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US mortgage crisis goes into meltdown
Telegraph UK ^
| 24 February 2007
| Ambrose Evans-Pritchard
Posted on 02/24/2007 5:42:05 AM PST by shrinkermd
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Even Dr. Pangloss would have a hard time being upbeat about sub-prime loans.
To: shrinkermd
Too bad the author of this story found it necessary to have it printed in the UK - because it would be laughed off the page in the US.
2
posted on
02/24/2007 5:44:02 AM PST
by
xcamel
(Press to Test, Release to Detonate)
To: shrinkermd
By the way, the writer of this article was a great help to FR and other conservatives holding the fort against the Clinton Crime Machine - he wrote the book "The Secret Life of Bill Clinton" .
3
posted on
02/24/2007 5:44:06 AM PST
by
ikka
(The US Catholic Bishops' position on immigration is objectively anti-American.)
To: ikka
Yes, I agree Pritchard is a balanced and focused man who writes well and thinks even better. His book on Bill Clinton was exceptional.
He writes for the Telegraph which also broke many of the story lines on the Clintons. Some of our MSM and financial press dislikes any kind of bad news; hence, the public is blind sided when nasty changes occur.
I hope he is over reacting, but his facts support his thesis--the sub-prime market is in difficulty and it will affect other financial systems.
To: shrinkermd
Poor performance by borrowers with sub-prime loans will affect the overall mortgage market only to the extent they cannot meet their payments and to the proportion this is of the loan portfolio.
Sub-prime loans are only a small minority of loans and just because a borrower cannot perform does not mean that the lender does not receive some payments from him. Even if the lender must move to collect or foreclose, his loss is not the entire loan, but maybe at worse a fraction.
In short, this is all overblown. It is the 2007 equivalent of last year's breathless worry over the "tipping point". Remember that? The MSM seems to have forgotten it and moved on to other worries.
To: xcamel
...it would be laughed off the page in the US.
So instead of simply sniping perhaps you could explain how he is wrong.
If you've got knowledge then share it!
To: shrinkermd
We began seeing this in our law office about a year ago. All of a sudden people started coming in with foreclosure notices from loan companies we had never heard of with principal balances equal to or in excess of any reasonable FMV of the real estate securing the notes. When we looked at the financial situations of these people, we saw huge credit card debt and usually previous personal bankruptcies. In other words, no one in their right mind would have lent these people 10 cents! Quite literally all of these mortgages were written with "internet loan companies", through "mortgage brokers" or resulted from junk mail solicitations, the type that send a "check" in the mail offering no closing cost mortgages to "pay off your high interest credit card debt". Some of these people keep getting solicitations even while in foreclosure, often from the foreclosing mortgagee!
Invariably, the closing documents are filled with RESPA violations, the assignments or mortgage recordings screwed up and the notices of default and right to cure defective. HSBC is a prime offender in these areas. I am convinced that they run that business with a bunch of 12 year old illiterates!
The latest trend is for the foreclosing mortgagees to contact the debtors and try to convince them to keep their homes, even offering to rewrite the mortgages in an effort to avoid ending up with the properties which cost them money to carry and which they seldom if ever can sell for what they are owed.
None of this excuses the financial irresponsibility of the debtors, but these lenders are getting exactly what they deserve for being so abysmally stupid with other people's money!
The advice we give our clients is stick with your local S&L or credit union. You know them, they know you and if its a mistake all the way around to make a loan, the bank will tell you that. If the loan is made, it will be made right the first time and if something goes wrong there will be a local loan officer to talk across the table to.
7
posted on
02/24/2007 6:01:05 AM PST
by
Kolokotronis
(Christ is Risen, and you, o death, are annihilated!)
To: philman_36
Because "the mortgage meltdown" is just the birds coming home to roost" for sub prime lenders. If they lend money to unqualified borrowers - they get what they deserve..
interest only, 2nd and 3rd mortgages, what did they think was going to happen?
That being said, the reality is that "the meltdown" affects only about 5-8% of the total market.
8
posted on
02/24/2007 6:04:55 AM PST
by
xcamel
(Press to Test, Release to Detonate)
To: xcamel
My advice to everybody, don't take out a loan on a house that you can't afford. Be realistic, start small and work your way up. It's less stressful and it can be more worthwhile financially. Don't take out second mortgages for credit card debt, just stop spending money on things you don't need, and definitely don't take on an interest only loan.
9
posted on
02/24/2007 6:13:27 AM PST
by
flynmudd
(Proud Navy Mom to OSSA Blalock-DDG 61)
To: xcamel
'zackly. Why does anyone think they call them sub-prime ?
To: flynmudd
No matter how good or bad the economy is, there is always a percentage "beyond the margins". This is the percentage that gets the news coverage. The "very poor", the "over leveraged", "the sudden filthy rich" etc. etc.
If you follow the money, the stories are always coded with "weasel words" to "up the dread level" - also signaling the "short sellers and speculators" to dive right in and grab the remaining asset base for pennies on the dollar.
But alas, I was "just sniping"
11
posted on
02/24/2007 6:20:33 AM PST
by
xcamel
(Press to Test, Release to Detonate)
To: theBuckwheat
"Sub-prime loans are only a small minority of loans and just because a borrower cannot perform does not mean that the lender does not receive some payments from him. Even if the lender must move to collect or foreclose, his loss is not the entire loan, but maybe at worse a fraction.
Not only that, these loans end up in the portfolios of those with the least financial sophistication.
Got any junk bond funds? Closed-end high-yield funds? If you reach for yield, you may get burned.
To: xcamel
All nice to know, and thanks for the info, but it doesn't clear up why you think it would "be laughed off the page in the US."
You consider this article non-event reporting?
To: philman_36
14
posted on
02/24/2007 6:43:58 AM PST
by
xcamel
(Press to Test, Release to Detonate)
To: shrinkermd
Bernanke just start lowering interest rates and the MSM will be in Ecstasy informing us how much other are raking in flipping houses!
To: xcamel
But alas, I was "just sniping"
Yes, you were. So good of you to admit it.
To: xcamel
see line 2 in post 11
Got it.
So to you this is all just "housing bubble fear mongering" and you're just setting the record straight, right?
To: philman_36
Are you "Ambrose Evans-Pritchard" or something?
sheesh.
take an economics course or something.
18
posted on
02/24/2007 6:50:08 AM PST
by
xcamel
(Press to Test, Release to Detonate)
To: xcamel
Are you "Ambrose Evans-Pritchard" or something?
No and that depends on what you define "something" to be.
take an economics course or something.
I'll go with "something", since that could be anything.
To: Kolokotronis
Amen. To your tagline, also.
20
posted on
02/24/2007 7:01:47 AM PST
by
wizr
(Do what you love, your God given talent, and God will provide the rest.)
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