Posted on 08/08/2007 6:47:57 AM PDT by Hydroshock
NEW YORK - The dream of owning a home is fading away for many Americans with less than stellar credit.
On Tuesday HomeBanc Corp. said it will not issue any more loans, and Impac Mortgage Holdings Inc. shut down a type of loan called “alt-A” for people with limited documentation or slight credit issues.
That followed bankruptcies for two of the country’s biggest home lenders — American Home Mortgage Investment Corp. and New Century Financial Corp. — and tighter terms at most other lenders that are thus far surviving a shakeout in the industry.
“Every day I hear about a number of lenders that are reducing their products,” said George Hanzimanolis, president of the National Association of Mortgage Brokers. “It is going to take a while before the dust settles.”
(Excerpt) Read more at msnbc.msn.com ...
If the trailer had ‘Resetting ARMs’ painted on it the video would be perfect.
Evidently the Econ 101 course you took was written by one of Keynes' disciples and you swallowed it whole. A blighted neighborhood makes you feel bad, so you want to a government program to bail out the afflicted. Such a nice sob story- have you considered working on Hillary's campaign?
But if enough Americans are in foreclosure...look for a stroke of a pen in Washington to make it right in some way.
And why don't you try some new material...the old, "you're a liberal" is pretty lame.
Even for you.
Poor baby. You got your feelings hurt because I noted that you, like Hillary, want a government program to bail out Foolish Buyers.
Maybe we can create another government program to make mean posters stop picking on Foolish Posters. Combine the two and your problems will be solved.
These mortgages are backed by pension funds and life insurance companies and the like. They're the ones that will have to take a hit on the return on their investments.
And we're not necessarily speaking about the resetting of the interest rate here.
If a 720 FICA score mortgagee has to sell his $750K executive home with a 748K balance of mortgages...that can only sell for $675K...before paying real estate fees and seller subsidies for the buyer...that's a problem.
And it can all be traced down to the lower end of the market if Pedro OR Peter can't afford to buy their 1st home.
It's really a deadly perfect storm scenario working here. A lot of factors.
Not enough qualified 1st-time buyers create gridlock on the move-up market.
A volatile interest rate market which historically overreacts...as Wells Fargo did on the fixed rate jumbo product earlier this week.
Supply and demand...glut-filled inventory in the majority of neighborhoods.
Oh...it's going to get REAL ugly this time....and I was around for the last two...in 1981 and 1990.
I just thought you'd like to try some new material...cause your comedic act is worn around here.
I wasa around for it and more. I went throught he oil bust of the late 1980’s. But is am still not in favor of a bailout.
LOL!
That’s me, not capable.
Alas, I can only aspire to the level of comedy you’ve managed to achieve on this thread. But I’ll keep studying your posts to see how you do it. Post away.
Here's what we're seeing this week.
New 100% loans and even a 103% for over 700 FICO score.
Some lenders still closing.
C-Span last Saturday. Sub-prime foreclosures at 13% may or may not hit 20%.
No-doc very strictly applied to self-employed borrowers only.
Sub-prime full doc, verify everything.
Still buzz about more lenders disappearing.
I hope it does not get worse but fear it will.
Because I cannot post excerpts directly from this source, I'm restricted to saying very few words it. But Bloomberg is saying that Countrywide may need to shift to `more reliable' sources of funding. Apparently, the sources CFC reported it was planning to rely on are not going to be 'reliable' with turmoil in the subprime market. Bloomberg quotes a report from CreditSights Inc. Read the report for yourself.
My interpretation is that the largest U.S. mortgage lender is feeling the pinch of market turbulence and tightening money sources. I'm suggesting that things are not nearly as rosy as CFC wants the world to believe.
All of which means things are going to get worse after October, 2007 and the whole world knows it. Jumbo loans in California are already restricted to people with very high credit scores. Market rates are increasing weekly. Brokers must charge 7.94% or higher rates for 30 year fixed rate loans. Which means virtually every mortgage loan written since 2004 will be nearly impossible to refinance. Unless home buyers are willing to pay higher rates.
So all those people who now are paying 4.94% on their ARM loans are suddenly going to hit with 7.9% and higher interest rates. Which mean monthly payments on $ 600,000 are going to jump from about $ 2,490 to upwards of $ 3,970. Not including local taxes and utility costs.
And a $ 600,000 home in Californicated is, most likely, a postage stamp sized dump in South Central La La Land.
The people who were suckered into opting for 2% teaser rates will be hit even harder. Payments jumping up $ 1,600 per month is one thing. Increases of $ 2,500 + are another animal altogether. That animal has very sharp teeth and a nasty temperament.
But what do I know anyway. I'm just a geezer in Oregon.
It is snowballing faster then I thought it would.
Just wanting you to get your exaggerations correct.
They credit to anyone these days. I have a co-worker who has an outstanding 10k discover card bill from over 10 years ago and she is still able to get credit cards, cars and cash loans? However she does not own a home. When my husband and I applied for a mortgage 14 years ago we were only able to finance a home that was double our salary. It was very strict.
I lived down there from 1992 - 2000, so i know the area very well. Here is a typical house in Glendale, CA where I lived for about one year:
That was my only point and you are either ignoring it because I pointed out your exaggeration or you don't understand basic stat.
If you want to have a pissing match about who knows the California market better, let the unzipping begin.
Now you are saying I'm exaggerating on the high side, even when I give you a specific example. You say, "I am giving you the statewide average and telling you there are plenty of homes which do not fit your earlier statement. In fact most are not what you stated."
You alleged California residents (you hide that info from FR) make me ill. I was attacked maliciously when I said house prices were falling. Now I'm attacked for giving examples that are allegedly too high.
The only way we both could be correct is is housing prices already have fallen more than 30% in California.
Which proves I have been correct all along.
You mean mortgages written when interest rates were at 40 year lows if refinanced will be at higher rates? Duh!
Quick, panic!!!!
I’m just a geezer in Oregon.
...and so returns the “geezer in Oregon” line.
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