subprime mortgages fall in half first part of 2007
Richard Geller
December 20, 2007
Subprime mortgages fell to 10% of mortgage loans originated in the first half of 2007. That is from almost 20% the similar period before.
This is very significant for the homeowner who wants to sell any time soon.
The real estate market is not a cash market. It's a credit market. It is fueled by credit.
Taking out subprime borrowers from the pool of buyers means there are fewer prospective buyers.
In addition, prices are falling and there are a lot more distressed sales taking place. These are forced sales. They drive down the comparable property values. As more homeowners find out they have no equity they to are tempted to do short sales or deed in lieu of foreclosure or simply walk away.
In the old days, you needed a down payment to buy a house and you needed great credit. How many people today have great credit? How many people will sell their houses, given the fact that financing is drying up.
It is happening so fast. In some areas houses are selling for 50% of what they sold for a few years ago. The reason is a lack of available credit. It makes it much more important to sell your house now, and provide easy financing to prospective buyers.
This is very significant for the homeowner who wants to sell any time soon.
The real estate market is not a cash market. It's a credit market. It is fueled by credit.
Taking out subprime borrowers from the pool of buyers means there are fewer prospective buyers.
In addition, prices are falling and there are a lot more distressed sales taking place. These are forced sales. They drive down the comparable property values. As more homeowners find out they have no equity they to are tempted to do short sales or deed in lieu of foreclosure or simply walk away.
In the old days, you needed a down payment to buy a house and you needed great credit. How many people today have great credit? How many people will sell their houses, given the fact that financing is drying up.
It is happening so fast. In some areas houses are selling for 50% of what they sold for a few years ago. The reason is a lack of available credit. It makes it much more important to sell your house now, and provide easy financing to prospective buyers.
Print
Email
