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Tag Archives: Subprime Loans
Option-Arm Foreclosure Rate Now Higher Than Subprime
What are the prospects for curing these loans? Most bulls assume cure rates of 85% or better will mop up this mess. With less than a quarter of loans curing, foreclosure is the most likely outcome for shadow inventory even if cure rates continue to improve. Distressed inventory will be with us for a long time. Continue reading
Australia Learns Nothing From US Housing Bust
In the US banks loosened lending standards and kept right on doing it until the whole mad scheme blew up. Australian banks are now making the same mistake.
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Posted in Fresh Perspectives, Home Economics
Tagged Australia, Foreclosures, Home Prices, Housing Bubble, strategic default, Subprime Loans
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Government Subsidies Diminish Home Ownership
We have managed to obtain the opposite of what we desire, and we are paying a huge amount of money to do so. We would be better off to do nothing. The money we spend as a society to encourage home ownership actually diminishes it. Continue reading
Posted in Best Of The Storm, Fresh Perspectives, Home Economics, Industry & Technology, Mortgage News
Tagged Alt-A Loans, Debt-to-Income, Fannie Mae, Freddie Mac, GSEs, Home Equity, homedebtors, Interest-Only Loans, NAR, Negative Amortization, Option-Arm Loans, Ponzi Scheme, Recast, Renting, Reset, Subprime Loans, The American Dream
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We Can’t Afford To Subsidize Housing
From 1994 to 2005, the homeownership rate reached record highs, thanks largely to innovations in the mortgage-finance market that reduced down payments and minimized equity. This shifted the basic wealth-building proposition of homeownership away from savings to an almost exclusive focus on capital gains. Continue reading
Elitist Bank Economists Blame Housing Bubble on Subprime Borrower’s Poor Math Skills
This study is offensive. It provides no useful or actionable information. What are we supposed to do, start giving borrowers math tests? It was clearly undertaken to support an agenda and disguise the truth — the opposite of what academic pursuits are supposed to do. Everyone involved should be embarrassed. Continue reading