Rick Sharga, vice president of marketing for Irvine-based RealtyTrac, predicted that residential foreclosure filings nationwide will rise by 20 percent to 25 percent this year.
Reserve Board and the Office of the Comptroller of the Currency, issued a suggestion to lenders. Citing “a significant risk of payment shock and negative amortization,” they urged lenders to exercise more caution. Rumor has it that the Fed has asked lenders not to make/postpone interest rate adjustments on their adjustable loans.[tags] foreclosures, home foreclosures, real estate market[/tags]
How are lenders going to be able to adjust the conditions on loans they no longer own? Most of the mortgages that are/are going to be in trouble have been “securitized” — chopped up and rearranged and sold to investors.
Unraveling who owns what is what has put the securities market in knots. In most cases, changing the terms of the mortgage would require approval from investors, something that is not likely to be forthcoming.
I just don’t think this is going to happen. Rather, these are the kinds of statements that everybody makes (Countrywide _says_ it is working with people to keep them in their homes. What are the statistics?), but no one expects to act on. The regulators can say they advised the industry. The politicians can point to regulators as doing something about the problem. Lenders can say they are trying.
The bottom line will dictate. If lenders think that someone can still pay, they will try to work with the borrower. Again, the evidence is that in most cases they do NOT think people will be able to pay. Prices are trending downward steeply. This means that people who are already under water are going in deeper. The lenders want out as soon as possible. What is the point of giving a borrower more rope if they are going to get hanged in the end anyway? Especially in the most bubbly housing markets, saving your home is purely a function of your ability to pay, not of refinancing or selling the depreciating asset to another sucker.
Notice that the federally-affiliated mortgage lenders (Sallie and Fannie) are now going to enforce the requirement that homeowner equity exceed expected housing depreciation. No one wants to owe more than the shack is worth.
Rational expectations
The number of subprime loans are so small as to have little effect.
There are many adjustable loans that are not subprime. The will still adjust upward.
Dallas Tx attorney
Well…Homes take 18 months on average to work through the foreclosure process.. Imagine what foreclosures will look like 18 months from now!
Verna
San Diego California Dental
The Fed has used over half of its available bullets.. and we’re nowhere near the end of this crisis. We can only hope the changes lenders are making will help at all.
Anna
San Francisco Lawyers