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.
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.
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.
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.
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
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.
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.