why such Huge Losses if the Loans are COLLATERIZED?

Discussion in 'Economics' started by chewbacca, Aug 3, 2007.

  1. so what if the borrower defaults - the loan is collaterized and home prices have barely budged off the highs....yes the lender may have to take a 20% hit on the foreclosure, but the default rate is low anyway. subprime is like 2% of the market. and I doubt default rates on morgates is greater than 3%.

    trying to make sense of this situation.
     
  2. It's overblown.

    Why did the S&P wait to cut their rating on BS until Friday afternoon?
     
  3. wall street to Ben: we want and we need a rate cut. that was the message sent via today's close.
     
  4. I hear lots more funny biz going on with the BS liquidations.

    This is all crap. Heads need to roll.
     
  5. Why the free lunch gives out to the wall street? It is time to slaughter these fat pigs.

    If fed cave in; we are no difference from socialist Cuba.
     
  6. bdon

    bdon

    you guys might want to check the detroit housing market where mortgage defaults are at a serious high. Banks are dumping well below market. Home values are not holding what so ever.

    one example a home in Bloomfield Hills market value of $535,000 supposedly. Nicest area in the suburbs with one of the best public schools. The house went at a liquidation auction for $138,000. Theres stories like this all around the city. my county alone has 700 homes on the market with nearly 300 in foreclosure.
     
  7. One thing I hope is that foreign investors will lost big time when they had lent their money to purchase these so called secured bonds; and our wall street bankers were smart enough to dump these bonds to labor funds and other public funds.
     
  8. 30% rise in a year and then 5% down begging for a rate cut?
    everyone will put his money to Euro, Pound etc if rate cut happens. Fed is out of control. Rates must be around 10% now with all inflation around
    If they cut it's over for US
     
  9. cramer says 14 million took out mortgages in the past 3 years and 7 million was at teaser adjustable rates.

    now 7 million over 3 years is not a lot and its spread out all over the country. and keep in mind rates are no longer going up and still historically low.
     
  10. opm8

    opm8

    My guess is that $535k house was waaay overpriced and probably worth around $100k to begin with a few years ago. And "nicest area" in Detroit -- does that mean it's 10% less crack whores and gang members than downtown? That city is a shithole and has slums as far as the eye can see for a reason.
     
    #10     Aug 3, 2007