So over the past year the subprime mortgage industry has gone straight down the tubes. So what is on the horizon? Much worse.
This weekend’s WSJ had an excellent artice about the subject. Even more mortgage resets are coming due in 2008. Bank of America estimes $85 million in subprime mortgages will reset in the first quarter of 2008, $101 million in the second quarter. Falling home prices and tighter lending standards mean borrowers who can’t afford the increase have few options when it comes to getting out to the debt obligation. The Mortgage Bankers Association estimates that 1.44 million homes will enter foreclosure in 2008, that up from 705,000 in 2005.
The housing slowdown is emerging as a major issue in both the presidential and congressional races as this issue could push our economy into a housing fueled recession. What will happen? Only time will tell.
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