Wednesday, December 20, 2006

Subprime: 20% will fail

Center for Responsible Lending (CRL) study reveals that 2.2 million American households will lose their homes and as much as $164 billion due to foreclosures in the subprime mortgage market.

CRL's research suggests that risky lending practices have triggered the worst foreclosure crisis in the modern mortgage market, projecting that one out of five (19.4%) subprime loans issued during 2005-2006 will fail.

Adjustable rate mortgages known as 2/28s (or "exploding ARMs") operate with an initial "teaser" rate for two years, followed by a steep payment increase.


Blogger hemorrhoidforhousing said...

The Tri-Valley is where I'm interested in. I know this falls into the Oakland area but what will happen to all of those rundown POS's in Livermore priced in the mid $500,000's. No fundamentals to really support the prices.

Houses haven't selling because they have taken off the market probably hoping spring will be different. But if they didn't sell in spring '06 what makes people think they will sell in spring '07 for the same inflated price? Oh wait...I know....greed and stupidity.

2:28 PM  

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