An Interesting View on the Sub-prime Market Problem
I know that most of what I have written about here is on San Diego life - some on housing, but more on just living here in general - what I enjoy, things I have learned as a new resident, and more.
I am stepping out of that tradition just a bit to talk some about the foreclosure and short sale problems we are seeing here in San Diego, and the newer issues surrounding the subprime market. I can't help it, because I am in the industry, as a Carlsbad REALTOR. You have all heard about it, no doubt - the media has certainly done their job of publicizing the increase in both types of sales - it's been everywhere in the headlines, on the TV, the radio, and all over the Internet. Some people who are facing financial troubles are fortunate and able to sell their homes before foreclosure occurs. but many are not...or perhaps don't try, or don;t see that they have any choice.
While the foreclosure rate here is high, and has increased since last year, it is not anywhere near the rate some other states, like Michigan, Florida and Colorado, are seeing.
Coupled with that, we have recently been bombarded with news about the subprime market and the financial difficulties that certain lenders, most notably New Century, are facing. Potential bankruptcy, and more. But it also means that buyers who are trying to get financing, at least 100%, may NOT be able to do so, although it was easy in the past. Or that buyers who have been approved for such a loan, but not yet closed, may find themselves in a bind with no loan.
It's not clear what the source of all these problems is - is it the fault of the mortgage lenders and the kind of programs they encouraged buyers to obtain? Is the foreclosure and short sale rate rising rapidly because so many buyers are not being responsible, or got themselves in over their heads with huge mortgages?
And what about the potential impact on the economy if these problems continue to escalate?
I read a recent article in Inman News about this very issue, and I thought the author's take on the matter was enlightening. Rather than put the blame on these troubles on the homeowners who took on these mortgages that are now creating their financial woes, as we tend to see in the media, Scott Thompson, the writer, takes the position that we must really look at the mortgage companies themselves as the source of the problem. "A Short-sale Tale" is an interesting read.
I am stepping out of that tradition just a bit to talk some about the foreclosure and short sale problems we are seeing here in San Diego, and the newer issues surrounding the subprime market. I can't help it, because I am in the industry, as a Carlsbad REALTOR. You have all heard about it, no doubt - the media has certainly done their job of publicizing the increase in both types of sales - it's been everywhere in the headlines, on the TV, the radio, and all over the Internet. Some people who are facing financial troubles are fortunate and able to sell their homes before foreclosure occurs. but many are not...or perhaps don't try, or don;t see that they have any choice.
While the foreclosure rate here is high, and has increased since last year, it is not anywhere near the rate some other states, like Michigan, Florida and Colorado, are seeing.
Coupled with that, we have recently been bombarded with news about the subprime market and the financial difficulties that certain lenders, most notably New Century, are facing. Potential bankruptcy, and more. But it also means that buyers who are trying to get financing, at least 100%, may NOT be able to do so, although it was easy in the past. Or that buyers who have been approved for such a loan, but not yet closed, may find themselves in a bind with no loan.
It's not clear what the source of all these problems is - is it the fault of the mortgage lenders and the kind of programs they encouraged buyers to obtain? Is the foreclosure and short sale rate rising rapidly because so many buyers are not being responsible, or got themselves in over their heads with huge mortgages?
And what about the potential impact on the economy if these problems continue to escalate?
I read a recent article in Inman News about this very issue, and I thought the author's take on the matter was enlightening. Rather than put the blame on these troubles on the homeowners who took on these mortgages that are now creating their financial woes, as we tend to see in the media, Scott Thompson, the writer, takes the position that we must really look at the mortgage companies themselves as the source of the problem. "A Short-sale Tale" is an interesting read.
Labels: foreclosure, Inman News, Scott Thompson, short sale, subprime market
posted by Jeff Dowler | 9:37 PM
0 Comments:
Post a Comment
<< Home