Real Estate News Blog June Archive

Subprime lending: Abuse as usual

By Art C. Ryder at 06/28/07 01:31

It would appear that subprime lenders have yet to learn from their mistakes. According to a consumer advocate group, abuses persist industry wide, despite the recent subprime mortgage meltdown. Abuses such as unnervingly low tease introductory interest rates, punishing prepayment penalties, and the world famous “liar loans” are fueling the subprime market as lenders look for cash infusions. The recipe spells disaster as foreclosures are almost guaranteed. As noted before one in three (1/3) of these kinds of home mortgages lead to foreclosure.

Original source: . Subprime lending: Abuse as usual

$19.95 Million For a Neutra?

If you have $19.95 million, why not buy a house built in Los Angeles designed in 1959 by famous architect Richard Neutra. The home sits on 5.2 acres in Bel Air, California. Mind you, the house sold in 2004 for JUST UNDER $6M! Another example of the irrational, ridiculous housing market…

Original source: . $19.95 Million For a Neutra?

New Home Sales Fell 1.6 Percent in May

U.S. new home sales fell in May while consumer confidence hit a 10-month low in June on worries about jobs and the business climate, adding to signs of sluggish economic growth. Foreclosures and a slumping housing market are bringing down the general economy. Selling your home in this market may be a tough way to avoid foreclosure.

Original source: . [404 Check: was link to http:/ / www. nytimes. com/ reuters/ business/ business -usa -economy -newhomes. html?_ r=2&hp&oref=slogin&oref=slogin, anchor: New Home Sales Fell 1.6 Percent in May]

New Home Sales Fell 1.6 Percent in May

U.S. new home sales fell in May while consumer confidence hit a 10-month low in June on worries about jobs and the business climate, adding to signs of sluggish economic growth. Foreclosures and a slumping housing market are bringing down the general economy. Selling your home in this market may be a tough way to avoid foreclosure.

Original source: . [404 Check: was link to http:/ / www. nytimes. com/ reuters/ business/ business -usa -economy -newhomes. html?_ r=2&hp&oref=slogin&oref=slogin, anchor: New Home Sales Fell 1.6 Percent in May]

More Trouble in Subprime Mortgages

Delinquencies and foreclosures among homeowners with weak credit moved higher in the first quarter, particularly in California, Florida and other formerly hot real estate markets. Mortgage lenders and nonprofit housing organization battled over policy initiatives to be made regarding loan practices such as no-documentation loans, in which lenders do not verify that borrowers earn incomes listed on loan applications; prepayment penalties, which make it more expensive to refinance; and underwriting practices that overlook whether borrowers can ultimately repay their loans.

Original source: . More Trouble in Subprime Mortgages

A Cross-Country Blame Game

What used to be a profitable partnership between subprime lenders and Wall Street banks has now degenerated into a cross-country blame game. Ownit Mortgage Solutions, a subprime mortgage lender based in California blames Wall Street banks for the increase in foreclosures and housing defaults by drying up continuing credit approval ratings after making such risky loans turned decidedly sour. Wall Street banks, on the other hand, argue that California mortgage lenders took on too much risk and tried to sell the liability to the street. All in all, foreclosures are a nationwide problem in which lenders have pushed the envelope.

Original source: . A Cross-Country Blame Game

Who's most at risk for foreclosure?

You have a 1-in-3 chance of losing your house to foreclosure if you got an adjustable-rate mortgage, or ARM, in 2004 through 2006 that had an initial teaser rate of less than 4%. Many subprime ARM borrowers about 7/8ths will be in good shape to manage rising interest rates and mortgage payments. Most people facing forclosure are those that had risky loans to begin with, where there was little due diligence on the part of borrowers and lenders.

Original source: . Who's most at risk for foreclosure?

Web Help for Getting Mortgage the Criminal Way

Describes various websites that aim to help home mortgage borrowers obtain mortgage loans in ways that could be described as criminal. Following their recommendations could potentially lead to more than foreclosure… something more like jail time if you heed their suggestions. Be weary of websites that suggest that you lie on your mortgage loan documents.

Original source: . Web Help for Getting Mortgage the Criminal Way

East Coast Money Lent Out West

Documents the crisis in the subprime lending business sector. Mortgage lenders such as New Century Financial and Ownit have themselves filed for bankruptcy while many of their home mortgage loans and refinancing have become delinquent. The reckless lending, lax documentation guidelines and changing interest rate market has lead to the increase in foreclosures by putting many people into homes they obviously would have difficulty affording. The fall out from subprime lending may lead to consolidation of the mortgage industry in the hands of big Wall Street banks.

Original source: . East Coast Money Lent Out West

Quick action can head off a foreclosure nightmare

Suggests the best option if you are unable to make your mortgage payments is to contact the lender and speak candidly about your financial situation. Most lenders want to keep you in the home as long as you can make some payment. Discuss options such as short sales, forebearance, repayment extensions and any other solution you think is manageable. Foreclosure is not the end of the world, and some people who have gone through foreclosure are now in better financial positions.

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