Subprime Articles

WASHINGTON – Is a blowout taking shape in the impaired-credit mortgage market? Could lax underwriting standards during the housing boom years — no verification of applicants' incomes or assets, low or no down payments, and big mortgages to people already saddled with heavy consumer debts — finally be coming home to roost? The omens are unmistakable. Delinquencies in the $1.3 trillion impaired-credit mortgage market hit 12.6 percent in the latest quarter, up from 11.7 percent. D.... Read More...

While he remains optimistic about the American economy, despite the fall of the dollar, the country's top economist warned this week that the continuing subprime crisis is likely to get worse in the near future. The Federal Reserve this week cut interest rates by half a percent to help homeowners grappling with the subprime fallout. In his first public address since the rate slash, chairman Benjamin Bernanke managed to keep his optimism in check. "The market for subprime mortgages has adjusted s.... Read More...

Many states are now working on their own relief measures to help borrowers hurt by the continuing crisis in the subprime mortgage market. Some are looking at programs that help provide education and financial incentives for borrowers, while others are considering greater scrutiny of lending agencies and vendors. According to Reuters, loan agents in Minnesota and Ohio have a duty to match borrowers with low cost mortgages under recently-passed laws. Oregon and Maine could soon have similar measur.... Read More...

Hoping to stem the tide of the subprime mortgage fallout, the Pew Charitable Trusts announced this week that it will donate $1 million to help educate homeowners and curb abusive lending practices that have helped lead to the current crisis. Over a two-year span, Pew will give the funds to the Center for Responsible Lending to help strengthen underwriting standards, including verifying a borrower's income, and ensure that borrowers have the ability to repay the mortgage after scheduled increases.... Read More...

A Dallas, TX-based wholesaler shut its doors today according to a report over at MortgageDaily.com (sub). First Consolidated Mortgage Co. confirmed today that it was shutting down only a month after they put a halt to any further subprime loan generation. Just another drop in the ocean of the ‘subprime fallout’ that is providing a wealth of media attention (albeit mostly negative) for the mortgage industry and the housing market..... Read More...

At least one national group expects the FHA to become a savior for people struggling with the continuing subprime crisis. The National Association of Mortgage Processors, or NAMP, recently predicted that the FHA and its loans will take over for subprime mortgages. About one in five people who obtained subprime mortgages in the last two years will wind up in foreclosure, according to the Center for Responsible Lending, a nonprofit advocacy group. More than a half-million borrowers have lost their.... Read More...

Washington Mutual Inc., the largest U.S. savings and loan, offered to refinance $2 billion worth of mortgages at lower interest rates to help subprime borrowers meet rising payments on their homes. Homeowners who anticipate higher payments on a Washington Mutual adjustable-rate subprime mortgage can apply for assistance, the Seattle-based thrift said Wednesday in a statement. One of the options is a 30-year, fixed-rate loan that charges half a percentage point of interest less than borrowers wou.... Read More...

I recently decided to start looking for future survivors in the subprime mortgage sector. Stock prices of Accredited Home Lenders (Nasdaq: LEND), New Century (NYSE: NEW), NovaStar (NYSE: NFI), and IndyMac Bancorp (NYSE: NDE) have cratered, absolutely cratered, and nearly every pure-play subprime mortgage lender is priced as if it's going out of business. There's a lot of truth to the negativity surrounding subprime mortgages - many have already gone out of business (or sold themselves), and many.... Read More...