Thread: Real Estate Related News

http://www.car.org/index.php?id=Mzg0MzA=.

More Subprime, Alt-A Mortgages May Head `Underwater' (Update2)

By Jody Shenn
April 29 (Bloomberg) -- About half of recent subprime and Alt-A borrowers may soon owe more on their mortgages than their houses are worth or hold minimal equity, putting $800 billion of debt at greater risk of default, according to Barclays Capital.

Subprime loans from 2006 and 2007 that exceed the value of the homes jumped 5 percentage points to 19.8 percent in the fourth quarter, and may reach 26 percent by midyear if prices drop at the same pace, Barclays analysts wrote in a report yesterday. Alt-A loans, a grade better than subprime, would grow to 23 percent from 16.3 percent.

Many of the loans are in areas where prices are falling faster than the U.S. average, so the size of the shift is underappreciated, New York-based analysts Ajay Rajadhyaksha and Derek Chen wrote...
http://www.bloomberg.com/apps/news?p...fIo&refer=home

from the original story at the top of the thread:

Mar 2007 - Some housing specialists worry that the mortgage industry – with more than 20 companies already in bankruptcy – will raise its lending standards so high that would-be homeowners with less-than-perfect credit will be frozen out. There is even some concern that the pullback in lending will extend the slump in the nation's housing market.

Yes.. this has come to pass... even buyers with good credit are not assured approval. This makes sell houses even more difficult.

Originally Posted by Asylum

from the original story at the top of the thread:

Yes.. this has come to pass... even buyers with good credit are not assured approval. This makes sell houses even more difficult.

But still, wouldn't the banks be more forthcoming with money if they were actually "RECIEVING" money for the houses that forclosed. It seems to me that there needs to be more incentive for the banks to actually sell their empty properties or turn it over to a mangement company to stop "writing-off" all this debt. Is it me or have the banks forgotten that they NEED customers to operate? Yes the fine line is there but getting some money is better than no money.

Originally Posted by Frixxxx

But still, wouldn't the banks be more forthcoming with money if they were actually "RECIEVING" money for the houses that forclosed. It seems to me that there needs to be more incentive for the banks to actually sell their empty properties or turn it over to a mangement company to stop "writing-off" all this debt. Is it me or have the banks forgotten that they NEED customers to operate? Yes the fine line is there but getting some money is better than no money.

They obviously don't think so. They've figured out they can make loans, package and sell them to get their money back instead of holding them and collecting monthly payments. If they default or foreclose on the ones they can't sell, they write them off. With all of them doing this with each other, it will take a while for them to need any new customers to make new loans under the new more restrictive standards. Sound like a giant ponzi scheme?

...the bank's main asset is debt... bad bad bad

Sigh, I assume that is what's making F so volitile? If that was a barometer we'd be riding in 50' waves.

Big Downpayments Return, Hurting Housing Recovery
As U.S. banks mop up the mess from billions of dollars of bad home loans, buyers are finding the days of cheap money are over and, in many cases, tougher versions of old lending rules now apply.


People of modest means have seen the American dream of home ownership move further out of reach. Even affluent buyers, who took advantage the last decade's low interest rates and looser lending standards to move up to more expensive homes or to buy investment properties, are seeing their options evaporate.
Gone are the days when almost anyone could get a loan with a down payment of less than the traditional 20 percent.
http://www.cnbc.com/id/24770001

Originally Posted by Silverbird

Big Downpayments Return, Hurting Housing Recovery
As U.S. banks mop up the mess from billions of dollars of bad home loans, buyers are finding the days of cheap money are over and, in many cases, tougher versions of old lending rules now apply.


People of modest means have seen the American dream of home ownership move further out of reach. Even affluent buyers, who took advantage the last decade's low interest rates and looser lending standards to move up to more expensive homes or to buy investment properties, are seeing their options evaporate.
Gone are the days when almost anyone could get a loan with a down payment of less than the traditional 20 percent.
http://www.cnbc.com/id/24770001

easy money is long gone... even HELOC's are had to get...