US mortgage carnage

[Kimosabi]

US Adjustable Rate Mortgage Reset Schedule as at January 2007

Source ==> http://www.autodogmatic.com/forum/viewtopic.php?p=1226#1226

It looks like Subprime is going to keep causing pain for the next two years

 

[Kimosabi]

2 more US Mortgage Lenders bite the dust

#43: Kellner Mortgage Investments
#44: Sunset Direct Lending

http://ml-implode.com/

 

[Uncle Festivus]

Now spreading to the next level - Alt-A's?


WASHINGTON (MarketWatch) -- For the first time in the nation's history, a significant number of Americans are being threatened with the loss of their home even though they still have a steady, good-paying job.
It's not just an issue for people with poor credit, those with subprime loans. It also affects people with good enough credit to qualify for a prime loan. Known as Alt-A mortgages, these loans were written for 1 in 5 U.S. mortgages and could have a big impact on the economy and on credit markets -- bigger, perhaps, than the effects of the recent shockwaves buffeting the subprime-lender market, economists say.

In coming months and years, the credit crunch that's now squeezing mainly the poor is likely to hit millions of middle-class homeowners who took out risky loans during the great housing boom earlier in the decade. More than 1 million families will lose their homes in the next few years, by one estimate. Another study predicts 2.2 million foreclosures.
This threat is new in American history. Its impact on the economy, and upon the American Dream, is uncertain.

http://www.marketwatch.com/news/sto...x?guid={1F050B96-5BA3-494D-9D92-FB882963206C}

 

[Kimosabi]

Now spreading to the next level - Alt-A's?


WASHINGTON (MarketWatch) -- For the first time in the nation's history, a significant number of Americans are being threatened with the loss of their home even though they still have a steady, good-paying job.
It's not just an issue for people with poor credit, those with subprime loans. It also affects people with good enough credit to qualify for a prime loan. Known as Alt-A mortgages, these loans were written for 1 in 5 U.S. mortgages and could have a big impact on the economy and on credit markets -- bigger, perhaps, than the effects of the recent shockwaves buffeting the subprime-lender market, economists say.

In coming months and years, the credit crunch that's now squeezing mainly the poor is likely to hit millions of middle-class homeowners who took out risky loans during the great housing boom earlier in the decade. More than 1 million families will lose their homes in the next few years, by one estimate. Another study predicts 2.2 million foreclosures.
This threat is new in American history. Its impact on the economy, and upon the American Dream, is uncertain.

http://www.marketwatch.com/news/sto...x?guid={1F050B96-5BA3-494D-9D92-FB882963206C}

Yep, they'll have to withdraw the troops from Iraq and deploy them into every Mortgage company in America.

This is the new war, GWOM, Global War on Mortgages.

"This threat is new in American history. Its impact on the economy, and upon the American Dream, is uncertain. "

They forgot to mention the impact on the World Economy...

American Consumer stops consuming ==> China sells less stuff => demand for commodities goes down ==> prices of commodities plummet ==> demand for Australian Resources dries up ==> Australian economy goes into recession...

 

[YChromozome]

Yep, they'll have to withdraw the troops from Iraq and deploy them into every Mortgage company in America.

During the Great Depression, Australia was over reliant on Agriculture (like we are over reliant on Resources today) causing Australia to be one of the countries biggest hit. It saw unemployment hit 25%, and this meant those without anything to do went on riots. Sydney had plenty.

So I guess we better withdraw our troops too and get them ready . . .

 

[Uncle Festivus]

WASHINGTON (MarketWatch) -- U.S. home prices continued to fall in January, with prices in 10 major cities now down 0.7% year-over-year, according to Standard & Poor's and MacroMarkets LLC, which released the January Case-Shiller price indexes on Tuesday.
The 10-city index is down 0.7% in the past year, the first year-over-year negative reading since 1996. The 20-city index is down 0.2% year-over-year. A year ago, prices were rising 15%.
"The annual declines in the composites are a good indicator of the dire state of the U.S. residential real estate market," said Robert J. Shiller, chief economist at MacroMarkets, in a statement.

.....and a credit crunch............

Falling home prices will exacerbate credit problems, because many borrowers will not be able to refinance their loan or sell their house because they owe more than it's worth.

