Upside Down Mortgage

Subprime Mortgage Lenders

Question: Where are all the houses which people default on their subprime loans?

With all those subprime lenders filing for bankruptcy, it seems that there should be many houses which people couldn't pay their mortgage.
It would only make sense that these houses would be on the foreclosures market, am I missing something?

Answer: They are spread out nationwide and are such a low percentage of the total that they are just a few in each area as opposed to many of them everywhere you look. Foreclosures are not just occuring in subprime. In last months issue of mortgage servicing news the biggest growth area in defaults was in jumbo loans. No subprime borrower can qualify for one of those. Subprime borrowers make for easy targets as they are credit challenged people that have life issues affecting them daily. The real risk category is the high credit score crowd that can buy anything on stated no doc loans and when a life issue hits them they are hit hard. The several year tally of subprime loans gone bad has caused many subprime lenders to lose their rating and the lenders are the ones going bankrupt. The loans will move to a new servicing company and payments will still have to be made. Regarding pre foreclosures of any type there are still growing numbers across the board and finding a deal isnt hard. Finding a home with equity remaining is just becomming a bit more difficult.

Inflation, deflation, subprime mortgage crisis, & banks

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