| Bank executive explains mortgage fallout
REEDSBURG-In the last several months, financial news services have been reporting on the demise of many mortgage lenders that specialized in the "Subprime" mortgage market. As of March 25, no less than 43 of these lenders have gone out of business, leaving their creditors and investors holding millions of dollars of debt and/or securities that may very well end up worthless. Much of the real estate speculative frenzy of the last few years was driven by loans provided by these lenders. Offering "exotic" loan financing, such as the Option ARM, interest only, 40 and 50 year mortgages and a host of other non-traditional loans has become a "fool's paradise," as many borrowers are now learning. The result? It is anticipated that 20 percent of all Subprime mortgages originated in 2005 and 2006 will end up in foreclosure.One of the contributing factors to this implosion has been the unbridled zest for fees and profits by lenders who have little interest in educating the borrower in a way that helps the borrower focus on a loan that they can afford, and ultimately pay back, without experiencing excessive pressure on their household budget.
Ad Authority Announces Free Marketing Initiative
SAN DIEGO, April 4 /PRNewswire/ -- In response to the recent implosion of the subprime mortgage market, Ad Authority has launched a free marketing initiative designed to assist both consumers and lenders through this period of uncertainty. For the rest of April, Ad Authority is offering qualifying subprime lenders the opportunity to receive leads at no cost as a means of keeping their pipelines full, as well as assisting consumers that are currently falling through the cracks of the system while financial companies are focused on ensuring their own survival. "Right now the mortgage industry is in a state of shock and the consequences are being felt in myriad ways. Mortgage companies have been forced to slash their marketing budgets which creates a cascade of effects," according to Ad Authority COO Ben Martin.
Mortgage woes seen holding US growth "below trend"
SAN FRANCISCO (Reuters) - A credit crunch stemming from turmoil in the subprime mortgage market will trigger further weakness in housing and keep U.S. economic growth "below trend" most of this year, a UCLA Anderson Forecast unit said in a report on Monday. The sluggish growth will help clear the way for the Federal Reserve to ease monetary policy at the end of the second quarter despite a historically low 4.5 percent unemployment rate, the economic forecasting unit said in its report. .
|
