I have no pity for the borrowers or the lenders. They all knew it was a risk, the lenders most of all.
The lending industry is wanting a bail out. Chuckie Schumer is carrying the water for the industry but the lenders should take their lumps for following a poorly thought out business practice.
Realizing that most of these are probably ARMs, just curious to know what the average rate would be for those being foreclosed or deliquent, and how much they have gone up since they were initiated. Too bad that’s never published that I have seen.
From the article:
As of June 30, AIG’s finance arm, which originates first and second mortgages, recorded delinquencies of 3.68 percent in subprime, 2.13 percent in non-prime, and 0.81 percent in prime.
The estimated inventory “shrinkage” of the average retail merchant is 2%, and they don’t get a foreclosed house to sell to cover costs.
Either the lenders knew their business, or they deserved their losses.
This was predictable with bankruptcy reform.
most people in trouble have refinance their homes deal with unsecured credit card debt. They converved unsecured debt into a secured debt with the home.
CONVENIENTLY the lien stripping provisions of the old bankrupcy law have been removed thus where you used to be able to bifucate an undercolateralized home loan into secured and unsecured, we now have an unrealistic situation.
For those constitutional purists, don’t forget bankrupcty is one of the few rights in the BODY of the constitution.
Hey why all this focus on bad loans for mortgages. Everyone ignores the atrocious student loan situation. Colleges in bed with the banks and the Gov’t dupe kids and parents into floating monstrous loans (while tuitions continue to rise). When students get out of school owing 20, 30, 40 thousand dollars many of these loans can’t be repaid and are defaulted on as well. And the Democrats want to increase money to the program? Does anyone dare to say enough? Because education is good. Repeat the words, education is good, good, good...
BNP Paribas Freezes Funds as Loan Losses Roil Markets (Update3)
As all written offers are presented to the listing agent on behalf of the sellers, I was in a position to see what loan programs were the most popular.
The vast majority of the loans were 100% LTV.
IOW, many buyers opted to skip the entry level property and jumped up to the move-up market...with the rationale that appreciation would enable them to refinance better terms.
Many self-employed buyers also used 'stated income' programs aka liar loans, because in the 'old days', lenders would only use your adjusted gross (taxable) income and not the gross income.
This explains your post here...many buyers are caught in a downturn or stagnant market with their interest rates adjusting...buyers with decent credit who just gambled...and lost.