Delinquency rates on prime mortgages surpass subprime loans

[Bluebear]

For those smugly blaming the economy's problems on people who "didn't play by the rules" or "bouthgt more house than they could afford" or "took out an exotic loan"....


=====

Before Robin Bohnen and her husband bought a ...house in an upscale Southern California suburb two years ago, they were not cash-strapped, debt-ridden or credit-impaired.

Now they are all of the above. Soon they also may qualify for one more distressing category: home lost to foreclosure.

"Wake me up. Can this really be happening?" the 42-year-old Bohnen says.

As she tries to describe how it feels to have the nation's financial crisis land in her living room, the phone rings. She ignores it. "It's probably the bank — again," she says....

The recession has made it tougher for people to pay their mortgages, and crashing home prices have left many borrowers underwater, unable to sell or refinance their way out of trouble.

One of every five mortgage holders now has a home worth less than the mortgage on it, according to First American CoreLogic, a firm that tracks mortgages and provided data for The Post's analysis...

The foreclosure crisis hasn't played itself out. The next wave looms in the form of a new batch of adjustable-rate mortgages scheduled to reset over the next two years. Unless the market comes back with a roar, which is unlikely, more borrowers will struggle to hang on to their homes.



http://seattletimes.nwsource.com/html/realestate/2008664752_prime25.html

[sam sarrha]

1. why would a cash strapped city devalue my house $20,000/20% so i cant refinance or qualify for help?

we will now Foreclose by june

[Bluebear]

2. I don't know, sam, we are in a terrible mess. nt

[RB TexLa]

3. Having good credit doesn't prevent one from "buying more house then they could afford" or "not

playing by the rules"

[Bluebear]

5. Yes, RB, it's all the greedy consumer's fault. The banks and ad companies are blameless.

Keep telling yourself that.

[RB TexLa]

6. I didn't say that.

[Bluebear]

9. Here, go learn something, really:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5106083#5106223

Millions of homeowners are in trouble. Enough wagging your finger and telling people they "didn't play by the rules".

[RB TexLa]

11. What wagging, I just pointed out that people who qualified for prime loans are capable of

both buying more than they can afford as well as breaking rules.

No wagging.

[Bluebear]

12. OK, then what is the point? Did you read the article? Or just being contrary?

The article cited analyzes how even the government was part of the frenzy of people buying homes whose prices were inflated. Please don't blame the borrower in this thread, there are plenty in which you can do so.

[flvegan]

4. 4 months before the reset, call the lender's retention department.

Ask them to "reset" the rate to what you're already paying. Better to have a good performing loan via a modification, as opposed to a default and lost money.

Any lender that refuses a modification and defaults a loan should be on trial.

[marmar]

7. Roma esta en fuego......

It was an unsustainable party, but it was fun while it lasted, right?

:hurts: :scared: :nuke:

[Bluebear]

10. Vero.

[BlooInBloo]

8. So much for "it's black folks' fault", eh?

:rofl:

[Sen. Walter Sobchak]

14. back when I worked on bankruptcies

And when the bankruptcy was not related to a medical disaster or divorce the typical case was usually a young white couple of an upper-middle class upbringing in their early 30's who started spending like fucking crazy while they were in college and never stopped. This being in Orange County it is reasonable to extend that many of these would have been republicans.

I mention this only because the "subprime-queen" is the new Republican boogyman for the 21st Century.

Total financial illiteracy combined with an incomparable entitlement complex among all segments of American society is what created the crisis, one can’t single out any one group.

[Lost in CT]

27. I have worked with the same folks

The one thing they all seemed to have in common was ridiculously overpriced car leases and vacations.

[Control-Z]

15. Gawd, that's awful.

I hadn't heard that. Where do you live that anyone would think or say such a thing? Disgusting and stupid.

[BlooInBloo]

17. America...

This has been another episode of Simple Answers To Simple Questions.

http://www.youtube.com/watch?v=q9O1hpeO-qQ

http://www.burningcane.org/2008/10/why-are-poor-blacks-being-blamed-for.html

EDIT: Added linkies.

[Control-Z]

21. I hadn't heard that

on any of the news programs I watch. Sad.

[BlooInBloo]

22. "Where do you live that anyone would think or say such a thing?"

HAHAAHAAHAHAHAAHHAAA!!!

I'm sorry - that's just classic.

[Control-Z]

23. Pardon me for not being

near as bright as you. :sarcasm:

In So Cal, Mexican immigrants take the blame for everything. Living here, and being inundated with that kind of BS every gawd damn day, on the radio, and in the news, can get in the way of knowing who the rest of the country is blaming.

So sue me.

[EFerrari]

18. Callers to CSPAN were spitting-into-the-phone furious

back during the first bailout that black people had caused this terrible problem.

It was much like the last time they called in the same way over all that voter fraud that ACORN never committed.

ETA: I'm just coincidentally listening to Dave Camp, (R, MI) who managed to work in ACORN into the Republic's weekly address. He was complaining that they got something in the stimulus package, which is a dog whistle for "black people are getting your money". It's probably not even true. Asshole.

[Control-Z]

20. I've heard the Acorn rumor is not true.

True or not, I just don't understand that kind of hatred. I'm a bit sheltered in So California. Even in my conservative county. I have never heard anyone speak that way. Not ever. I always forget how different our state is compared to many.

[EFerrari]

29. The ACORN rumors are absolutely false. The Republicans, though,

stole a bunch of black votes in Florida and in Ohio in 2000 and in 2004. Rove tried to make an industry of disenfranchising black voters and the cover he used was "voter fraud". They'd accuse ACORN of fraud so they could go in and invalidate thousands of good registrations. Pretty neat trick.

