Article

2008-04-16 Home Front Economy

Foreclosures up 57 percent, not done yet

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Posted by Fred 2008-04-16 00:00|| || Front Page|| [11131 views ] Top

#1 with a 100% loan secured against the property investment, if the property price is not in profit then just walk away and it's the loan originators problem!

Banks were really really stupid. So was Greenspan.

Posted by Bright Pebbles 2008-04-16 06:36|| 2008-04-16 06:36|| Front Page Top

#2 http://www.slate.com/id/2188982/

Posted by Bright Pebbles 2008-04-16 06:55|| 2008-04-16 06:55|| Front Page Top

#3 House next door to me just sold in less than two weeks - I don't know the sale price, but it was quite a handsome list price. At least fo rnow, and in my immediate neighborhood the real estate market seems to have bottomed.

Posted by Menhadden Snogum6713 2008-04-16 07:58|| 2008-04-16 07:58|| Front Page Top

#4 Businessweek has an article in the latest issue about this. Apparently the banks were required by the government to make such loans in service to the concept of non-discrimination... with predictable results, unfortunately.

Posted by trailing wife ">trailing wife 2008-04-16 08:10|| 2008-04-16 08:10|| Front Page Top

#5 Just remember, every single person involved in approving these loans has a college education.
Institutional stupidity on display.

Posted by wxjames 2008-04-16 09:42|| 2008-04-16 09:42|| Front Page Top

#6 Dog bites man alert!

80 million homeowners.
55 million homeowners have a mortgage.
51 million mortgage holders not at risk of foreclosure.

Posted by DepotGuy 2008-04-16 10:42|| 2008-04-16 10:42|| Front Page Top

#7 100% of banks at risk of Bankruptcy though.

Posted by Bright Pebbles 2008-04-16 11:54|| 2008-04-16 11:54|| Front Page Top

#8 #7: 100% of banks at risk of Bankruptcy though.

Not really, BP. Most of the people at risk are mortgage loan companies that sell mortages to "individuals" (I.E., investment companies, retirement funds, etc.). Banks are "insured" against huge losses. Some other people that are going to suffer big-time are credit card companies and other unsecured loan organizations. The losses will be in the billions, but compared to the daily activities of most of these companies, won't be enough to drive them into bankruptcy. Profits will go down, and some banks and lending companies MAY show a net loss, but overall, the US economy will continue to tick. A lot of "investors" may lose their shirts, but the average financial business will continue to operate.

Posted by Old Patriot">Old Patriot 2008-04-16 15:35|| http://oldpatriot.blogspot.com/]">[http://oldpatriot.blogspot.com/] 2008-04-16 15:35|| Front Page Top

#9 Oldpatriot,
I respectfully disagree with your assessment, but would be happy to be wrong. See the chart at this link: http://calculatedrisk.blogspot.com/2007/10/imf-mortgage-reset-chart.html

The mortgage-related problems will be in the hundreds of billions. But, the scary thing is that these mortgage securitization activities were only a small window into the types of deals large banks are doing all the time with asset classes of all types. http://www.leap2020.eu/photo/520054-635448.jpg

Concealing and mitigating the derivative problem (notional value in excess of $100 trillion) is the biggest challenge the Fed is facing. The rushed sell off of Bear Stearns is only one of the clues as to how big of a problem we face. The reason the Fed brokered the sale to JPM is because BSC was a counter-party to many of JPM's derivatives trades.

It's time to stop laughing at the gold bugs and buy Kruggerands.

Posted by mjhlaw">mjhlaw 2008-04-16 16:01|| 2008-04-16 16:01|| Front Page Top

#10 OP,
Your comment that
> Banks are "insured" against huge losses
is true, but the insurers cannot pay out in the event of a systematoc default. i.e. they are bankrupt too.

Posted by Bright Pebbles 2008-04-16 17:29|| 2008-04-16 17:29|| Front Page Top

#11 It's time to stop laughing at the gold bugs and buy Kruggerands.

Wrong. Buy American Eagles or British sovereigns. Screw supporting the black racists in South Africa.

Posted by Thaimble Scourge of the Pixies4707 2008-04-16 17:53|| 2008-04-16 17:53|| Front Page Top

#12 Yeah!
Support our own Black Racists in AmeriKKKa!

Posted by bigjim-ky 2008-04-16 22:31|| 2008-04-16 22:31|| Front Page Top

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