A Follow up
Rising unemployment - Clocking in at 110,000 this month
Declining home prices - Home prices are doing better than last year, but foreclosures, tighter credit requirements and job loss will keep a lid on price.
Alt A mortgage rate resets- More than $200bn of outstanding pay-option adjustable-rate mortgages. More than 40% of borrowers are 60 or more days past due on payments
The home crises is far from over and millions of Americans are still faced with underwater mortgages and increasing mortgage payments. It is estimated that 10 to 12 million more foreclosures may take place. Clearly, the Govt programs are no longer sufficient, if the metric is to slow the foreclosure process and keep homes off the market.
The FDIC acquires failed banks, some 124 just this year and may soon be require failed banks to cut principal mortgage debt rather than forbearing a portion until a later day or lowering interest rates.
FDIC Chair Sheila Blair told Bloomberg news that the FDIC is considering a loss-sharing for failed banks, requiring the banks to write down mortgage principals because job loss is driving mortgage distress.
Last week I wrote that Citigroup had suggested that banks would have to step up and do principal write downs to share in the burden of this great recession. It wont be long before we hear from Obama about how its time for the banks to step up and share the burden. About time, I think
Thanks for Reading
www.yourpropertypath.com
Related Articles
No comments:
Post a Comment