[seahorse2]

Housing bust isn't over according to this article. Home equity loans dropped by 52% in 3Q of 2006 over 3Q 2005.


$this->bbcode_second_pass_quote('', 'A')nother ominous warning sign that the housing meltdown has only begun and not ended is the huge drop in the practise of taking home equity loans. This is how most of the masses have been leading their lofty lifestyles and buying stuff with money they don’t really have. Now that house prices are falling they are running scared and the worst part is that their bill has actually increased significantly. To put things into perspective there was 52% drop in home equity loans in the 3rd quarter; total withdrawals slid from 235.9 billion in the 3rd quarter of 2005 to 113.5 billion in the 3rd quarter of 2006. Expect this to drop even more by the end of this quarter. Things are not getting better as the press and top economists would have you believe they are actually getting worse. However one should expect a mini rally in housing as the masses are all starting to get a bit nervous and as we all know the masses are never right. Thus mass psychology dictates that this sector will experience some sort of boost and this is already taking place.

[seahorse2]

Subprime issues now starting to affect bond issues a tier above.

$this->bbcode_second_pass_quote('', 'N')EW YORK, Feb 15 (Reuters) - Rising delinquencies on U.S. home loans are hitting higher-quality mortgages for the first time, Standard & Poor's said on Thursday, as it put some of the bonds backed by the largest U.S. mortgage lender's loans on review.

[PrairieMule]

Seahorse2,

GM stands for Ginnie Mae loans. Also Ginnie MAC loans appear as G_M_A_C with spaces which is often confused on a credit report for General Motors Auto Credit GMAC.

[RonMN]

Subprime Mortgage Market Trouble

Quote:

WASHINGTON - Is a blowout taking shape in the impaired-credit mortgage market? Could lax underwriting standards during the housing boom years -- no verification of applicants' incomes or assets, low or no down payments, and big mortgages to people already saddled with heavy consumer debts -- finally be coming home to roost?

The omens are unmistakable.

Delinquencies in the $1.3 trillion impaired-credit mortgage market hit 12.6 percent in the latest quarter, up from 11.7 percent. Delinquencies exceeded 13 percent among borrowers with subprime adjustable-rate loans.

Growing numbers of the companies that make or invest in subprime mortgages are themselves facing financial distress, and some have shut their doors or filed for bankruptcy protection.....

[seahorse2]

Thanks Prairie Mule for that info on GM.

[TWilliam]

$this->bbcode_second_pass_quote('PrairieMule', 'G')M stands for Ginnie Mae loans. Also Ginnie MAC loans appear as G_M_A_C with spaces which is often confused on a credit report for General Motors Auto Credit GMAC.

[seahorse2]

Paper put out by a public policy research organization says issues concerning mortgage backed securities (of which subprime loans are significant), could lead to broad financial decline.

$this->bbcode_second_pass_quote('', 'T')he authors charge that inadequate transparency, massive structural changes in asset composition, and “a credit rating industry ill-equipped to evaluate market risk and operational weaknesses” could result in a broad financial decline, initiated by a weakening housing industry and aggravated by a retracting credit market.

[PrairieMule]

$this->bbcode_second_pass_quote('TWilliam', '
')
Read the quote again PM. In this case they are referring to General Motors Corp.

[TWilliam]

*sniff sniff*

"Is that fire?"

[PrairieMule]

$this->bbcode_second_pass_quote('TWilliam', '*')sniff sniff*

"Is that fire?"

[TWilliam]

$this->bbcode_second_pass_quote('PrairieMule', '')$this->bbcode_second_pass_quote('TWilliam', '*')sniff sniff*

"Is that fire?"

[skiwi]

[url=http://www.321gold.com/editorials/benson/benson022307.html]Subprime Titanic Hits Iceberg:
Wall Street Abandons Ship[/url]

$this->bbcode_second_pass_quote('', '.').Icebergs are interesting because only about 10 percent of the ice is visible above water. Seeing an iceberg in the distance is any Captain's worse nightmare and the iceberg that took down the Titanic was no exception. The famous ocean liner could not maneuver around the massive iceberg quickly enough to avoid hitting it.

This tragic story reminds me of some of the subprime mortgage lending problems that actually began a few years ago. Indeed, we have been watching this iceberg for three years now, and investing accordingly. Anyone aware of the fraud and foolish underwriting that has been ongoing in mortgage origination should be honest enough to admit we've only seen the "tip of the iceberg" so far, and mortgage lending is heading straight towards a massive piece of ice...

[cynicalheretic]

They are on CNBC is talking about the collapse in subprime lending

[peaker_2005]

$this->bbcode_second_pass_quote('cynicalheretic', 'T')hey are on CNBC is talking about the collapse in subprime lending

[Chuckmak]

$this->bbcode_second_pass_quote('peaker_2005', '')$this->bbcode_second_pass_quote('cynicalheretic', 'T')hey are on CNBC is talking about the collapse in subprime lending

[seahorse]

The subprime lending tumor in the US economy may actually be malignant. It is spreading to other markets, and is given some credit for the lowest stock market close since 2003.

$this->bbcode_second_pass_quote('', '"')The subprime issue is directly associated with the liquidity issue," Malone said. "Issues in the supbrime market may spread to non-supbprime areas and may cause lenders to tighten lending standards." Tightening credit conditions in the U.S. could worsen the downturn in the housing market and slow economic growth further. Earlier this week, Freddie Mac one of the largest mortgage lenders in the U.S., said it was tightening its lending standards.

[xarkz]

$this->bbcode_second_pass_quote('cynicalheretic', 'T')hey are on CNBC is talking about the collapse in subprime lending

[PrairieMule]

I know from inside most programs have increased requirements of 20 fico points higher than they were in 2006. I wouldn't be surprised if underwriting tightened up guidelines on derogitory(lates payments), collections and bankrupcy. You wouldn't believe how many Californians have filed for CH 7 bankrupcy from 1995-2005. Seems like half of Californians that appy for a refi have filed a CH7 in the last 15 years, but that's only a guess from someone who looks at credit reports all day.

I heard a buzz that prime dropped a quarter point last week which made for a short spike in business.

[seahorse]

Second largest subprime lender in US faces criminal probe, and may be forced to shut down if its financial backers (banks) don't grant it waivers on lending requirements.

$this->bbcode_second_pass_quote('', 'S')AN FRANCISCO (MarketWatch) -- New Century Financial Corp. said late Friday that it's facing a federal criminal probe and will likely breach a major lending covenant with its financial backers, bringing into question the survival of the second-largest U.S. subprime-mortgage lender.