prime loan. Known as Alt-A mortgages, these loans were written for 1 in 5 U.S. mortgages and could have a big impact on the economy and on credit markets -- bigger, perhaps, than the effects of the recent shockwaves buffeting the subprime-lender market, economists say.
In coming months and years, the credit crunch that's now squeezing mainly the poor is likely to hit millions of middle-class homeowners who took out risky loans during the great housing boom earlier in the decade. More than 1 million families will lose their homes in the next few years, by one estimate. Another study predicts 2.2 million foreclosures.
This threat is new in American history. Its impact on the economy, and upon the American Dream, is uncertain.
http://www.marketwatch.com/news/sto...x?guid={1F050B96-5BA3-494D-9D92-FB882963206C}
The damage to the financial system from the woes in the market for riskier types of mortgages is largely contained but bears close scrutiny, said Richard Fisher, the president of the Dallas Fed bank, on Wednesday.
Fisher added that the housing markets may "feel some short-term pain" because 40% of home buyers last year were nonprime, either subprime or Alt-A loans. This pain will make it "less clear whether housing construction has bottomed and how long the housing downturn may last."
The economy will grow more slowly because of the housing market, according to Fisher, but is strong enough "to weather this storm."
A buildup in housing inventory means that responsible buyers will be able to purchase homes at more affordable prices, he said."
hello,
so how can this be?
a person services the mortgage so no issue, they have good paying job as mentioned in the article
why will they lose their home?
nothing more than hype in the media going around
its like the death toll from a plane crash, ch 7 says 20 died, ch 9 says 30 dead, ch 10 says 40 died, official result ?
goodluck
robots
But now, because of the recent popularity of loans geared to let people buy a more expensive home than they can truly afford, all it will take is the passage of time to trigger a default. At some point, all these loans are adjusted to switch from a low, subsidized monthly payment to the full amount required to pay off the loan.
In the not-too-distant future, millions of Americans may receive a letter advising them of their mortgage "reset" or "recast" with the same dread they now feel for a pink slip or for bad news from their oncologist. The only difference: They know (or should know, if they noticed what they were signing) exactly what's coming: An average monthly increase of $1,512 in their monthly mortgage payment.
Theres no problem, really...
It's all contained and won't spread to the rest of the financial system.
hello,
so 50 lenders have gone bust and what has it done?
they have to fill pages with something
thankyou
robots
hello,
so 50 lenders have gone bust and what has it done?
they have to fill pages with something
thankyou
robots
MIAMI — One by one, some of the nation's largest home builders have seen the slump in the housing market crush quarterly earnings.
Lennar Corp. became the latest victim Tuesday, with a 73 percent plunge in first-quarter earnings and predictions that it is going to fall short of 2007 earnings goals. Since the start of February, home builders KB Homes, Hovanian Enterprises and Toll Bros. all reported falling profits.
Stuart Miller, Lennar's president and chief executive, said a lack of demand for the winter-spring buying season, new problems with subprime lenders and higher-than-desired land costs hurt profits.
The company reported drops in new home orders and building starts, and that Florida contained some of the slowest new home markets. Lennar shares fell 4 cents, or less than one percent, to close at $44.50 on the New York Stock Exchange, after decreasing almost 3 percent earlier in the day.
"These are difficult times for the home-building industry," Miller said on a conference call. "The reality is that market conditions are still challenging at best and in some markets continuing to deteriorate."
hello,
so SUB-PRIME LENDERS are struggling
so HOME BUILDING COMPANIES may be going to struggle?
so is REAL ESTATE (existing houses, units etc) going to struggle?
is it that easy to piece together?
thankyou
robots
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/04/06/wdetroit06.xmlyes, yes, yes, & yes
A house costs less than a car in Detroit
By Alex Spillius in Washington
Last Updated: 1:22am BST 06/04/2007
The mortgage crisis in America has deepened so much that family homes can now be bought for less than £15,200 - the price of a new car.
A four-bedroom home near the original Motown recording studio in Detroit recently sold for £3,700 ($7,000), less than most used cars. A boarded-up bungalow fetched £685, and a three-bedroom house listed for £276,000 attracted just £69,000.........
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