Housing market to deteriorate further - because sub prime lenders are out of business
The sub prime mortgage collapse has been bad, resulting in foreclosures, grief, plummeting home values and welcoming upcoming recession. But much worse is the fact that the sub prime banks collapsed as well, together with the enormous amount of future mortgage loans money. The simple fact is that it is not going to be enough qualified buyers for years to come, to gulp the unsold inventory of existing homes, new construction already on its way, and the future projects being planned.
The sub prime mortgage lenders loaned to everyone, which was needless to say a huge mistake, creating a humongous pool of new unqualified buyers who hadn't had access to the money before, then further sustaining them as homeowners with creative mortgage programs. Some were way too creative. Now the party is over, and the real estate market is over saturated with foreclosed and REO homes. And with sub prime money gone, the future, at least mid term looks bleak. The lenders have also tightened lending standards for the good credit customers. And worse yet, in some areas construction continues like nothing happened.
Fri Nov 9, 2007 01:11PM by Tony | More in Economy | Comments (0)
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