Circling the Drain – Subprime Mortgage News Round-up
March 13, 2007
It was inevitable – lenders are finally beginning to rethink the “put everyone in a house, even if they can’t afford it and have bad credit” strategy. In 2006, more than 21% of all mortgages were subprime, meaning that borrowers had poor credit which meant they had to pay a higher interest rate. In comparison, just a little more than 7% of mortgages in 2002 were subprime.
Due to increases in delinquicies and defaults, lenders are backing away from subprime mortgages, while others have filed for bankruptcy or are on the verge of doing so.
New Century Financial Closer to Collapse - the second largest subprime lender in the U.S.
Mortgage Lenders Network Files for Bankruptcy - Connecticut’s own subprime lender in trouble
No More 100% Loans for Countrywide - the largest subprime lender is curtailing loans to the riskiest borrowers
Lenders can no longer count on the market to save riskier borrowers – home prices are stabilizing which means borrowers won’t have the cushion of equity to fall back on should they get into financial trouble.
The Subprime Market’s Tough Road
We’ll see what kind of impact all this news will have on the housing market.
Entry Filed under: Connecticut, Credit, Mortgage, Real Estate, Real Estate Market. .
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1. Leo Namiot | March 25, 2007 at 1:37 am
One thing to look at for is those agents who have deals in the works with Brokers placing the loans with a sub prime lender to only find out that the lender is no longer in business or funding loans!
2. berealct | March 25, 2007 at 1:57 pm
It will be interesting…I even have lenders commenting to me that this subprime mess will gravely impact all borrowers – not just those who fall into the subprime market.