Subprime Market

[Bullitt]

From Bloomberg 3/13, sorry if this is happens to be duplicate post from elsewhere on the board. This prophecy was written before BSC's crash came to the public eye.
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S&P Says End in Sight for Writedowns on Subprime Debt (Update6)

By Jody Shenn

Standard & Poor's, the ratings company criticized for missing the beginning of the mortgage collapse, now says the end of subprime writedowns is in sight.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a6oPHc1OQMxI&refer=home

 

[robo]

California man losing nine homes in mortgage mess
Sun May 11, 2008 1:21pm EDT Email | Print | Share| Reprints | Single Page| Recommend (13) [-] Text [+]
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¥ € $ - Learn. Practice. Trade.By Dan Whitcomb

LOS ANGELES (Reuters) - A California man who has defaulted on nine homes and expects banks to foreclose on all of them, forcing him into bankruptcy, says he now considers it a mistake to have invested in the real estate market.

Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.

"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."

Forgaard bought a house in Santa Cruz, about 60 miles (100 km) south of San Francisco, in 2000. Four years later, using $800,000 in stock options, he began snapping up investment properties, putting 10 percent to 40 percent down on negative amortization loans -- in which payments do not cover the interest so that a borrower's balance grows over time.

It was those "neg-am" loans, which include triggers causing payments to balloon if the debt reaches a certain percentage of the original balance, that would come back to haunt him.

"I knew I was sitting on time bombs," Forgaard said. "I knew the market was going to go soft and I knew that property values would decline. But I figured that I had enough equity to survive the storm and sell or take the loss and refinance.

"I didn't anticipate a downturn of epic proportions such that home values are 40 percent less than they were," he said.

The mortgage market has melted down in the past two years in a crisis that began in the subprime sector and has left millions of Americans facing the possibility of foreclosure on their homes. Continued...

http://www.reuters.com/article/domesticNews/idUSN0952458820080511

 

[robo]

Arson to avoid foreclosure?
By Ken Bensinger, Los Angeles Times Staff Writer
April 21, 2008
Some folks celebrate their last home mortgage payment by setting fire to their loan agreement. Lately, some people behind on their mortgages are simply setting fire to their homes.

In what appears to be the latest symptom of the nation's mortgage meltdown and credit crisis, insurers, law enforcement officials and state agencies nationwide report a jump in home and automobile fires in the last year believed to have been set by owners unable to pay their debts. The numbers are small, but they're leading the insurance industry to scrutinize more closely what seem to be accidental blazes.

"We've seen a dramatic increase in this kind of fraud," said Dan Bales, director of fraud investigations at Mercury Insurance. "People upside-down on their house with variable-interest-rate loans, or upside-down on their cars, are pretty quick to burn their property right now."

http://www.latimes.com/business/la-fi-arson21apr21,1,4460977.story

http://blogs.usatoday.com/ondeadline/2008/04/facing-foreclos.html


http://mybackpagesbyjessefelder.blogspot.com/2008/04/foreclosures-burning-down-house.html

Last week, a Sacramento-area couple were arrested on allegations that they burned their Jeep and drove their Nissan pickup into a river, then filed fraudulent insurance claims. According to investigators, the wife admitted she was trying to escape her $600 monthly car payment.

 

[luv2read]

Mortgage delinquency on the rise

Outlook for delinquencies worsens as lower home prices create cycle of increasing defaults.

By Ben Rooney, CNNMoney.com staff writer
May 12, 2008: 3:48 AM EDT
NEW YORK (CNNMoney.com) -- Mortgage delinquencies will continue to rise over the next six to 12 months as home prices decline and economic conditions remain difficult, according to one forecast released Monday.
The Core Mortgage Risk Monitor (CMRM), an index of foreclosure risk compiled by real estate data analyzer First American CoreLogic, increased 16% compared with the same period last year.
CoreLogic analyzes house price trends, foreclosure rates, economic health factors and fraud propensity to predict the chances that future mortgage delinquencies will occur.
The index, which has increased over the last four quarterly reporting periods, is now 47% higher than it was in the first quarter of 2002 when the last recession was winding down.
Nationwide, the markets with highest levels of delinquency risk also had double-digit declines in home prices and weakening labor markets.
"House price depreciation factors are now outweighing economic stress factors," said Mark Fleming, CoreLogic's chief economist.
Of the top 10 markets with the highest risk of delinquency, eight are in California and two are in Florida. Previously, markets in states like Michigan and Ohio, where the labor market has been weak, dominated the list of most delinquency-prone markets.
But rapidly declining home prices, particularly in places like California and Florida where speculative buying drove prices up during the housing boom, are causing a shift in the nation's mortgage delinquency trends.
CoreLogic forecasts delinquency-risk to be worst in California's Inland Empire region, where home price appreciation has declined more than 21%. Elsewhere in the golden state, the Los Angeles and Sacramento areas are considered high risk for delinquencies.
Meanwhile, urban centers in Texas are expected to have a low risk of delinquency. The Dallas-Fort Worth area tops the list, followed by Tulsa, Okla.
During the same time period last year, Detroit, Mich., led the nation in delinquency risk. In Ohio, Youngstown, Dayton and Toledo were also on the list of high-risk markets. Conversely, Phoenix, Ariz., and West Palm Beach Fla., were among the cities with the lowest risk of delinquencies last year.
"High house price markets are now high risk markets," said Fleming.
Falling home prices have created a vicious cycle: Lower prices lead to more defaults, resulting in excess inventory, which causes demand to fall, bringing home prices even lower, leading to more defaults.
This downward cycle puts pressure on the broader economy, with declining home prices impacting personal wealth and consumer confidence

 

[Fivetears]

Housing Crisis Brings Veto Threat
The White House issued a surprise veto threat against a Senate bill aimed at preventing hundreds of thousands of foreclosures. The threat signaled more partisan warfare on Capitol Hill as homeowners struggle. The Senate bill would, like a similar bill already passed by the House of Representatives, create a new fund to underwrite up to $300 billion of failing home loans. It would also offer billions of dollars in emergency housing relief. Proponents say the bill could save 400,000 homeowners from foreclosure. But the Bush administration House objected to a provision that would give state and local governments money to buy and fix foreclosed properties. Congressional leaders were trying to hammer out a final bill and send it to President George W. Bush before lawmakers leave town at the end of next week for the July 4 holiday. Some House Republicans also threatened to stall a final version of the housing bill, demanding more information about preferential mortgage terms given to two Democratic senators by Countrywide Financial Corp.
http://news.yahoo.com/s/nm/20080620/ts_nm/housing_crime_dc_2

 

[Fivetears]

Florida sues Countrywide over mortgages
Florida sued mortgage lender Countrywide Financial Corp for predatory lending practices today, alleging the company at the center of the U.S. mortgage crisis made subprime loans to people who could not repay them. The Florida attorney general filed the lawsuit, which names Countrywide Chief Executive Angelo Mozilo as a defendant, in state court in Broward County, Florida.

Last Wednesday, officials in Illinois and the company's home state of California also sued Countrywide. On the same day, shareholders approved the company's takeover by Bank of America Corp. A spokesman for Bank of America, which is expected to complete its planned acquisition of Countrywide in July, declined to comment on the Florida lawsuit.
http://news.yahoo.com/s/nm/20080630/bs_nm/countrywide_lawsuit_dc_5;_ylt=AnK4h1o4pNHS_3OGxSp4Z4QE1vAI