Might be worth having an awareness of the US mortgage market in 2011 and 2012
An IMF Report demonstrated that there is a significant number of Alt A and other loans resetting in 2011.
What this means is that the mortgage crisis might continue in the USA and this might affect the cost of lending for Australian banks and affect our market.
So you’ve probably heard all about the mortgage rate resets that will occur over the next decade, but now you can see them in colorful graph form.
Go to figure 1.7 and page 8 Monthly Mortgage Rate Resets. re IMF Report.
The graph, based on Credit Suisse data and published by the International Monetary Fund includes everything from negative amortization loans to agency-backed loans and prime paper.
It details several types of adjustable-rate mortgages that are due to reset over ten years, whether it’s shedding their interest-only option or their ultra-low start rate.
Unfortunately, for many borrowers stuck in option-arms and other high-risk adjustable loans, once their interest rates do reset, and monthly mortgage payments rise substantially, many will have little or no equity to bail themselves out.
Interestingly, many loans deemed prime during loan origination and subsequent dumping on the secondary market will in fact be identified as subprime loans once interest rates reset, as many borrowers who got into the loans did so only because the teaser rate was the only affordable payment.
Oh if you are buying US based property will there be another wave of foreclosures and price drops in 2011 and 2012??
The Nine MSN story highlights the US foreclosure story in Dec 2010 Foreclosures up 25% of US home sales
http://money.ninemsn.com.au/article.aspx?id=8174723
Nevada led the nation with foreclosure sales accounting for nearly 54 per cent of all home sales,
Eyes wide open...
Or unaware?
cheers
An IMF Report demonstrated that there is a significant number of Alt A and other loans resetting in 2011.
What this means is that the mortgage crisis might continue in the USA and this might affect the cost of lending for Australian banks and affect our market.
So you’ve probably heard all about the mortgage rate resets that will occur over the next decade, but now you can see them in colorful graph form.
Go to figure 1.7 and page 8 Monthly Mortgage Rate Resets. re IMF Report.
The graph, based on Credit Suisse data and published by the International Monetary Fund includes everything from negative amortization loans to agency-backed loans and prime paper.
It details several types of adjustable-rate mortgages that are due to reset over ten years, whether it’s shedding their interest-only option or their ultra-low start rate.
Unfortunately, for many borrowers stuck in option-arms and other high-risk adjustable loans, once their interest rates do reset, and monthly mortgage payments rise substantially, many will have little or no equity to bail themselves out.
Interestingly, many loans deemed prime during loan origination and subsequent dumping on the secondary market will in fact be identified as subprime loans once interest rates reset, as many borrowers who got into the loans did so only because the teaser rate was the only affordable payment.
Oh if you are buying US based property will there be another wave of foreclosures and price drops in 2011 and 2012??
The Nine MSN story highlights the US foreclosure story in Dec 2010 Foreclosures up 25% of US home sales
http://money.ninemsn.com.au/article.aspx?id=8174723
Nevada led the nation with foreclosure sales accounting for nearly 54 per cent of all home sales,
Eyes wide open...
Or unaware?
cheers
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