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Here's your daily dose of pessimism...those of us who thought the housing market may turn around in late '09 or early '10 may be in for a rude awakening. As shown in this 60 Minutes piece, there are millions of exotic mortgages - called Alt-A and Option ARMs - still poised to reset in the coming years. These "resets" may see foreclosure rates as high as 50-70% as the monthly payments increase to realistic levels. Commercial real estate, car loans and credit cards are all expected to see increased defaults as well.
In a more positive note, the fed lending rate was slashed to near zero today. This may allow more people to qualify for real loans and/or refinance the crazy ones they are presently in.
Tuesday, December 16, 2008
More Mortgage Woes
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5 comments:
My contacts in the financial world have told me for many months that we still haven't seen the last of the problems in the mortgage market.
And while refinancing at lower rates is a great solution, it remains to be seen if those mortgages sold as securities can be unwound to take advantage of the rates.
So do you think there will be a demand for lawyers dealing with foreclosures, loan workouts and bankruptcy?
:-D
...and collection agencies and repo men and liquor distributors...
Global Patriot - Yeah, I don't know where I've been, but I was under the impression that most of the subprime nonsense had begun to work its way through the system. I now understand why banks are still unwilling/unable to lend...they are hunkering down, waiting for the proverbial "other shoe" to drop. One bright point that Whitney Tilson brought up: Wall St. seems to have already priced all this into the market, and there are bargains to be found. For those that have cash, that is...
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