Upside Down Mortgage

Posts Tagged ‘bubble’

Percentage Of Mortgages Subprime

Question: What percentage of suprime mortages actually defaulted?

Hey you know from the 2007 subprime mortgage crisis alot of those mortage holders defaulted... im just curious approximately what percentage of those loans defaulted? Also, what percentage of dollar value of loans do the defaulted loans constitute? 20%?

Moreover, what percentage of defaults can banks handle without problems? no more than 5%?

Answer: Bank of America bought Merrill Lynch's subprime loans for 22¢ on the dollar. If only 75% of subprime borrowers defaulted , BofA would still make a profit. But it now looks like they will lose money on the deal. So over 78% of Merrill's loans went bad.
For the entire industry it is less than that. Merrill jumped in late and made the worst loans. But i think that 50% of the subprimes went to foreclosure.
Banks did not keep perfect divisions on their loans. So we can only guess when we use the word "subprime". And 20% of all subprime loans were issued to people who actually would have qualified for a prime loan but were steered to a subprime because that loan generated more profits for the lender.
No one knows the answer to your last question but it is over 5%..

Poll: Americans Oppose Sub-Prime Mortgage Bailout

If you're new around here, you might want to subscribe to our Upside-Down Mortgage RSS feed. It's quite likely the only feed of it's type on the internet!

Housing Bubble Book

Question: This too shall BUST?

remember the "dot com" bust, the housing bubble ( that has now popped due to adj-rate mortage and foreclosure)?

Do you think this era of everyone reading books and listening to financial planners telling them to start investing in the stock market will also break and thousands of people will end up worse off than they were before?

Sometimes I feel the only people who are making any money off investing are the ones getting royalties from all the books they make on how we should handle our money!

AS far as I can tell, the only stable way to make wealth is to own property and even that skrews up!!

Answer: There isn't a "financial investing" bubble. These things have always been around. Recently however, due to the internet, it has allowed people who could not invest before begin to invest. The small investor you spek of basically has a very very little impact on the market. The major hedge funds and large institutional investors move the market.

Authors@Google: Lawrence Roberts

Housing Bubble In Toronto

Confusion is ramped in the Toronto real estate market and potential sellers are not getting all of the right information to make sound decisions. Due to the same reasons why home buyers should be buying a Toronto home right now you should be selling your home right now. It is time to expand your net worth and create some permanent wealth.

Toronto home owners are hesitant to sell because they don't think they will get all of their money out of the investment. For a lot of sellers this really shouldn't matter. Psychologically they don't want to lose money. In reality it isn't lost. It will just be transferred to a property or properties that will take advantage of the current market conditions.

Sellers can actually take advantage of the low interest rates, the buyers demand for good product, the lack of good product, and the current possibilities that exist to expand their net worth.

In a lot of cases I think a seller would be surprised at how well they can still do with selling today, even if they were taking the money and running. There has been a lot of media manipulation to have people think we in central core Toronto, are in a really bad market. It just isn't true. The average price for March transactions was $362,052 - down less than five per cent from the same month last year, as reported by TREB.

The media has been manipulating the statistics to strengthen the story that they want to tell. They are using facts from certain areas in Canada that had big housing bubbles and making them look like they represent the whole country with big bold titles. I think that the media is doing this to increase their viewership stats so that they can simply sell more advertising space.

One benefit for someone wanting to list their Toronto home right now is the ability to leverage stagnant properties that have been on the market for a long time because the sellers aren't being realistic with their prices. By pricing your property appropriately you can make you listing look like much better value.

These same unrealistic sellers existed in the busier markets but they just weren't given much attention and they never should have listed the home for the price that they did in the first place. Now the media is using them to support their stories. I could ask $11,000,000 for my personal home but it would not sell for even 10% of that asking price. This doesn't mean that the market has come down 90%, it just means that I was very unreasonable with my initial price offering. These sellers exist in all markets but in better times they don't get paid any attention.

Pricing your Toronto home is certainly the key to selling for top value in this market, there are a lot of agents who have only worked in the hyperactive real estate market that we have seen over the past 10 years. They never learned to price when you don't have 10 offers to choose from. Try to tell a realtor that has 7 or 8 years of experience that they don't know what they are doing and need to go back to the basics. Their egos just won't accept that they need to change the way they work.

These Toronto real estate agents go on with their unfounded prices until the property becomes stigmatized and the evil "Price reduction" is necessary. Price reductions are extremely damaging because you need to make reductions in 10% increments in order to make them effective. Otherwise you just waste more days on market which is the key weapon for low ball offers. If aiming high and lowering the price over time is the strategy you want to use, you will end up selling for less than if you had made the initial price offering as close to reality as possible.

Sellers can take advantage and upgrade their home by selling now and buying something that is more expensive, something that would have been out of reach before. They can also take advantage by diversifying their holdings and buying an income property. Interest rates are at their lowest in decades so now is the time to expand your personal net worth.

Sellers can also take advantage of the surge in buyers and confusion among sellers by just listing. There is a lack of quality inventory on our market. Good homes are selling well, it doesn't have to be completely updated but buyers are more likely to buy something that is mostly finished than something that needs to be leveled.

I don't have a crystal ball but this is the situation as I see it right now.

About the Author:

Evan Sage is an award winning
Toronto real estate agent
. Evan instills in his clients the confidence to make the right purchase or sale decision. He achieves this by demonstrating a superior knowledge of
Toronto real estate
and by providing a wealth of free resources on his website evansage.com to educate buyers and sellers in Toronto.

Source - You Should Sell Your Home Right Now!

Real Estate Bubble Toronto Homes