Mortgage Crisis Spreads Past Subprime Loans

New York Times:

The credit crisis is no longer just a subprime mortgage problem.

As home prices fall and banks tighten lending standards, people with good, or prime, credit histories are falling behind on their payments for home loans, auto loans and credit cards at a quickening pace, according to industry data and economists.

The rise in prime delinquencies, while less severe than the one in the subprime market, nonetheless poses a threat to the battered housing market and weakening economy, which some specialists say is in a recession or headed for one.

Read the whole story: New York Times

Comments

[loki]

Hey check it out. The top lenders are going to be great fellers and offer another loan to people who are in trouble now. Isnt that nice of them.
They get to charge the borrow outrageous fees and points to postpone what could be the inevitable for many. But out of the goodness of their big hearts, they are going to charge you 4 or more thousand in points and fees. Oh those wonderful lenders.
They must be loving this. Getting to rescrew the people they've already screwed. And able to spin it as doing it out of the goodness of their hearts. Even our Gov is backing them in their attempts to get blood from a turnip.

reminds me of those pay day loan companies who fought regulations tooth and nail, but now say they are doing all the wonderful things out of the goodness of their hearts, when they are really mandated by the law.

Thats ok. Americans are dumb enough to fall for it in the past, again now, and Im sure they will again in the near future.

[Justinpassing]

Never fear folks, Saint Buffett is on his way to save the day.....just as soon as they can devine the true value, or the true debt, or the true counter-party, or the applicable covenants, or the derivatives statutes, or the senior claimant, or the deferred counter-claimant, or the applicable mezanene, or the applicable tranche.

[letsgetsmart]

It all comes back to the strong recovery that we had under Clinton. Income drives everything. When everyone can afford a home, homes will be built. When incomes are rising, people want more expensive autos. More shiny rocks are bought at x-mas. Why we switched to republicans in congress and the big house is something that I will puzzle forever. What, things were going to good for everyone? When you turn government over to the greedy, this is what you get. Jobs over seas, corporate profits (see wall street) through the roof. Middle class cost of living going up. Hey, if you think that the money you invest in wall street is going to yield you anything, I see that you bought the line and are still acting the same way you did when you voted the republicans in. When the republicans came out with the idea of private investment accounts, I knew what was coming. Just the shear nerve it takes to campaign this idea shows what little respect the republicans have for the public. Does anyone notice the huge commissions the rich are getting for handling your investments in wall street? Is it going to take another enron type scandal to get folks to admit that wall street is not safe or that you can't trust them. They are called sheep shearers and you are the sheep. How many of you can argue this?

[mrcontinental]

Didn't we call this MONTHS ago right here on HuffPo guys and gals? Why are our "geniuses" always behind us common folks on these pressing issues?

[mmckinl]

They believe the MSM ...

Hell, Greenspan, Head of the Fed was cheerleading this whole boondoggle.

I was in real estate until I started selling 3 years ago. I didn't get top prices but I am safely out ... I knew when I got a flier that offered a million bucks at $2500 a month this would end badly.

[mmckinl]

People believe the MSM ...And the MSM believes in whatever they are told to believe in by the Oligarchy.

[WIpatriot]

Long ago, in a far, far away land, the MSM was the fourth estate. Today, they are a mouthpiece for the evil cabal.

[mmckinl]

People with good credit are starting to walk away from homes worth $300,000 that have $400,000 mortgages.

Many are buying cheaper homes while their credit is still good knowing that after they walk away there will be 7-10 years of bad credit on their records.It is called jingle mail, keys sent back to the borrowers.

If this becomes the norm there will be another cascade down in home prices and a new avalanche of bad paper at the banks.

[mmckinl]

should be : "keys sent back BY the borrowers"

[MilwaukeeDan]

mm, I never understood the "Great Housing Boom". As far as I can see, this was all a big scam for the builders,banks,real estate agencies,g­overnment, ect to get rich quick. The prices were going through the roof but wages were staggnant, you borrow more, banks make more, ect. Lots of credit to make the economy look good with lots of turnover but no substance. Now, the chickens have come home to roost. I also never understood people saying, "my home's value went up 10% last year", so what, everybody elses in you area went up, too. It's not like your going to sell your garage in Beverly Hills for $500,000 and buy a mansion in Buttlick, Alabama.

[SubparDude]

:
We ain't seen nuttin' yet. Here in San Diego, foreclosures are spreading through the Rich Neighborhoods like wildfire.

Watch Out, folks!
:

[mmckinl]

Same problem where ever million dollar homes were sold. Buyers stand to lose hundreds of thousands.

There could be a lot of jingle mail from those neighborhoods. Many of those were counting on the equity in their homes to retire. That's over now.

With the new guidelines the number of potential buyers in the million $ market have shrunk by over half.

[MilwaukeeDan]

I watched the video part of this story and I have a few questions. Why does this lady need 2200 square feet? How in the hell was she allowed to purchase a $375,000 home with only several thousand down? How did this house lose $50,000 in value. I'm sorry to say this, but most Americans are stupid with money. This lady need to walk away and get an apartment.

[FightingTheRight]

"How did this house lose $50,000 in value."

Homes aren't selling, that causes values to drop.

[mmckinl]

When it is said and done it will be a lot more than $50,000, more like $125,000.

The economists I trust in this area, Baker, Krugman and others say in areas like Las Vegas prices will fall by 40%.

I expect Vegas to get hit pretty hard as business at the casinos slows appreciably.

[FightingTheRight]

I've already lost over $50,000 in value.

[WIpatriot]

It's spreading like a virus! Cough, cough.