Countrywide No Down Dead
From Reuters
Countrywide, the largest U.S. mortgage lender, on Friday told its brokers to stop offering borrowers the option of no-money-down home loans.
Countrywide is also the largest subprime lender, with $38.5 billion originated in 2006.
Countrywide joins other large lenders that will require homeowners to have at least a 5 percent stake in their homes, including Washington Mutual Inc. and General Electric Co.'s WMC Mortgage.
#2 Subprime lender, Fremont General last month stopped making "piggyback" loans that are often used to make up 100% LTV loans, and last week stopped lending altogether amid pressure from regulators.
The general pullback in credit to riskier borrowers will take a toll on the overall economy, economists at Goldman Sachs Group Inc. said in a research note this week.
"More cautious lending could cut annual new home purchases by 200,000 units in a relatively conservative scenario, higher defaults and foreclosures of existing loans will dump more supply on the market."
Last week, numerous Fed heads claimed there will not be any economic or systemic effects from the sub prime implosion...
Pay no heed to the man behind the curtain, for I am the Great OZ...
So, elimination of no down, tighter lending, 200K less new homes sold... add to this our estimate of 600K less new homes being built in 07... and a rash of defaults and foreclosures...
I think the DR Horton CEO summed it up best... "2007 is going to suck".
Countrywide, the largest U.S. mortgage lender, on Friday told its brokers to stop offering borrowers the option of no-money-down home loans.
Countrywide is also the largest subprime lender, with $38.5 billion originated in 2006.
Countrywide joins other large lenders that will require homeowners to have at least a 5 percent stake in their homes, including Washington Mutual Inc. and General Electric Co.'s WMC Mortgage.
#2 Subprime lender, Fremont General last month stopped making "piggyback" loans that are often used to make up 100% LTV loans, and last week stopped lending altogether amid pressure from regulators.
The general pullback in credit to riskier borrowers will take a toll on the overall economy, economists at Goldman Sachs Group Inc. said in a research note this week.
"More cautious lending could cut annual new home purchases by 200,000 units in a relatively conservative scenario, higher defaults and foreclosures of existing loans will dump more supply on the market."
Last week, numerous Fed heads claimed there will not be any economic or systemic effects from the sub prime implosion...
Pay no heed to the man behind the curtain, for I am the Great OZ...
So, elimination of no down, tighter lending, 200K less new homes sold... add to this our estimate of 600K less new homes being built in 07... and a rash of defaults and foreclosures...
I think the DR Horton CEO summed it up best... "2007 is going to suck".
Comments