Upside Down Mortgage

Posts Tagged ‘economics’

Subprime Housing Crisis

Question: what is mean by subprime loan write-off?

I read about a subprime crisis in US and resulted write-off by major home loan lenders. Does it mean customer needs not to pay the home loan taken by them and own the house without paying the rest of installment?

Answer: No! It means the banks are assuming they won't get paid in full - they are 'writing off' the investment as a total or partial loss.

U.S. Sub-Prime Mortgage Crisis

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Mortgage Default Canada

Question: What access to CDN assets does a US mortgage company have when a Canadian citizen defaults on a US mortgage?

We own a property in Florida that unfortunately does not make financial sense to try to keep. We will likely walk away from the house and default on the mortgage. What access will the mortgage company have to my assets here in Canada, and what are the possible repercussions?
Thanks very much.

Answer: I would ask an attorney this question. Typically, most states have laws that require a mortgage company to only one solution for the mortgage. If they opt to foreclose on the home, then any other option may not be viable. For example, here in California that is what happens. A home can either be foreclosed on as the only remedy or the mortgage company can release the lien on the home and go after the owners other assets, but not both options together.

Again, contact an attorney about this. I would not give advise on this and certainly would not accept any with the person holding a valid law degree, specifically in real estate and foreclosure laws and preferably in both American and Canadian Law.

Good luck

Chris Newell's 'Your First Home' Liz Sanchez Clip 2

Mortgage Default Modelling

In a sweeping change of opinion, more than 1 out of 3 homeowners say that if housing prices continue to slide they'll walk away from their mortgages, according to a new Housing Predictor survey. The poll demonstrates major changes in the way Americans feel about the U.S. banking system and their own financial well being.

Americans have historically felt responsible to fulfill financial commitments made to banks and mortgage lenders. Business models tracking foreclosures have figured that defaults would be limited to less than 6% of all home mortgages. The foreclosure epidemic has grown to become the nation's worst financial disaster coupled with the credit crunch since the Great Depression damaging the entire economy.

Respondents to the survey are demonstrating they are fed-up with the way the economic downturn is affecting their lives. Some 36% surveyed said they would walk away from their homes if housing prices fall for a number of years.

The credit crisis on Wall Street quickly spread to Main Street as more than 4-million homeowners from every corner of the economy had homes foreclosed.

Wall Street traders developed a series of new financial instruments to trade mortgage backed securities to fill a record supply of home mortgages, many of which were to subprime borrowers at first and then to conventional mortgage borrowers.

A year after the crisis began a new national record high number of homeowners had shrunk to a record low.

Growing unemployment and worsening consumer confidence have led to an increasing number of foreclosures, despite efforts by the new Obama Administration in Washington and Congress to slow the epidemic of foreclosures.

Housing Predictor forecasts more than 250 housing markets and surveys visitors on real estate related topics. Check your market forecast, real estate news and get the latest on the foreclosure epidemic at http://www.housingpredictor.com

About the Author:

Mike Colpitts is the Editor of Housing Predictor, which provides housing market forecasts in all 50 U.S. states. Check on your market at http://www.HousingPredictor.com

Source - Survey Shows Homeowners Will Dump Mortgages

Developing New Models for Forecasting Mortgages in Mathematica