......consumers not so confident..............

The Conference Board said its consumer confidence index fell to 107.2 from 111.2, the first decline in five months.

http://www.marketwatch.com/news/sto...189-4AE9-B8E5-ECF89F6095F3}&dist=MostReadHome

 

[Uncle Festivus]

Even Buffet gets it wrong sometimes

~~~~~~~~~~~

NEW YORK (Reuters) - Shares of M&T Bank Corp. , whose largest outside shareholder is Berkshire Hathaway Inc., fell 8.5 percent to its lowest close in 17 months, on Monday after the Northeast U.S. regional bank cut its first-quarter profit forecast amid weak demand for mortgages.

The bank late on Friday projected earnings of $1.50 to $1.60 per share, as much as 19 percent below the average analyst forecast of $1.86 per share, according to Reuters Estimates.

Buffalo, New York-based M&T lowered its forecast by $11 million, or 10 cents per share, because it fetched low bids on some mortgages it tried to sell, and because rising defaults forced it to buy back some loans it had sold. It also said lower lending margins and rising expenses would hurt profit.


"Problems in the subprime residential mortgage lending market have negatively impacted secondary market valuations for both subprime as well as Alt-A loans," wrote David George, an analyst at A.G. Edwards & Sons Inc in a research note dated Sunday.

Alt-A mortgages, short for "Alternative-A," often go to borrowers who can not provide full documentation of income or assets.

 

[wayneL]

http://ml-implode.com/ has it at 41, the number of US mortgage lenders that have croaked it since late 2006:

The count was 36 early last week...

50!

http://ml-implode.com/

 

[Kimosabi]

50!

http://ml-implode.com/

Theres no problem, really...

It's all contained and won't spread to the rest of the financial system.

 

[robots]

Now spreading to the next level - Alt-A's?


WASHINGTON (MarketWatch) -- For the first time in the nation's history, a significant number of Americans are being threatened with the loss of their home even though they still have a steady, good-paying job.
It's not just an issue for people with poor credit, those with subprime loans. It also affects people with good enough credit to qualify for a prime loan. Known as Alt-A mortgages, these loans were written for 1 in 5 U.S. mortgages and could have a big impact on the economy and on credit markets -- bigger, perhaps, than the effects of the recent shockwaves buffeting the subprime-lender market, economists say.

In coming months and years, the credit crunch that's now squeezing mainly the poor is likely to hit millions of middle-class homeowners who took out risky loans during the great housing boom earlier in the decade. More than 1 million families will lose their homes in the next few years, by one estimate. Another study predicts 2.2 million foreclosures.
This threat is new in American history. Its impact on the economy, and upon the American Dream, is uncertain.

http://www.marketwatch.com/news/sto...x?guid={1F050B96-5BA3-494D-9D92-FB882963206C}

hello,

so how can this be?

a person services the mortgage so no issue, they have good paying job as mentioned in the article

why will they lose their home?

nothing more than hype in the media going around

its like the death toll from a plane crash, ch 7 says 20 died, ch 9 says 30 dead, ch 10 says 40 died, official result ?

goodluck

robots

 

[Uncle Festivus]

The Fed's argument -

The damage to the financial system from the woes in the market for riskier types of mortgages is largely contained but bears close scrutiny, said Richard Fisher, the president of the Dallas Fed bank, on Wednesday.

Fisher added that the housing markets may "feel some short-term pain" because 40% of home buyers last year were nonprime, either subprime or Alt-A loans. This pain will make it "less clear whether housing construction has bottomed and how long the housing downturn may last."

The economy will grow more slowly because of the housing market, according to Fisher, but is strong enough "to weather this storm."

A buildup in housing inventory means that responsible buyers will be able to purchase homes at more affordable prices, he said."

Yes, bargains to be had all the way to the bottom for sure, but only for the "responsible buyers".

Meanwhile, US homebuilders continue to post substantial losses, which may indicate the true extent of the bust, & indicates to me that it is not contained to the Sub & Alt-A markets but has already spread.

 

[Uncle Festivus]

hello,

so how can this be?

a person services the mortgage so no issue, they have good paying job as mentioned in the article

why will they lose their home?

nothing more than hype in the media going around

its like the death toll from a plane crash, ch 7 says 20 died, ch 9 says 30 dead, ch 10 says 40 died, official result ?

