The
advent of "looser" credit standards during
the past decade have created an overabundance of subprime
mortgages. These loans were already 3 points higher
than rates available to more creditworthy borrowers,
and now they’re being raised again! Mortgage
companies make more profit on subprime loans than they
do on conventional loans and now things are getting
worse for those who can least afford it.
Approximately $1.2 billion in adjustable
rate mortgages will reset to higher rates this year. Nearly half of
that amount is in the form of sub-prime mortgages. Dallas,
Texas is just one example of a market that has been flooded
with subprime and adjustable rate mortgages. Dallas,
which has the highest number of 30-day delinquent home
mortgage loans of the 28 major real estate markets in
the United States, recorded an astounding 4.05% of mortgage
loans that were 30 days or more delinquent in the latest
quarter
When offered responsibility, subprime mortgages are certainly
legal. However, more and more evidence is showing that
certain lenders targeted specific individuals for subprime
lending – even individuals whose credit was good
enough to receive standard lending.
Subprime lenders are beginning to see legal action. For
instance, Elliott Spitzer, newly elected Governor for
New York, discovered that the Home Mortgage Disclosure
Act showed that black and Hispanic borrowers were more
likely to get subprime loans from Countrywide
Financial.
Countrywide agreed, with lots of pressure from the New
York attorney general, to adopt measures to prevent discriminatory
pricing for minority borrowers. The settlement agreement
suggests that Countrywide was steering minority borrowers
into higher cost loans.
If you have a subprime mortgage and you feel you may
have been inappropriately targeted or misled as to the
conditions, please contact one of our attorneys by phone
or email. To find out more about other cases we handle,
select another case type on your left.
SUB-PRIME
BLOG ARTICLES:
Blog articles are written by Angel
Reyes To read other entries by Angel or Brian Cuban,
visit their blog at BrianCuban-AngelReyesBlog.com.
3/9/07 – Hedge
Funds Bet Wrong on Subprime Markets
3/5/07 – Subprime
Troubles - The Music Has Stopped
2/19/07 – Mortgage
Derivatives Decline
2/16/07 – Net
Losses Keep Piling Up For Subprime Lenders
2/15/07 – The
Other Side of Sub-prime Mortgages
1/26/07 – Sub-prime
Loans: Let the Buyer Beware!
1/8/07 – Sub-prime
Loans... Blessing or Curse?
SUB-PRIME
MORTGAGE NEWS ARTICLES:
3/13/07 – CNNMoney; Scary
math: More homes, fewer buyers
3/13/07 – AP Press; Late
Mortgage Payments Reach High
2/23/07 – CNNMoney; Subprime
mortgage lender shares fall sharply
2/17/07 – Knowledge@Wharton; Could
Tremors in the Subprime Mortgage Market Be the First
Signs of an Earthquake?
2/16/2007
– Bloomberg
Press; Subprime
Mortgage Derivatives Tumble for a Fourth Straight Week
2/13/2007 – Goldman
Sachs; "Subprime mortgage
credit outlook is bleak, prime is fine" (right
click "save
as" here for a PDF)
2/13/2007 – Bank
of America; "Short Housing
Risk in the Credit Market" (right
click "save
as" here for a PDF)
10/19/2006
– Los
Angeles Times; More Homeowners Going Into Default
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