In the summer of 2005, sub-prime mortgage lending was at its peak. Rates were relatively low and lending guidelines were relatively loose.
At the time, the "standard" sub-prime mortgage product was the 3/27 ARM.
The 3/27 had a few basic traits:
A fixed, 3-year "starter rate"
Every six months thereafter, the mortgage rate changed
The formula by which it changed was (4.999 percent + the 6-month
In the summer of 2005, sub-prime mortgage lending was at its peak. Rates were relatively low and lending guidelines were relatively loose.
At the time, the "standard" sub-prime mortgage product was the 3/27 ARM.
The 3/27 had a few basic traits:
A fixed, 3-year "starter rate"
Every six months thereafter, the mortgage rate changed
The formula by which it changed was (4.999 percent + the 6-month
Over half of the UKs repossession orders are being brought by sub-prime lenders, according to a BBC report. These lenders cater for borrowers with poor credit histories and account for only 6% of the total mortgage market.
Well ladies and gents, don't know about you but I think today is the first time: I've actually managed to breathe since these public holiday's we've had.
For the first time in my life I realised that public holidays aren't actually that cool. Yes I'm getting old, in fact it's my 30th on the 12th June so I'm getting cockier by the minute too. WIZARDMAN is turning 30 years OLD!
I read a Standard
It looks like the cuts by the Fed in interest rates have had a calming effect on potential sub-prime mortgage resets. From a story in the L.A. Times: The great mortgage reset of 2008 isn't turning out quite as advertised.Thanks to interest rate cuts by the Federal Reserve, payments on sub-prime loans with expiring "teaser" rates are going up only modestly when the loans start adjusting -- by just 1% on average last month, one study found...Defaults and foreclosures are still rising, however -- it's just that the culprit isn't solely the payment shocks once feared. Instead, industry experts put most of the blame on tumbling housing prices, which have left many borrowers owing more than their homes are worth after making little or no down payment, taking on second mortgages o
Image via WikipediaI suppose you do have an idea about SUB-PRIME lending. But here I should be elaborate on sub-prime mortgage lending which is a kind of lending at a rate higher than the prime rate charged by a lender. The term “Sub-prime” in mortgage lending in the USA, refers to loans that do not [...]
REUTERS - US TREASURY'S MCCORMICK-SWEEPING REGULATION, BIG INJECTIONS OF PUBLIC MONEY WON'T CALM MARKETSHere Comes the Next Mortgage Crisis by Slate - snip:Subprime was just the beginning. Wait until California's prime borrowers start handing their keys to the bank... California is to mortgage lending what Chicago is to pork bellies. For years, that meant it was a place with soaring house values; today, the foreclosure rate across the state is twice the national average and going up fast. Riverside County, outside Los Angeles, may be the foreclosure capital of the country, with a rate close to six times the national average. And housing prices are in freefall. California should be the poster child for a mortgage-loan bailout. In few other places have so many taken on such onerous debts wi
The Federal Reserve Bank of New York has put together a great National interactive heat map that overlays the residential loan data of sub-prime mortgage holders. I am bringing this to the attention of our readers as I just witnessed a home in inner Berkeley that received 14 offers. I also just read a [...]
BANGKOK, Jan 29 (TNA) – The sub-prime lending crisis in the United States will not escalate to the extent that it could adversely affect the Thai property sector and overall economy, according to an industry executive here.
Sophon Pornchokchai, chairman of the Agency for Real Estate Affairs Co, said as a property price estimator he believed [...]
What is a Sub-Prime Mortgage?
A sub-prime mortgage is a bad credit mortgage, designed for people who have trouble getting a home mortgage because their loan request does not fit the conventional lender guidelines! A sub-prime mortgage can offer financing with less stringent requirements to...
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In the following press release United States Attorney Karen P. Hewitt announced that Alejandro Lopez, Emilio Lopez, Ravinderjit Singh Sekhon, and Linda Velasquez each pled guilty today in federal court in San Diego to conspiracy and wire fraud charges. The defendants entered their guilty pleas before United States Magistrate Judge Nita L. Stormes, subject to final acceptance of the pleas by United States District Court Judge Marilyn L. Huff at the time of sentencing. According to court records, Alejandro and Emilio Lopez were two of the owners of “Century 21 El Dorado,” a San Marcos, California firm (pictured below) that offered real estate and home financing services targeting mostly Hispanic clientele. Alejandro and Emilio Lopez headed the “Lopez Team,” which consisted of, among others, loan officers, loan processors and real estate agents who conducted fraudulent real estate and loan broker activities. Ravinderjit Singh Sekon was a loan officer, and Linda
"If you've been paying attention to the real estate market over the last couple of years, you've probably heard the term "sub-prime mortgage bust". You might even have a vague idea that this is a current real estate problem which is causing problems in the American economy. And if you're just the average person out there in the world, you might not need to know any more about the sub-prime mortgage bust. But if you're a home owner who borrowed money on a sub-prime mortgage or a person currently interested in purchasing any sort of real estate, you should know more about this issue.First things first. To understand what occurred in the sub-prime mortgage bust,you have to know what a sub-prime mortgage is. Basically, when there are borrowers who can not qualify for regular home loans because of their poor credit, they can apply to get a sub-prime mortgage loan. There are different types of sub-prime mortgage loans including interest-only, choose-your-monthly payment and fixed-to-vari
This is a question that most investors are pondering, including myself. Will Sub-Prime Mortgage Issues Impact our Financial Markets in a Way not seen since the Enron scandal? While I am not sure of the answer, here is my point of view.It all started with HSBC warning of higher delinquincies in their mortgage business and was quickly followed by New Century (NEW) announcing that they would not make a profit for the foreseeable future. All that now seems so far away. Making a profit is the least of New Century's worries as higher delinquincies and controversial lending has prompted an investigation into its business, not to mention that the company's almost $3 billion market cap has been wiped out.Last week, Countrywide (CFC) stopped offering 100% financing. Option One and some others followed suit. If this tightening flow through to other areas of the finance spectrum, with auto makers and credit cards, it could spell the end of the fierce consumer spending seen in the US these last
