Highest Mortgage Default Rate In A Decade
From the National Association of Realtors: “Homeowners with subprime are missing payments more often than any time in the last 10 years, according to a report by investment bank Friedman Billings Ramsey & Co.
The default rate on subprime loans that have been packaged into bonds to be sold to investors rose to 10.09 percent in November, up from 6.62 percent a year earlier. It’s the highest default rate in a decade, exceeding the 10.05 percent level reached in November 2001 at the end of the last U.S. economic recession, the report says.”
“Defaults are rising as rates on many adjustable-rate mortgages reset and personal savings decline. The savings rate last year fell to negative 1 percent, the lowest since 1933, during the Great Depression, Commerce Department data show.” San Diego Century 21 agent
Seems there should have been more government regulation and tighter qualification for subprime mortgages in order to prevent what we’re now facing.
Kelly
Acne Medication
What were the government regulators doing while banks and mortgage brokers were issuing these subprime loans?
Eric
San Diego Tourism
I believe a lot of people who purchased with subprime loans and were not really qualified have to accept the inevitable consequences and perhaps build up their savings and credit while renting until the next purchase opportunity.
Tracy
San Diego California Brokers
It’s much harder for troubled borrowers to get a loan now. The lending industry has tightened up standards for lending to elimintate the slide of foreclosures due to subprime lending practices targeting those troubled borrowers. The local media has presented the facts in a negative light, but a return to normalcy is about to occur.
Andy
San Diego Real Estate Agent
So, who is to blame for all this subprime lending? The Realtors proclaim their innocence from the highest mountains in all the lands, with seven flags from seven hills with bugles blowing and blazing through the night, with a PR campaign to boot and one, which is out of sight.
Chris
SD CA Dentistry
It’s really sad to see how many people aren’t going to be able to pay on their loans if the market doesn’t go back up soon.
Bill
San Francisco law
Defaults will continue to rise. Strategic default is the right option for the homeowner if the house has loss 30% or more of its value. You have to crunch the numbers. If it will take you more than 5 years to recover your equity, my advice would be to default. Stay in the house until the bank kicks you out. Save your mortgage payments and move on. It has to be a business decision.
When a company is losing money it cuts staff, cuts employee benefits, whatever it takes to stay afloat. There is no sympathy for the employees without a job. Why is there sympathy for the bank?