Standard & Poor’s raised projections of troubled US mortgage securities. The losses will not stop nor slow down until the first half of 2010. More defaults on home mortgages and loans are expected.
http://www.reuters.com/article/marketsNews/idUSN0627123920090706
Should the mortgage crisis be blamed on subprime borrowers? Evidence shows that it only accounted for 34% of bad underwriting while more complicated and crazy mortgage products with rates that shot through the sky accompanied initially with very low teaser rates accounted for a majority of foreclosures.
http://business.theatlantic.com/2009/07/dont_blame_subprime_mortgages.php
WSJ article analyzing the foreclosure crisis.
Slow to adapt reverse mortgages, Texas is the last state not to offer this financial instrument.
One of the Texas consumer safeguards requires owning equity in a house before anyone could apply for a reverse mortgage…
With declining home values, lenders are hesitant to participate in a reverse mortgage. These are specialty loans only available to borrowers 62 years of age and older to release the home equity of the property in lump sums or multiple payments.
When home prices are falling, no lender wants to pay one dollar for a property that could be valued at fifty cents in a few years.
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