Monday, Feb 09, 2009
The next domino to fall
This Is Mone: Alt-A loans: New fear for middle-class subprime
The doom-mongers reckon America's property market is on the verge of a new crisis as big as the subprime disaster that began in 2007. The fear is that borrowers with better credit histories, who took out Alt-A mortgages, are defaulting on a similar scale.
Rising unemployment in America, where a record 598,000 jobs were lost in January alone, means many borrowers are struggling. Late payments and repossessions are soaring.
Dozens of banks are affected because they bought parcels of Alt-A mortgages that were sold as securities and traded around the world. The picture is bleak.
Posted by little professor @ 01:43 PM (571 views) Add Comment
3 Comments
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1. little professor said...
Moody's reckons total losses from the 2006 Alt-A vintage could peak at 20%, and the 2007 vintage may average 24%. Some have 'performed similarly to subprime'. Historically, Alt-A losses had been just 1%.
2. 51ck-6-51x said...
In a recession (and especially in a depression) the number of defaults increases and the recovery decreases... this is where people start to realise that the sh!t they just saw hitting the fan was only the first of a wheelbarrow full of the stuff.
3. Chburke said...
Ctrl-Alt-Del mortgages next to be reset :-)
I'll get my coat