Posted on 08/09/2007 6:33:05 AM PDT by Hydroshock
NEW YORK (Reuters) -- Residential mortgage delinquencies and defaults are becoming more common among borrowers in the category just above subprime, American International Group said Thursday.
AIG (Charts, Fortune 500), the world's largest insurer and one of the biggest mortgage lenders, said total delinquencies in its $25.9 billion mortgage insurance portfolio were 2.5 percent.
It said 10.8 percent of subprime mortgages were 60 days overdue, compared with 4.6 percent in the category with credit scores just above subprime, indicating that the threat to the mortgage market may be spreading.
While maintaining that it is "comfortable" with its mortgage exposure, AIG gave a gloomy assessment of the market in a presentation to investors and analysts.
(Excerpt) Read more at money.cnn.com ...
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.
One thing that gets me is the the financial pundits adn big wigs keep screaming for teh fed or the government to come to their relief. Where these nto teh same people that for so many years screamed against government intervention in the markets?
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.
On Cavuto yesterday Bush said he’d veto any bailout.
Dude, these stories are not intended to elicit sympathy for the borrowers or lenders. They’re a warning to how this mess will impact the larger economy.
Are you getting any sleep thes days.
They got intervention - in the form of excess liquidity. Now that that party is over they want to be saved from their stupidity.
Too bad Bush and Bernanke will say no.
That would be an interesting thing to know. That way we’d know if it was because:
-ARM rates adjusted and went too high to be affordable
-borrowers just ran out of their luck on loans they never really could afford anyway
-straight-up fraud involved
You're right, but apparently some people feel morally superior by declaring they have no sympathy for others. I think it's like some Christians who get off by condemning others to hell.
IIRC that is actually less than most lenders now and pretty close to typical expectations. That's delinquencies, not defaults.
Cavuto also said that only 4% of home loans are involved at this time.
You're all for intervention provided that it hurts the financial markets.
Of course they are, just like the stories of Somalis hurt by the Minnesota bridge collapse are meant to elicit a certain response.
The desired response is the usual: Bush is killing the economy and the little guys are getting hurt. Therefore, we should all get behind Shumer’s bailout plan and save the US from a disastrous “meltdown”.
Remember, this is CNN’s magazine, and they have an agenda.
Exactly.
Both the people who entered into these bad loans and the companies themselves must takt the hit.
No federal bailout.
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.
I see nothing in the article indicating any analysis of how it will impact the larger economy.
It’s an emotional setup, pure and simple.
It may be CNN’s magazine, but facts are facts.
Check out what the market has been doing lately. If you think it is all attributable to left-wing articles, you are sorely mistaken.
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