Posted on 12/05/2006 5:33:50 AM PST by shrinkermd
Americans who have stretched themselves financially to buy a home or refinance a mortgage have been falling behind on their loan payments at an unexpectedly rapid pace.
The surge in mortgage delinquencies in the past few months is squeezing lenders and unsettling investors world-wide in the $10 trillion U.S. mortgage market. The pain is most apparent in subprime mortgages, though there are signs it is spreading to other parts of the mortgage market.
Subprime mortgages are loans made to borrowers who are considered to be higher credit risks because of past payment problems, high debt relative to income or other factors. Lenders typically charge them higher interest rates -- as much as four percentage points more than more-credit-worthy borrowers pay -- one reason subprime mortgages are among the most profitable segments of the industry....
...Though delinquency rates on subprime mortgages originated in the past year have soared to the highest levels in a decade, economists don't expect any significant harm to the nation's economy or financial systems. But if late payments and foreclosures continue to rise at a faster-than-expected pace, the pain could extend beyond homeowners and lenders to the investors who buy mortgage-backed securities...
(Excerpt) Read more at online.wsj.com ...
To paraphrase Shakespear, "Neither a risky borrower nor a risky lender be."
This is a problem since most of these loans are backed by Fannie Mae and Freddie Mac and those are backed up by taxpayer dollars.
Where the heck did they get those names? Fannie Mae used to be a brand of candy.
Opps, thought this was a story about the Chinese owning most of our national debt.
The borrower is slave to the lender. It's in Proverbs.
www.daveramsey.com
Does the article ever reveal percentages, or are we to assume that the world is coming to an end?
The Bible seems tolerant of slavery, so what's the big deal?
Dave Ramsey deserves high praise. Every day he advises people to live within their means. Most people love to "borrow, borrow, borrow and spend, spend, spend."
This is only the beginning. Wait until summer.
Mortgage companies have no one to blame but themselves. Every day they advertise on TV begging bad debtors to combine all the debts they cant pay so they can go out and ,make more bad debt.
No need to worry. Obama has just introduced a bill that will forgive all debts to homos, race-pimps, lesbians, anyone who hates America, all leftists, liberals, commies, fascists, all muslims, terrorists, drive-by media jackals, anyone is anti-military, anti-religion, dumbocrats, and assorted ilk.
Watch for the Rats to propose legislation to subsidize lower interest rates, no money down, and bailouts to the numbnuts who earn $50K but bought $300 homes.
Could I pretend for a while until my mortrgage is forgiving? I certainly hate parts of America...
"Watch for the Rats to propose legislation to subsidize lower interest rates, no money down, and bailouts to the numbnuts who earn $50K but bought $300 homes."
Better yet watch the RINOs back it and Bush sign it.
Plus have an emergency fund and 3-5 years of espenses for the family in th eform of Term Life. Wish the US government would use the debt snowball.
What do you see happening by this summer? Lowwer interest rates to help the flattening economy?
All the housing stock country was not sold in the last 5 years and not every lone originated during this time frame was not an ARM, or interest only note. What is the percentage of ARM loans of all loans originated in the last 4-5 years? You cannot tell the extent of any potential problem out there without figuring out this data.
I suspect there will be some problem with 15-20% of the loans made in the last 2-3 years. If 25% of these loans go into default you are only looking at 5% of a small number relative to ALL the housing stock in America. There are many true investors waiting in the wings to snap up these homes. The world of investors do not prescribe to the theory of Casey at iamfacingforclosure.com.
Prices may pull back, but the sky will not fall. The dollar may turn out to be worthless in 20 years, but what will that do to home values? How would you like to pay off your loan with 1922-23 marks?
"Alan Greenspan states that the real-estate market has bottomed out.
My real-estate taxes just went up because the value apparently jumped 8%."
Anyone who thiks the assessed value of a home for taxes is in any way the actual value of the property is fooling themselves. Look at Louisiana and the hurricane damage. Local government were taxing vacant lots as though the homes were still there.
Remember, government greed trumps all.
"Watch for the Rats to propose legislation to subsidize lower interest rates, no money down, and bailouts to the numbnuts who earn $50K but bought $300 homes."
No, they bought $150K homes but paid $300K for them
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