1/3 of all ARMs in California will end in forclosure One of the things I love is little tidbits that sometimes get buried in articles about the implosion of the sub prime market. This article is about how lawmakers are blaming mortgage bond investor should be held liable for deceptive loans. Well there is plenty of blame to go around for the sub prime market (starting with Alan Greenspan's decision to keep the prime artificially low). But four paragraphs in we get this little tidbit

Economist Christopher Cagan projected about a third of all adjustable-rate loans originating from 2004 to 2006 will default because of reset, when the initial "teaser rate" expires and borrowers must start making regular payments that include principal, he said in a study by First American CoreLogic released last month.
While many consumer and civil rights groups want government intervention, not everyone is pleased about any legislation costing taxpayer dollars.

"People have bought houses they can't afford, period," said Christopher Thornberg, economist and principal of Beacon Economics. "So unless the government is going to give them $100,000 to $200,000 each, what option do they really have?"

Given that sub prime East Bay borrowers who are sixty days late have risen from 4.29 to 12.23 percent, that rate adjustment is going to come as a complete shock.

The problem is of course is that there isn't a clean happy solution to the sub prime borrowing situation. It's going to end in foreclosures, tighter lending standards and an overall tightening of credit.

Labels: CAMortgageNews, EastBay, EastBaySubprime, forclosure, novastar, refinance, Subprime, subprimeforeclosure, subprimemortgagelending

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Pacific Service Credit Union to offer below-market-rate mortgagesEast
Pacific Service Credit Union to offer below-market-rate mortgages
East Bay Business Times - Pacific Service Credit Union has been approved by the California Department of Financial Institutions to offer below-market-rate mortgages to low- and middle-income home buyers. The Walnut Creek-based credit union is one of more than 80 credit unions serving the East Bay market.

Labels: EastBay, EastBaySubprime, PacificServiceCreditUnion

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