Wednesday, March 28, 2007

Home ownership in Crisis, Home shares plunge, stock Indexes drop after Bernanke Comments!

Home ownership in Crisis, Home shares Plunge, Stock Indexes drop after Bernanke Comments as Massachusetts puts on Brakes!
About 2.4 million holders of subprime mortgage loans made between 1998 and 2006 will lose their properties to foreclosure, according to a report from the Center for Responsible Lending, a nonprofit policy and advocacy organization for home owners. Worse, that will result in a net home ownership loss of one million households. CRL's analysis Rebutted the mortgage industry's claims that the increase in subprime loans has opened up home ownership for millions of low income buyers. Instead, CRL contends, relatively little subprime lending is used for first-time home buying.
The report criticized both lax underwriting - noting in particular a disregard for the ability of borrower's ability to repay loans - as well as dangerous loan vehicles, such as "exploding ARMs," which have low rates for the first two or three years before resetting at much higher rates.
This sounds pretty dire and many of us that watched the predatory lending practices expected but with The news of the FBI investigating possible fraud in Beazer Homes' mortgage lending practices comes amid woes in the homebuilding sector and a recent meltdown in the subprime mortgage sector that has seen several lenders seek bankruptcy protection. Weak demand for new homes, sales at steep discounts and the need for inventory write-downs have taken a toll on Beazer Homes' results. this is of particular interest because Beazer is said to be the largest home mortgage lender in the Nation.
Beazer is suffering hefty losses because of the housing downturn and their shares are dropping dramatically. I am sorry but I do not feel for them. As a result of their predatory lending practices many people were taken advantage of and the crumbling house of cards is spreading throughout the stock market as you would expect.
U.S. stocks fell sharply today after Federal Reserve Chairman Ben Bernanke cast doubt about a recovery in housing and said uncertainties surrounding the economic outlook had increased.
Shares of bellwether companies, including plane maker Boeing Co. and diversified manufacturer General Electric Co. were among the top decliners, along with shares of banks and retailers.
In testimony before the congressional Joint Economic Committee, Bernanke expressed concern about the slowdown in the U.S. housing market, which he said had been the principal source of a slowdown in economic growth that began last spring.
The economic slowdown is not due to the housing Market as Bernanke says but rather the reality of Bush fiasco's catching up with people. With that said I believe Massachusetts is taking the lead in holding these predatory lenders accountable and seeking to ease home owners pain by making it more difficult for lenders to foreclose and seeking creative ways to help affected borrowers pay their mortgages. Massachusetts has been particularly hard it and appears to he heading towards a housing crisis that they are trying to head off.
Just how badly are these predatory lenders in Bush's great economy going to hurt the average American? Just one family in ruin is too much for me and it hurts! But just how far is this going to go and how bad is it going to hurt the country?

James Joiner
Gardner, Ma



1 million people is a lot, foreclosing their home mortgages. I wonder what impact this will have on the ecomony.

UK Home Mortgages Guy
UK Home Mortgages

an average patriot said...

Jordan Klause
I am afraid it will have a great impact and will get a lot worse. I have written in the past that there is a 2nd Great Depression right around the corner and it will not be long now. It will encompass the entire world.