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Non-Tech : Bill Wexler's Trading Cabana -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (1674)	6/14/2007 5:24:48 PM
From: RockyBalboa	Respond to of 6370

The seeds of disaster. But it is from the first 3 months. AP Foreclosures Up Subprime Mortgages Thursday June 14, 4:53 pm ET By Jeannine Aversa, AP Economics Writer Foreclosures Surge in Subprime Market, Industry Group Reports WASHINGTON (AP) -- Late payments and new foreclosures on adjustable-rate home mortgages made to people with spotty credit climbed to all-time highs in the first three months of the year. The Mortgage Bankers Association, in its latest snapshot of the mortgage market, reported Thursday that the percentage of payments that were 30 or more days past due for "subprime" adjustable-rate home mortgages jumped to 15.75 percent in the January-to-March quarter. That was a sizable increase from the late 2006 delinquency rate of 14.44 percent and was the highest on record, the association's chief economist Doug Duncan said in an interview with The Associated Press. People who have taken out subprime mortgages, especially adjustable-rate loans, have been clobbered. Rising interest rates and weak home prices have made it increasingly difficult for people to keep up with their monthly payments. Lenders in the subprime market have been hard hit; some have been forced out of business. The percentage of subprime adjustable-rate mortgages that started the foreclosure process in the first quarter of this year climbed to 3.23 percent. That compared with 2.7 percent in the final quarter of 2006 and was the highest on record, Duncan said. The first-quarter's increase in new foreclosures was mostly driven by problems in California, Florida, Nevada and Arizona, he said. In those four states, foreclosures are being "heavily influenced by speculators who are walking away from properties now that home prices have started to fall in areas of those states and they face resets in the adjustable-rate mortgages they took out for these homes," Duncan said. Federal Reserve Chairman Ben Bernanke, in a speech last week, predicted there will be further increases in delinquencies and foreclosures as interest rates on many subprime adjustable-rate loans will go up as they reset. Analysts estimate that nearly 2 million adjustable-rate mortgages will reset to higher rates this year and next. Some subprime borrowers were lured by an initially low "teaser" rates offered during the 5-year housing boom that ended in 2005. But those teaser rates can spike upward after the first few years, causing payment shocks. Still, Bernanke said it was unlikely that troubles in the subprime mortgage market would seriously spill over to the broader economy or the financial system. Loose lending standards, including allowing borrowers to get mortgages with little documentation, contributed to problems in the subprime market, Bernanke said. Congress is looking into possible action. Bernanke, meanwhile, has said the Fed will consider tougher rules to curb abusive practices and improve disclosure. "In doing so, however, we must walk a fine line," said Fed Governor Randall Kroszner, who presided over a public hearing Thursday on the matter. "We must determine how we can help to weed out abuses while also preserving incentives for responsible lenders," he said. For all mortgages, the delinquency rate actually dipped to 4.84 percent in the first quarter, an improvement from the fourth quarter's rate of 4.95 percent, which had marked a 3 1/2 year high. The number of all mortgages starting the foreclosure process in the first quarter rose to a record high of 0.58 percent. That surpassed the previous high of 0.54 percent in the final quarter of 2006. The association's survey covers a total of nearly 44 million loans nationwide. Sen. Charles Schumer, D-N.Y., said the survey shows the need for his legislation that would help homeowners avoid foreclosures by boosting funds to community groups that provide financial counseling. "It is not too late to act to help families before they lose their homes," he said. "Left alone, a wave of new foreclosures threatens entire communities across the country." Wall Street was jarred when the association's previous report in March showed surging delinquencies and new foreclosures in the final quarter of last year. The Dow Jones industrials tumbled that day nearly 243 points. The subprime meltdown began in February, when New Century Financial Corp. and HSBC Holdings reported more borrowers missing payments. The spike in bad loans scared banks and investors away from risky debt, drying up much of the industry's financing. More than 30 subprime lenders, including New Century, have gone bankrupt this year. With the hope that subprime problems eventually will be worked through and won't infect the overall mortgage market, Duncan said: "We're just urging people to take a deep breath and look at the big picture." Mortgage Bankers Association: mbaa.org

To: RockyBalboa who wrote (1674)	11/8/2007 9:42:39 PM
From: RockyBalboa	Respond to of 6370

SUBPRIME D-DAY: Chronology of events: FACTBOX-Subprime crisis affects banks worldwide (Reuters) - The resignation of Citigroup CEO Charles Prince after the bank said it might suffer billions of dollars in writedowns for subprime losses has spooked financial markets. Here is a list of some of the banks around the world that have been affected by the turmoil: February 8, 2007 - HSBC - Europe's biggest bank HSBC Holdings blames soured U.S. subprime loans for its first-ever profit warning in February. On September 21, it announced the closure of its U.S. subprime unit, Decision One Mortgage, and records an impairment charge of about $880 million (423 million pounds). April 2 - NEW CENTURY - The U.S. subprime lender files for Chapter 11 bankruptcy protection in the biggest collapse of a mortgage lender in the U.S. housing downturn. July - IKB & SACHSENLB - Two banks in Germany, IKB and state bank SachsenLB suffer exposure by investing in the U.S. subprime market. The German banking industry bails out IKB but SachsenLB almost goes under and is quickly sold to state-backed Landesbank Baden-Wuerttemberg (LBBW). August 9 - BNP PARIBAS - The French bank bars investors from redeeming cash in $2.2 billion worth of funds, telling the markets it is unable to calculate the value of the three funds due to turmoil in the subprime market. August 9 - NIBC - The Dutch merchant bank discloses 137 million euros (95.1 million pounds) of losses on U.S. asset-backed securities in the first half, and shelves plans for an initial public offering indefinitely. September 13 - NORTHERN ROCK - The mortgage lender experiences a bank run following a credit crunch sparked by the subprime crisis. The Bank of England steps in to rescue it. October 1 - CREDIT SUISSE says its results will be "adversely impacted" by the market turmoil but it will remain profitable in the third quarter of 2007. October 15 - CITIGROUP, the largest U.S. bank by market value, says third-quarter profit fell 57 percent due to losses, with net income down to $2.38 billion from $5.51 billion a year earlier. October 19 - WACHOVIA - The fourth-largest U.S. bank posts a 10 percent decline in third-quarter profit, to $1.69 billion from $1.88 billion a year earlier, having suffered $1.3 billion of write-downs resulting from credit market turmoil. October 24 - MERRILL LYNCH stuns Wall Street reporting the biggest quarterly loss in its history after writing down $8.4 billion, mostly from bad investments related to risky subprime mortgages. October 26 - COUNTRYWIDE - U.S. mortgage lender Countrywide Financial Corp posts a $1.2 billion third-quarter loss after writing down $1 billion in subprime-lending losses. October 29 - MITSUBISHI UFJ FINANCIAL GROUP, Japan's largest bank, says it would write down the value of subprime-related investments by as much as 30 billion yen (126 million pounds) -- six times more than previously announced. October 30 - UBS - Swiss bank UBS reports a third-quarter pre-tax loss of 726 million Swiss francs ($624.8 million) after it took a charge of 4.2 billion francs on subprime-related losses in its fixed income investments. November 4 - CITIGROUP says it may write off $8 to $11 billion of subprime mortgage losses, on top of a $6.5 billion write-down in its third quarter. reuters.com