What’s behind foreclosures - people not paying their bills. Simply really.
Ping!
Which means the new bill will do absolutely nothing to fix the problem, doesn’t it?
Sorry, but data from Countrywide is as suspect as a pimp talking about why fewer people are paying for hookers.
Ok, what does that mean? First, a cash out refinancing means the person already had a mortgage, and took out a new one to pay the old one off in full - and took some money out, as well. Rather than paying down, this means the mortgaged amount increased - it was for more than the old mortgage or was used as a way of taking out some of the home equity.
But what a second - what makes a mortgage subprime to begin with? Poor credit for the borrower. OK, what is the leading cause of that poor credit, present in nearly every case? A missed mortgage payment, frequently 2 or 3 in the previous year.
In other words, half of the subprime originations were people who couldn't pay the old mortgage, getting *paid* by the bank, to take out a *bigger* mortgage. The "paid" part could then be used to stay current on the next few mortgage payments.
This means the banks were throwing good money after bad, and avoiding an event of default by loaning more and more to their deadbeat borrowers. Why were they doing this?
Because they believed higher house prices would save the day, even for deadbeat borrowers who could not afford their smaller, older mortgages. They were engaged in a greater fool theory trade - they expected the borrowers to ride house prices ever higher, even without being able to pay the interest, and to pay said interest *out of* the house price appreciation.
And eventually to sell at a big fancy price, and pay off the loan in full.
OK, sell to whom?
Crickets chirp. And here we are.
I think I would need to call BS on this ap story, where is the hard data!
Falling home values are the #1 reason. Even if someone loses their job, if they have significant equity in their home, they will find a way to save it. Losing a job and having no equity or worse being upside down makes it real easy to walk away from a home.
I’m curious how they get the information? Is it self reporting by the home owner, or is it verified? My point is simply that if self reporting, the person is going to try to come up with an excuse that seems to keep them from being at fault.
susie
I wonder how much its actually costing to give jobs to people overseas.
Horsesh*t
And just where and whom do you think will own or control all that foreclosed on property ?
I’ll bet in the long run the Government either owns or controls 85% of it for subsidised housing thousands of homes for new HUD properties given over by the banks who won’t be able to afford the upkeep and influx of so many properties to tend to!
Wait till the negam recasts hit next year. Something like 40-50% of loans in CA at least were negams the past couple of years. When their principal balances hit 110%/125% of the original loam amount (depending on the program), the borrower gets hit up with a fully amortized payment that may be more than double what they payed before.
The real pain hits next year. This year has been painful merely because of the anticipation of what’s coming.
And here our government is allowing illegals ( who in bulk are renters) to gobble up jobs as US citizens are struggling to keep their homes. Traitorous bastards.