Subprime Problems » Borrowers

Subprime Fall out continues

Hansen — Mon, 13 Oct 2008 15:39:28 +0000

As we’re emerging from one of the worst weeks in Wall St. history, it seems clear the contagion brought forth by the subprime mortgage problems is undeniable. According to the implod-o-meter, 258 mortgage lenders have gone belly up since 2006. Housing prices continue to fall throughout the country pinching homeowners who greedily maxed out their home equity lines to buy flat screen TVs and new SUVs. Oops. New home owners are licking their chops hoping prices will continue to fall, but will they be able to get a mortgage even if they do?

Subprime Delinquencies Stay Brisk

Hansen — Mon, 25 Aug 2008 23:34:56 +0000

Subprime delinquencies continue to increase, according to S&P. Last month subprime delinquencies rose 7%. Jumbo loans continued to outpace all mortgage delinquencies, which should keep a tight lid on new jumbo originations as well as the strong premium paid for those mortgages. Signs are also growing that the subprime payment plans offered to troubled borrowers are also beginning to fail.

Subprime Problems May Last Into 2009

Hansen — Fri, 13 Jun 2008 17:52:38 +0000

2007 and 2008 may not be the only years with massive subprime mortgage delinquencies. It seems as if subprime delinquencies may continue to rise into 2009. At least this is the opinion of the National Association of Realtors. At present, the delinquency rate on subprime loans is around 20%. Some believe that this forecast could rise by as much as 50%, putting delinquency rates going forward at 30%. For the NARs part, it sees a 25% increase, boosting the delinquency rate on subprime mortgages to 25%.

Paulson, Lenders Discuss Subprime Relief

Hansen — Sun, 02 Dec 2007 16:53:12 +0000

Back on the table, and helping to buoy the financial markets last week, is the possibility that wholesale relief will come to subprime mortgage holders next year. It is estimated that some $362 billion in subprime mortgages will reset next year adding 30-40% to subprime mortgage borrowers monthly payments. A huge majority of these resets will come in quarters two and three in 2008. US treasury secretary Hank Paulson is advocating wholesale forbearance for subprime resets in 2008.

Here Come the Subprime Mortgage Resets

Hansen — Mon, 22 Oct 2007 17:38:43 +0000

Housing problems are not over. I know that we would all like to think that they are, but they are not. An interesting graph from CreditSuisse via Econbrowser shows the dramatic increase in subprime resets that we are about to witness in 2008. This will further roil the housing and the financial markets. Do not listen to those who explain that this is already priced into the stock market, either – it isn’t. Not after Uncle Ben pulled his rabbit.

Subprime Problems Fosters Greed at Paulson

Hansen — Sun, 14 Oct 2007 22:01:54 +0000

Paulson & Co., infamously known for shorting subprime securities for a small fortune this Summer, recently gave $15 million to a lobbying group pushing for new bankruptcy regulations that would allow Federal judges to restructure mortgage terms and lower payments on the primary homes of borrowers in bankruptcy. Banks, of course, are up in arms about the deal, which Paulson backs, ostensibly, to help homeowners stay in their homes. Take a look at the BusinessWeek feature on this issue.

Mortgage Defaults Stabilizing in US

Hansen — Tue, 25 Sep 2007 00:22:01 +0000

The Associated Press is reporting that default rates in the US mortgage market are stabilizing. It seems unlikely that the recent Fed rate cut will do much to affect this number. Only about 5 percent of all US mortgages are subprime and only about 1/5 of those loans are in default, or around 1% of all US mortgages.

Sept 13 Deadline for New Subprime Rules

Hansen — Tue, 11 Sep 2007 03:24:10 +0000

Freddie Mac (NYSE: FRE) and Fannie Mae (NYSE: FNM) must have fully implemented their regulatory bodies new rules by September 13. Each company has agreed to continue to purchase subprime loans in the future. The new rules will impose much stricter standards on borrowers with poor credit history, in order to protect them from overborrowing and other pitfalls of subprime loans.

Subprime Problems Easing?

Hansen — Fri, 07 Sep 2007 18:05:35 +0000

Relief is insight for the mortgage industry said Mortgage Bankers Association (MBA) president. Despite horrific numbers, it seems as if an overwhelming percent of the problem is located in four states: California, Florida, Nevada, and Arizona. Foreclosures in these states have been disproportionately contributing to the subprime fall out. But is that all of the story? The pain is hitting financial institutions indiscriminately, hardly limited to regional banks in the Southwest and Southeast. Moreover, much of the pain has been exacerbated by lower home prices, which have hit all levels of homes. Let’s hope that these problems are contained, but more shock will come.

Subprime Bond Buyers Shrug Off Bush Plan

Hansen — Mon, 03 Sep 2007 18:14:28 +0000

Many subprime bond investors did not overwhelmingly applaud President Bush and Co.’s subprime plan, most considering it too little too late. The delinquency rate on subprime mortgages has battered these bond holders. The bond market continues to see a large influx of mortgages that were sold in 2006 a time of particularly low lending standards.