Mortgage & Loan: Subprime Loans At Highest Default Levels Since 2001

More evidence that it's all over for the high-risk lending, as Bloomberg reports that the subprime market is facing record levels of collapse:

Defaults on mortgages to people with poor credit histories or large debt burdens rose in November above their worst levels during the last recession six years ago, according to Friedman Billings Ramsey Group Inc....Defaults on subprime loans have surged as rates on ones made in 2002, 2003 and 2004 adjust higher as their fixed-rate periods end following an increase in short-term interest rates from the lowest in 45 years. Subprime mortgages made in 2005 and 2006 are suffering from slumping home prices and looser lending standards.

And following up on JP Morgan's own exit from the subprime arena, The Real Estate Bloggers noted that Wachovia is shuttering its own subprime lending unit:

The meltdown in the subprime market is coming to a head as Wachovia is shutting down its EquiBanc Mortgage subsidiary. The subprime lending division is facing tighter restrictions, a limited market for selling the debt, and new regulatory challenges forcing Wacovia to re-evaluate the business.

There's no more money to be made in selling shady mortgages to poor people, so the shysters are bailing with the quickness...leaving the foreclosed and defaulted homeowners holding the bag. Did you expect any less, really?

Posted at February 2, 2007 04:33 PM

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More evidence that it's all over for the high-risk lending, as Bloomberg reports that the subprime market is facing record levels of collapse: Defaults on mortgages to people with poor credit histories or large debt burdens rose in November above their worst levels during the last recession six years ago, according to Friedman Billings Ramsey Group Inc....Defaults on subprime loans have surged as rates on ones made in 2002, 2003 and 2004 adjust higher as their fixed-rate periods end following an increase in short-term interest rates from the lowest in 45 years. Subprime mortgages made in 2005 and 2006 are suffering from slumping home prices and looser lending standards. And following up on JP Morgan's own exit from the subprime arena, The Real Estate Bloggers noted that Wachovia is shuttering its own subprime lending unit: The meltdown in the subprime market is coming to a head as Wachovia is shutting down its EquiBanc Mortgage subsidiary. The subprime lending division is facing tighter restrictions, a limited market for selling the debt, and new regulatory challenges forcing Wacovia to re-evaluate the business. There's no more money to be made in selling shady mortgages to poor people, so the shysters are bailing with the quickness...leaving the foreclosed and defaulted homeowners holding the bag. Did you expect any less, really?