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
They're just copying what the Federal Government does.
"The borrower is slave to the lender. It's in Proverbs."
I know people who believe that but it must be a personal problem. I guess I could consider myself slave to the electric companies the oil companies the grocery stores the tire stores my lungs...etc
Your taxes going up 8% is based on last years sales when they were still going up. If sales are down next year your taxes will be flat or lower, at least that's what I'm expecting in my area. Then you can expect the tax rate to increase to continue the increased revenue stream.
Slavery, as detailed in the Old Testament, was limited to a maximum of 7 years, and every 50 years, on the Jubileee, all the slaves were freed, regardless of whether they had served their full indenture. This applied even to slaves taken in warfare.
The only way a slave-owner could keep his slave beyond the indenture or beyond the jubilee is if the slave opted to remain as a slave. In this case, his ear was pierced and an earring inserted to indicate that he was a willing servant of his master.
Slaves in Ancient Israel would be more properly characterized as domestics, or indentured servants, from a modern understanding. They were not their master's property, since all life belonged ultimately to God.
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"Remember, government greed trumps all."
The ruling elite live in "THEIR OWN LITTLE WORLD", don't they.
Buy what you can afford, and pay off whatever you have to finance as soon as possible.
Don't be like the guy I know who retired early and threw his whole fortune into a McMansion in a gated community with a golf club right before the housing downturn, hoping to cash in big in a few years.
Real estate investments are a form of gambling, and the winners become so at the expense of the others...
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
That must be why they call them sub-prime. I expect they will get worse as the economy slows down. I don't think the the overall real estate will get much worse, though.
Federal National Mortgage Association = Fannie Mae
Federal Home Loan and Mortgage Corporation = Freddie Mac
Yeah, it's very weak (particularly "Freddie Mac"), but you know how bureaucrats love their acronyms - especially the ones that (sort of) spell something they can make into a word of some sort.
Back during the "Depression" era $15,000 homes were being sold for $5,000. The banks were glad to get rid of them. History to repeat itself???
It might, I hope not but it is goign to be messy.
"Your taxes going up 8% is based on last years sales when they were still going up. If sales are down next year your taxes will be flat or lower, at least that's what I'm expecting in my area. Then you can expect the tax rate to increase to continue the increased revenue stream."
Not the way ot works in Maine...if htey revalue, the end result is I pay more. If values go down, they don't revalue,just raise the mill rate so my taxes go up...all that ever happens is my taxes go up.
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