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Realistbear

Massive Mortgage Bank Stock Drops From $50 To $3

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Lots of trouble in our mirror market--Southern CA. The anatomy of a HPC and why we are following CA down the same exact path only 6 months or so behind them. You will be reading the same kind of article in our newspapers very soon:

http://www.signonsandiego.com/news/busines...11mortgage.html

Rules could tighten for other borrowers
By Mike Freeman
UNION-TRIBUNE STAFF WRITER
March 11, 2007
In just a few short months, mortgage lenders who specialize in loans to borrowers with tarnished credit records have been in turmoil.
Default rates among borrowers have surged. Share prices of many mortgage companies have plunged. A handful are in bankruptcy. Several others are working to exit the business. One of the largest, New Century of Irvine, said last week that creditors had forced it to stop making loans. The company's stock, which traded for about
$50 a share in the middle of last year, closed Friday at $3.22.
The
staggering speed
of the fall has industry observers watching closely to see whether the problems in subprime lending will spread to borrowers with stronger credit......./
Stifel Nicolaus analyst Chris Brendler wrote in a research report last week that he expects the “disconcerting trends in the subprime sector to increasingly spread to the Alt A and, to a lesser extent, the prime market.”
If that happens, it could prolong the downturn in the housing market as lenders tighten underwriting standards – resulting in more home buyers, particularly first time buyers, failing to qualify for mortgages.
It also could pose a problem for borrowers with hybrid loans looking to refinance. Hybrid mortgages carry low interest rates early on but later become adjustable rate mortgages. When that happens, the payment for borrowers can rise by several hundred dollars a month.
With median home prices declining over the past year, borrowers may have little or no equity in their homes. So tougher underwriting standards could make it hard for them to find a new loan.

Exciting stuff. :)

Edited by Realistbear

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Lots of trouble in our mirror market--Southern CA. The anatomy of a HPC and why we are following CA down the same exact path only 6 months or so behind them. You will be reading the same kind of article in our newspapers very soon:

http://www.signonsandiego.com/news/busines...11mortgage.html

Rules could tighten for other borrowers
By Mike Freeman
UNION-TRIBUNE STAFF WRITER
March 11, 2007
In just a few short months, mortgage lenders who specialize in loans to borrowers with tarnished credit records have been in turmoil.
Default rates among borrowers have surged. Share prices of many mortgage companies have plunged. A handful are in bankruptcy. Several others are working to exit the business. One of the largest, New Century of Irvine, said last week that creditors had forced it to stop making loans. The company's stock, which traded for about
$50 a share in the middle of last year, closed Friday at $3.22.
The
staggering speed
of the fall has industry observers watching closely to see whether the problems in subprime lending will spread to borrowers with stronger credit......./
Stifel Nicolaus analyst Chris Brendler wrote in a research report last week that he expects the “disconcerting trends in the subprime sector to increasingly spread to the Alt A and, to a lesser extent, the prime market.”
If that happens, it could prolong the downturn in the housing market as lenders tighten underwriting standards – resulting in more home buyers, particularly first time buyers, failing to qualify for mortgages.
It also could pose a problem for borrowers with hybrid loans looking to refinance. Hybrid mortgages carry low interest rates early on but later become adjustable rate mortgages. When that happens, the payment for borrowers can rise by several hundred dollars a month.
With median home prices declining over the past year, borrowers may have little or no equity in their homes. So tougher underwriting standards could make it hard for them to find a new loan.
THE STOCKMARKET NEVER LIES!!!!!!
THOSE WHO DO WRONG GET FOUND OUT AND PUNISHED!!!!
it's just the analysts that feck it up,and sucker people into believing a myth.

Exciting stuff. :)

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This might sound a bit dumb..... but do we (in the UK) have "subprime lenders"? Who are they, if they're there?

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This might sound a bit dumb..... but do we (in the UK) have "subprime lenders"? Who are they, if they're there?

All the UK mortgage lenders are now in the sub-prime market. Barclays alone stand to lose 1B just from the collapse of new century in the US. The mortgage market is now global.

Sit tight and watch the wireworks start.

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This might sound a bit dumb..... but do we (in the UK) have "subprime lenders"? Who are they, if they're there?
The UK is worst for sub-prime although the media does not report it.

How many people do you know that has bought a house and self certified themselves on the mortgage applications?

How many people do you know that has put down less than 10% deposits?

How many people do you know have i/o floating rate mortgages?

These are all sub-prime mortgages.

I don't know anyone in the UK who bought a mortgage in the last 4 years who does NOT fall into the above categories.

:unsure:

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All the IO, 3 X and above, SI mortgages are "sub-prime." It could well be the majority of all loans taken out in the past 2 or 3 years. This market has been running on empty for a long time--much longer than the US market was able to sustain.

There is a crisis looming--a big crisis. :o

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All the UK mortgage lenders are now in the sub-prime market. Barclays alone stand to lose 1B just from the collapse of new century in the US. The mortgage market is now global.

Sit tight and watch the wireworks start.

What Fireworks? HSBC was a widely publicised case of a UK bank loosing money due to US debt defaults, yet the stock price rose 1.1 per cent, making it one of only six gainers in the FTSE 100 during the fall two weeks ago.

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What Fireworks? HSBC was a widely publicised case of a UK bank loosing money due to US debt defaults, yet the stock price rose 1.1 per cent, making it one of only six gainers in the FTSE 100 during the fall two weeks ago.