goodluck

robots

You probably have to read the whole story first, as in the link.

From the article -

But now, because of the recent popularity of loans geared to let people buy a more expensive home than they can truly afford, all it will take is the passage of time to trigger a default. At some point, all these loans are adjusted to switch from a low, subsidized monthly payment to the full amount required to pay off the loan.
In the not-too-distant future, millions of Americans may receive a letter advising them of their mortgage "reset" or "recast" with the same dread they now feel for a pink slip or for bad news from their oncologist. The only difference: They know (or should know, if they noticed what they were signing) exactly what's coming: An average monthly increase of $1,512 in their monthly mortgage payment.

So no, they wont be able to service their loan.

Final death toll, to use your metaphor - much higher

I wish them more than good luck - they are going to need it

 

[YChromozome]

Theres no problem, really...

It's all contained and won't spread to the rest of the financial system.

Damm right. The PPT (Plunge Protection Team) is on to it all ready. . .

. . . They are handing out limitless credit cards to those involved, to prevent it spreading to consumer spending and confidence.

 

[robots]

hello,

so 50 lenders have gone bust and what has it done?

they have to fill pages with something

thankyou

robots

 

[Kimosabi]

hello,

so 50 lenders have gone bust and what has it done?

they have to fill pages with something

thankyou

robots

 

[Uncle Festivus]

hello,

so 50 lenders have gone bust and what has it done?

they have to fill pages with something

thankyou

robots

Hello Robots,
I'm sorry you cant see the bigger picture but the data is there if you look for it. The focus has been on sub-prime mortgage lenders, but what may be the bigger story is the bust in the housing market at the same time, each feeding off each other, & no sign of a bottom yet.

MIAMI — One by one, some of the nation's largest home builders have seen the slump in the housing market crush quarterly earnings.

Lennar Corp. became the latest victim Tuesday, with a 73 percent plunge in first-quarter earnings and predictions that it is going to fall short of 2007 earnings goals. Since the start of February, home builders KB Homes, Hovanian Enterprises and Toll Bros. all reported falling profits.

Stuart Miller, Lennar's president and chief executive, said a lack of demand for the winter-spring buying season, new problems with subprime lenders and higher-than-desired land costs hurt profits.

The company reported drops in new home orders and building starts, and that Florida contained some of the slowest new home markets. Lennar shares fell 4 cents, or less than one percent, to close at $44.50 on the New York Stock Exchange, after decreasing almost 3 percent earlier in the day.

"These are difficult times for the home-building industry," Miller said on a conference call. "The reality is that market conditions are still challenging at best and in some markets continuing to deteriorate."

D.R. Horton Inc.'s chief executive, Donald Tomnitz, probably summed it up best in early March when he publicly declared the housing business will "suck" the entire year.

Here is a table of homebuilders exposure to sub-prime; very little exposure yet still getting hammered. Homebuilders will be the next sector to start going bankrupt if it keeps going.

 

[robots]

hello,

so SUB-PRIME LENDERS are struggling

so HOME BUILDING COMPANIES may be going to struggle?

so is REAL ESTATE (existing houses, units etc) going to struggle?

is it that easy to piece together?

thankyou

robots

 

[Uncle Festivus]

hello,

so SUB-PRIME LENDERS are struggling

so HOME BUILDING COMPANIES may be going to struggle?

so is REAL ESTATE (existing houses, units etc) going to struggle?

is it that easy to piece together?

thankyou

robots

yes, yes, yes, & yes

 

[wayneL]

yes, yes, yes, & yes

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/04/06/wdetroit06.xml

A house costs less than a car in Detroit

By Alex Spillius in Washington
Last Updated: 1:22am BST 06/04/2007

The mortgage crisis in America has deepened so much that family homes can now be bought for less than £15,200 - the price of a new car.

A four-bedroom home near the original Motown recording studio in Detroit recently sold for £3,700 ($7,000), less than most used cars. A boarded-up bungalow fetched £685, and a three-bedroom house listed for £276,000 attracted just £69,000.........

 

[insider]

http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/04/06/wdetroit06.xml

I might just book a flight to the US of A and pick myself up some houses...