As far as SoCal, I lived in Santa Monica and there were plenty of racists there. They were just quieter than the CSPAN callers. One of my neighbors stopped talking to me when she heard me speaking good Spanish to my gardener. Our neighborhood was about as white as could be and the Latinos that owned the bakery a few blocks away always went very quiet when a white person walked into their store -- which wasn't very often.

Once my family was made to feel very unwelcome in a restaurant in Glendale? Maybe Glendale although, it could have been a different town. We were on vacation and stopped to get lunch. My mom said it was because my little brother was crying but it was because Mom and my grandmother are obviously Latinas and the restaurant didn't welcome colored people. We left without finishing our meal.

There are racists everywhere, imho.

[Control-Z]

31. That was the point I was making.

In So Cal, Mexican immigrants take the blame for everything. I don't hear anything about other groups being the cause of our failed economy. I was surprised when someone up thread said that AA's were being targeted, when it had seemed to me that it was the Hispanic population. I guess I didn't make myself clear.

[hay rick]

13. Delinquency rates on prime mortgages surpass = false.

link here: http://files.ots.treas.gov/482028.pdf

delinquency rate for the first three quarters of 2008 from the report:
Q1
prime: 1.11% subprime: 10.75%
Q2
prime: 1.30% subprime: 11.60%
Q3
prime: 1.67% subprime: 13.51%

The rate of increase in delinquencies is faster for primes, but the overall rate of delinquency for sub-primes remains much greater.

The article title was misleading. The essential point remains, though. The problems in the real estate market may have originated with the subprime mortgages, but they have long since spread to the entire housing market. When your neighbor's house is on fire it's time to grab a hose, not to go looking for a culprit.

[paulsby]

16. you made a common reading comprehension error

you claim in the title of your thread that "Delinquency rates on prime mortgages surpass subprime loans"

the article doesn't say that (it MAY be true, but it's not supported by your article).

the article says that prime mortgage delinquencies now outnumber subprime loan delinquencies

but your claim would only be necessarily true based on the above statement if you knew the relative #'s/%'s of each type of loan

here's an explanation with #'s

assume in the US there are 100 prime mortgages and 50 subprime mortgages (iow, the former are twice as common as the latter).

if there were 10 delinquencies in prime mortgages and 8 delinquencies in subprime mortgages, you could say that there are more delinquencies in prime mortgages than subprime mortgages (which is what the article said).

but it would NOT therefore follow that the delinquency RATES on prime mortgages surpass subprime ones.

because (10/100) < (8/50)

[Telly Savalas]

25. Reading comprehension error, eh?

Read the title of the actual Seattle Times article:

"Delinquency rates on prime mortgages surpass subprime loans"

It does say that.

Granted the lazy journalists at that paper made the logical error you describe, but the OP was simply following the common convention of naming a thread after the title of a cited article. No need to crawl up his/her ass with accusations of poor reading skills.

[Bluebear]

30. Thank you, Kojak.

Who loves ya? :)

[paulsby]

32. my bad

it was the nimrods at the seattle times.

newspapers tend to do awfully with stories involving math, economics, and science.

as a seattle area resident, i can say the seattle times is one of them.

[BlooInBloo]

19. The demon is making its way up the riskiness ladder.

[SoCalDem]

24. There's a special place in hell for all the "bankers" who pushed re-fi's & equity loans

We have "owned" homes since 1977, and the FIRST time I ever even HEARD of anyone getting an equity loan or refinancing their house was a few years ago..

The last house we bought (this one) was in 1982, and we had to bring the 3 most recent income tax forms, paycheck stubs going back 6 months. 6 months worth of bank statements, provide several references from people who had known us for at least 5 years, and prove that the $14K we were putting down was not borrowed.

The transaction from meeting at the bank, to the closing was about 45 days, and there were more than a few phone calls from them, asking about this or that..

This was for a house we were buying for $82K...

How ANYONE could think that handing over a $400K mortgage and multiple re-fis to people who could barely afford rent on a 2 br apartment, is way beyond me.

I will be glad to see things return to sanity, and I feel badly for people who will lose out, but things could not continue the way they are now..

[Lost in CT]

26. Having a home worth less than the mortgage has nothing to do with foreclosure.

Why is this nugget of financial illiteracy continuously repeated?

[InkAddict]

28. What the H don't people understand about being jobless

or underemployed and without healthcare. What does one not understand about the cost of the education and experience it takes to jump into this economy, even if one does "pay their dues." What does one not understand how the cost of quality healthcare (an oxymoran) prevents financial comebacks even if one is cured, let alone the less than compassionate way we care for those that can no longer or never would be "productive".

There are more than 5 million unemployed - add to that the underemployed. Many of them are "saddled" with inflated education loans; many are burdened with caregiving. Adequately educating one's child and caring for the young and/or old/disabled are potent guilttrippers to overextend financially, i.e., what would you leverage??? And they didn't get that way by necessarily being spendthrifts or by all being fired for cause.

There are McMansions, suburban, inner city homes all, and rural homes all sitting idol, prime or not, because TPTB shipped vast industry and service jobs out of this country combined with corporate policies of greed and governmental policies that stripped even the most financially flexible from their homes. Some folks have been doing what they could for the most part for so long. Ultimately, TPTB wanted this, and now they've got it. LIHOP/MIHOP'd the whole economy. The consequences are not pretty - trust and confidence have been seriously disrupted and will be the hardest to "earn" back.

I will not believe that there were those in high places that did not know how shipping the jobs away while pouring $$ into "freedom fighting, grinching at usury, and/or just simply and finally, being fiscally and irresponsibly, greedy and corrupt in every way would play out.