Subprime Disaster Continues to Worsen

National Real Estate Recession Likely

HousingPredictor.com goes into great detail on their site about the disaster nobody wants to talk about: the subprime real estate implosion. HP explains how the nation’s mortgage melt-down has evolved into an American real estate crisis amid falling home prices, record foreclosures, and weakening consumer confidence – all of which threatens to produce the nation’s worst economic disaster since The Great Depression, according to a Housing Predictor study. Read the disturbing facts summarized below.

• The damage could be so widespread that losses to home owners could reach $600 billion. Wall Street investors, mortgage companies and banks also stand to take a big hit.
• The number of adjustable rate mortgages set to ratchet upward for homeowners in the U.S. through 2009 is now estimated by the office of U.S. Congressman Brad Miller (D – North Carolina) to be at least 5 million, which is widely expected to further damage the nation’s ailing real estate markets.
• The new estimate tops an earlier estimate of 2 million foreclosed mortgages.
• Miller is championing a proposal in the house to give courts authority to alter the terms of mortgages that have been marketed to subprime borrowers.
• For years greedy lenders and investors forged and benefited from a booming housing market that appreciated in most parts of the country at or near double digit figures until the coffers emptied out and Wall Street Bankers shut off the flow of money.
• With the money stream in short supply mortgage lenders tightened lending guidelines, which in turn slowed many real estate markets.
• Real estate markets across the country slowed and now more than half of the nation’s housing markets are at near standstills with abysmal sales figures, according to independent surveys conducted by Housing Predictor. The rate at which prices are falling in some areas is staggering, much faster than when the Savings and Loan Scandal reached its peak in the early 1990s.
• The real estate crisis is beginning to spread into markets which until now have been untouched. This includes second homes, vacation markets and extremely high-end (>$1 million) properties. California, Florida, Michigan and Nevada are the most troubled states, with record high foreclosures and increasing notices of late mortgage payments being recorded. Banking officials concede by the time the fallout is over, few urban markets will remain unaffected.
• A concentration of contributing causes has produced a kind of perfect storm in the real estate market: fraud and misrepresentation by lenders, easy access to mortgages of all kinds, including subprime loans to buyers with poor credit histories, and exotic new variations of conventional mortgages to those with good credit ... all of these have combined to produce the worst financial disaster for lenders since the Great Depression.
• Compounding the problem are increasing estimates of more than 5 million adjustable rate mortgages that are scheduled to be reset before the end of 2009, many held by investors who will be unable to make higher payments. Americas Watchdog, – a web site that has sounded warnings about the coming crisis for nearly three years – estimates the consequences for home flippers alone will be devastating.

Get The Full Scoop

Visit the Housing Predictor web site.

Subprime Disaster Continues to Worsen
(c) Housing Predictor

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Our Take

If you suspect you are one of the millions of consumers who have been taken advantage of or cheated, contact the National Mortgage Complaint Center. In the event you are considering the purchase of a home, the NMCC can help you review your contract so that you are not swept up in this growing crisis.