Sinking Fast
According to Barclays Capital analysts:
Mortgage loans are moving underwater at a very sharp pace, far more than suggested by aggregate home price data.
About half of subprime and Alt-A mortgages made in 2006 and 2007 may be "underwater" or close to it by midyear,
putting about $800 billion of debt at greater risk of default.
Borrowers on about 26% of subprime loans from 2006 and 2007 will have equity of less than 10% by midyear, Alt-A mortgages should hold steady at about 23.5%.
How fast are housing prices sinking underwater? Only 10.8% of Alt-A loans were underwater on Sept. 30.
By Dec 31th, that number grew to 16.3% and should grow to 23% by mid year.
Subprime "underwater" jumped 5% to 19.8% in Q4, and may reach 26% by midyear.
The Nattering One muses... connect the dots... OFHEO has California, Nevada & Florida with huge 5-6% Q4 price declines...
S&P Case Schiller confirms with 4% in Feb and 20% Yoy declines. Countrywide has 43% of its portfolio in California; 7% in Florida.
49% of Subprime & Alt-A loans will have less than 10% equity or be underwater by mid year.
The acceleration of defaults is already becoming apparent, we suspect a long cruel summer for real estate prices.
Mortgage loans are moving underwater at a very sharp pace, far more than suggested by aggregate home price data.
About half of subprime and Alt-A mortgages made in 2006 and 2007 may be "underwater" or close to it by midyear,
putting about $800 billion of debt at greater risk of default.
Borrowers on about 26% of subprime loans from 2006 and 2007 will have equity of less than 10% by midyear, Alt-A mortgages should hold steady at about 23.5%.
How fast are housing prices sinking underwater? Only 10.8% of Alt-A loans were underwater on Sept. 30.
By Dec 31th, that number grew to 16.3% and should grow to 23% by mid year.
Subprime "underwater" jumped 5% to 19.8% in Q4, and may reach 26% by midyear.
The Nattering One muses... connect the dots... OFHEO has California, Nevada & Florida with huge 5-6% Q4 price declines...
S&P Case Schiller confirms with 4% in Feb and 20% Yoy declines. Countrywide has 43% of its portfolio in California; 7% in Florida.
49% of Subprime & Alt-A loans will have less than 10% equity or be underwater by mid year.
The acceleration of defaults is already becoming apparent, we suspect a long cruel summer for real estate prices.
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