Whistling Past The Graveyard or An Un-happy Ending?
From IBD with our Nattering in italics: California... has by far the highest share of home loans to borrowers with spotty credit histories.
So far... California's economy continues to create jobs. That helps people keep their homes, propping up prices and letting homeowners with adjustable rate mortgages refinance before rate increases boost their payments.
Leslie Appleton-Young, chief economist at the California Association of Realtors:
"A mortgage taken out in 2003 and 2004 . . . should still have a good appreciation in equity" to allow homeowners who get into trouble to refinance or sell."
California tops the national chart when it comes to risky loans. At the end of 2006, these loans made up 22%, or $256.8 billion, of the state's total mortgage loans outstanding. Florida was next with 10%, followed by New York at 6%, according to First American LoanPerformance.
"California is ground zero for much of the most aggressive lending that we've seen over the past few years," said Mark Zandi, chief economist at Moody's Economy.com.
Yet (due to job growth) the share of subprime loans in California deemed delinquent was 10.9% in the fourth quarter, below the U.S. average of 13.33%, the MBA said.
The delinquency rates in Michigan and Ohio stood at 21.08% and 16.35%. Where layoffs in the emasculated automotive sector have taken their toll...
Double-digit gains in property values are a thing of the past. Many economists say prices could dip this year. They already have, -7.5% from last years peak...
a friendly reminder from the Nattering One... at least 40% of all jobs created since 2000 are housing related.
This includes: loan origination, realtors, escrow, title, appraisal and all construction (new, remodel or addition) related jobs.
Another 20% of overall job growth (mostly service sector McJobs) can be directly attributed to the 40% housing jobs growth.
Thus far, construction spending and new building permits have plunged 35% and California is still whistling past the graveyard.
Question: what happens when most of the 40% growth in jobs goes away and home prices fall further??
Answers: The 20% additional growth in the services sector contracts... in adddition to buyers from 2006, buyers from 2003-2005 start flip upside down and can't refi or sell...
"I fully anticipate that we'll see a higher delinquency and foreclosure rate in California this year and into next," Zandi said. "If the job market started to weaken (in California) it would be a complete mess."
You finish outside Joe... foreclosure rates have just started to rise... its going to be very messy and without a happy ending for many.
So far... California's economy continues to create jobs. That helps people keep their homes, propping up prices and letting homeowners with adjustable rate mortgages refinance before rate increases boost their payments.
Leslie Appleton-Young, chief economist at the California Association of Realtors:
"A mortgage taken out in 2003 and 2004 . . . should still have a good appreciation in equity" to allow homeowners who get into trouble to refinance or sell."
California tops the national chart when it comes to risky loans. At the end of 2006, these loans made up 22%, or $256.8 billion, of the state's total mortgage loans outstanding. Florida was next with 10%, followed by New York at 6%, according to First American LoanPerformance.
"California is ground zero for much of the most aggressive lending that we've seen over the past few years," said Mark Zandi, chief economist at Moody's Economy.com.
Yet (due to job growth) the share of subprime loans in California deemed delinquent was 10.9% in the fourth quarter, below the U.S. average of 13.33%, the MBA said.
The delinquency rates in Michigan and Ohio stood at 21.08% and 16.35%. Where layoffs in the emasculated automotive sector have taken their toll...
Double-digit gains in property values are a thing of the past. Many economists say prices could dip this year. They already have, -7.5% from last years peak...
a friendly reminder from the Nattering One... at least 40% of all jobs created since 2000 are housing related.
This includes: loan origination, realtors, escrow, title, appraisal and all construction (new, remodel or addition) related jobs.
Another 20% of overall job growth (mostly service sector McJobs) can be directly attributed to the 40% housing jobs growth.
Thus far, construction spending and new building permits have plunged 35% and California is still whistling past the graveyard.
Question: what happens when most of the 40% growth in jobs goes away and home prices fall further??
Answers: The 20% additional growth in the services sector contracts... in adddition to buyers from 2006, buyers from 2003-2005 start flip upside down and can't refi or sell...
"I fully anticipate that we'll see a higher delinquency and foreclosure rate in California this year and into next," Zandi said. "If the job market started to weaken (in California) it would be a complete mess."
You finish outside Joe... foreclosure rates have just started to rise... its going to be very messy and without a happy ending for many.
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