From Sub Prime to Alt A to Prime
First sub prime, then Alt-A, now Prime loans, are foreclosing at alarming rates.
In May, delinquency rate for prime mortgages worth less than $417,000 2.44% vs 1.38% a year earlier.
Prime loans greater than $417,000, or jumbo loans which make up the bulk of loans in the pricier markets: 4.03% vs 1.11%.
Another shread of truth from NAR economist Lawrence Yun: "It's a feedback loop, price declines lead to more defaults, which leads to more price declines."
The Nattering One muses... as we have Nattered ad nauseum, this is not a sub prime crisis, its a risk management problem.
There is NO ESCAPE from the originate to sold paradigm in which loans are not held by the originators,
thus eliminating their need for risk mitigation, these toxic loans were sold downstream to greedy and clueless investors.
Central bank free money and banker investor greed has begat an economic disaster of epic proportion.
Said disaster or trainwreck CANNOT BE STOPPED and WILL NOT END until housing price rent wage ratios come back into equilibrium.
Said price equilibrium can be found around 1999 housing price levels, which should be reached somtime around 2011.
Hattip to CNN Money.
In May, delinquency rate for prime mortgages worth less than $417,000 2.44% vs 1.38% a year earlier.
Prime loans greater than $417,000, or jumbo loans which make up the bulk of loans in the pricier markets: 4.03% vs 1.11%.
Another shread of truth from NAR economist Lawrence Yun: "It's a feedback loop, price declines lead to more defaults, which leads to more price declines."
The Nattering One muses... as we have Nattered ad nauseum, this is not a sub prime crisis, its a risk management problem.
There is NO ESCAPE from the originate to sold paradigm in which loans are not held by the originators,
thus eliminating their need for risk mitigation, these toxic loans were sold downstream to greedy and clueless investors.
Central bank free money and banker investor greed has begat an economic disaster of epic proportion.
Said disaster or trainwreck CANNOT BE STOPPED and WILL NOT END until housing price rent wage ratios come back into equilibrium.
Said price equilibrium can be found around 1999 housing price levels, which should be reached somtime around 2011.
Hattip to CNN Money.
Comments