March 2007
Monthly Archive
31 Mar 2007 05:58 am
It’s a homeownership crisis
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By year’s end an estimated 3 million of them will lose their homes. Disproportionately, they will be black and Latino, an unfortunate effect of the marketing practices of subprime brokers and lenders. Home Mortgage Disclosure Act data from 2005 reveal that more than 50 percent of black and 46 percent of Latino home buyers received subprime loans, compared to 17 percent of white borrowers. Many of the minority borrowers could have qualified for more favorable terms. Though the softening of the home market and the rise in interest rates have affected all homeowners to some degree, they have a profound impact on those who hold subprime loans. These high-risk loans go to borrowers with marginal credit, many of whom have already refinanced to the point they have no equity. |
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search for : Home Mortgage Disclosure Act, subprime loans
30 Mar 2007 07:37 am
Builders Keep Building Despite Lending Woes
| Alex J. Pollock recently wrote,“If private investors want to take credit risk, and borrowers want to take a chance in order to own a house, should they be allowed to, even if it might lead to consequences … . I’d say they should. Credit is a central force in a market economy, and boom and bust cycles are the unavoidable price of achieving the long-term growth that markets — and nothing else — create.” Should builders consider Pollock’s opinion as they look towards the future? Is the current subprime lending scenario as bad as the media make it out to be? Can the real estate marketplace endure $1.3 trillion in mortgage delinquencies and defaults? “Builders are uncertain about the consequences of tightening mortgage lending standards for their home sales down the line, and some are already seeing effects of the subprime shakeout on current sales activity,” said National Association of Home Builders Chief Economist David Seiders. |
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search for : credit risk, borrowers, Builders, National Association of Home Builders
29 Mar 2007 07:24 am
Subprime losses lead to drop in home ownership
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About 2.4 million holders of subprime mortgage loans made between 1998 and 2006 will lose their properties to foreclosure, according to a report from the Center for Responsible Lending, a non-profit policy and advocacy organization for home owners.Worse, that will result in a net home ownership loss of one million households. CRL’s analysis rebutted the mortgage industry’s claims that the increase in subprime loans has opened up home ownership for millions of low income buyers. Instead, CRL contends, relatively little subprime lending is used for first-time home buying. Testifying before the House Finance Committee today, CRL’s president, Michael Calhoun, said the primary reason for the jump in foreclosures is “the abandonment of underwriting standards.” |
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search for : subprime mortgage loans, home ownership
28 Mar 2007 07:48 am
Another benefit to home-seller financing
| Some homes take longer to sell than others, adding anxiety to sellers who absolutely have to get a transaction closed within a specific period of time. And, when it rains, it pours. For example, I recently got a call from a former college classmate who had taken a new job in a different state. After his home sat on the market for months, he finally struck a deal with a potential buyer. For weeks the deal appeared to be headed to closing, and the seller, feeling confident with the buyer’s borrowing power, had even made a down payment on another home. The seller became upset, however, when the buyer walked away from the deal because the buyer would not agree to a “soft prepay” loan provision offered by a national lender. |
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search for : buyer’s borrowing power, down payment
27 Mar 2007 07:29 am
Your Home: 5 tips if you’re in too deep
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Bo and Ana Apostolache loved their three-bedroom home on a cul-de-sac near Irvine, Calif. when they bought it six years ago. Best of all, they could easily cover the $1,400 monthly payments on their $175,000 mortgage. Over the next few years, as interest rates dropped and their home price tripled in value, the couple refinanced several times and tapped $200,000 worth of equity to pay for home improvements - and a Barbados vacation. By 2005, although they had doubled their loan balance, their payments had increased by only $400 a month, thanks to an interest-only adjustable-rate mortgage with an initial rate of just 3.75 percent. |
search for : monthly payments, mortgage, interest rates, interest-only adjustable-rate mortgage
26 Mar 2007 07:23 am
Putting a local perspective on the subprime mortgage crisis
| Are there people with subprime loans in Asheville NC? Yes. Are some of those people going to have problems when their mortgages readjust? Yes. And if you think you are one of them, we encourage you to contact your lender sooner than later to explore your options. Remember, the people who are predicted to face the greatest problems are those in states with stagnant or declining real estate values where it will make it difficult to impossible for an owner to refinance into a conventional loan. Expect to see the most significant impact in states like California, Florida, Arizona and Nevada, where real estate prices had a huge run-up or in the industrialized states like Michigan, which have had heavy job losses. |
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search for : subprime loans, Asheville NC
25 Mar 2007 08:09 am
All Subprime, All the Time
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At the risk of being all subprime, all the time, this week we look at what I think are the real risks for the economy as a result of the subprime debacle. How can one side say it is a contained risk (and in one sense it is) and not a problem for the economy while another side says it will drag the US into a recession and thus be a drag on the world economy? The answers will give us a handle on the whole issue, as we look at how the problem developed. |
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