I somehow think some time soon we'll return to normality in the sense that bad news for a company will also

mean the shares drop. It's a little weired what is going on from time to time. E.g. gold going down after the

Shanghai incident, where it should have gone up. Well, it's all explainable, but what I think is that once the

HPC here is in full swing and the US in a proper recession, we will again be able to make sense of market

movements.

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Vanquis for one, & check out this:

http://www.myprovident.co.uk/

yes, that does say 177% apr :o

OK, not actually a mortgage broker, but they are definately a sub prime lender.

http://www.logbookloans.co.uk/what-does-it-cost.html

Yes you did read right 336.6%

So mew to buy your flashy merc then get a loan based on the value of the car to help you keep up with the credit card repayments. The world of Sub Prime lending really is criminal.

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I/O and higher lending multiples do NOT constitute sub-prime lending so please stop bullschitting people RB. "Sub-prime" is when the borrower ALREADY has defaults, CCJs or a history of mortgage arrears on their record. You're no better than the VIs you detest . . .

I know plenty of people who've gotten 4+ times their income to buy and they really do manage perfectly well. No one's denying there has been a lot of self certification going on but that doesn't mean the UK's gonna have the same problem as the US even though our loans are bigger and our rates higher. Rates aren't gonna go that much higher so how do you reckon on 2nd quarter 2007 ?

Edited by tenroom

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I/O and higher lending multiples do NOT constitute sub-prime lending so please stop bullschitting people RB. "Sub-prime" is when the borrower ALREADY has defaults, CCJs or a history of mortgage arrears on their record. You're no better than the VIs you detest . . .

I know plenty of people who've gotten 4+ times their income to buy and they really do manage perfectly well. No one's denying there has been a lot of self certification going on but that doesn't mean the UK's gonna have the same problem as the US even though our loans are bigger and our rates higher. Rates aren't gonna go that much higher so how do you reckon on 2nd quarter 2007 ?

Sounds like you're really scared to me, Tenroom; I wonder why? Is the truth too much to bear?

Edited by eric pebble

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Sounds like you're really scared to me, Tenroom; I wonder why? Is the truth too much to bear?

Oh puh-lease. I bought 10 years ago, at rock bottom, mate. All I'm scared of is how I'm going to resist buying the Aston V8 when my sale goes thru . . . :lol:

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I/O and higher lending multiples do NOT constitute sub-prime lending so please stop bullschitting people RB. "Sub-prime" is when the borrower ALREADY has defaults, CCJs or a history of mortgage arrears on their record. You're no better than the VIs you detest . . .

I know plenty of people who've gotten 4+ times their income to buy and they really do manage perfectly well. No one's denying there has been a lot of self certification going on but that doesn't mean the UK's gonna have the same problem as the US even though our loans are bigger and our rates higher. Rates aren't gonna go that much higher so how do you reckon on 2nd quarter 2007 ?

"Sub-prime" has nothing to do with repossession actions or the consequences of default. They are loans that are made on the sub-prime market due to the borrower's less than stellar credit rating or if the amount of the loan exceeds normal guidelines (2.5 times income). The subprime lenders all raise money on the bond market selling low rated bonds ranked well below BBB at high rates of interest. They are risky and pay higher rates of interest which is passed onto the borrower.

The subprime market is collapsing under the weight of defaults. As it turns out, many who took out 3 X salary (IO and SI etc.) and above have discovered they cannot repay their mortgages. For years 2.5 X income has been considered prudent. We are into 7X territory and perhaps more in the SI world where lie to buy can give you any multiple you ask for.

Our market is going to go down just like the US for identical reasons. People cannot repay their mortgages and credit is tightening cutting off the MEW lifelines. With everything else going up, council tax, fuel, food etc. and wages stagnant it does not take much to push the average stretched buyer over the edge. Repossessions were only up 62% last year and we will not see much action until the 2nd Q, IMO, where the number of defaults will start to accelerate due to tightening credit in the sub-prime market.

It is all a bit obvious IMO. The average house costs $227k in the US and they earn slightly more and pay less taxes than we do. With our average house moving toward $400k with lower wages and higher taxes something IS going to give. If the US is collapsing we are going to go down twice as hard. Its all in the maths.

IMO, a good solid HPC will do this country the world of good. This miracle economy of Gordon's has been a bloody nightmare.

Edited by Realistbear

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Guest d23
"Sub-prime" has nothing to do with repossession actions or the consequences of default. They are loans that are made on the sub-prime market due to the borrower's less than stellar credit rating or if the amount of the loan exceeds normal guidelines (2.5 times income).

never ever heard of that being used when defining the sub prime market

regardless of whether it's your opinion that anything above 2.5 is risky it's not automatically classed as subprime, the portion of the market thats causing the US so many problems and no doubt will cause us some in the future too (altho it counts for twice as big a slice of the US mortgage market as here in the UK)

Repossessions were only up 62% last year and we will not see much action until the 2nd Q, IMO, where the number of defaults will start to accelerate due to tightening credit in the sub-prime market.

not sure I follow you RB; I can understand that credit tightening would result in less people being able to get mortgages driving down demand but don't see how this would accelerate the rate of defaults.

Other factors would, like for instance interest rate hikes ;)

Repo's were up a lot last year, the % of people in arrears with their mortgages was the same as 05 however (actually slightly down and a fair bit less than in 99, 00, 01 and 02)

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  • 315 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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