Friday, March 5, 2010

Another wave of US foreclosures and a large overhang of ‘dark capacity’

America must help its home owners

The author argues that the US government will have to step in over the next couple of years to buy-up almost $1 trillion of mortgages from banks. 25% of US householders' mortgages are under water, the prices for new-build are lower than 7 years ago, and a new crash is expected unless banks take a big haircut on the principal on these loans (i.e. the capital, not just the interest rate, is reduced) - meaning big write-offs for the banks. Carnage for the banks, or carnage for the government.

Posted by notyethomeless @ 12:29 PM (491 views)
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