10 million loans could go into default over 18 mo
Backdraft from the Bubble
There are signs that the bursting housing bubble is poised to unleash an explosive backdraft with negative and potentially far-reaching implications for Wall Street and Washington.
In recent years, writes the The New York Times,
borrowers have flocked to riskier mortgages that gave them the means to keep up with an overheated housing market. Now some advocacy groups say that as delinquencies and foreclosures mount, so too will lawsuits against lenders.
“I think a class action is coming,” said John Taylor, the chief executive of the National Community Reinvestment Coalition, a Washington group that is an advocate for low-income borrowers. “It’s a storm cloud that’s waiting to really open up and rain on the lenders’ parade.”
Taylor contends that lenders have marketed their riskiest loans to low-income borrowers in violation of so-called fair-lending laws, which require that a loan be made only when there is a substantial likelihood of repayment.
What's more, according to the Mortgage Foundation, the
fallout from the surge in subprime and bad credit mortgages taken out during the housing boom could become a major issue in the 2008 national elections, political analyst Charlie Cook told the National Association of Realtors at advocacy training sessions in D.C., this week.
As many as 10 million loans could go into default over the next 18 months as borrowers run into financial problems when the low-interest introductory period of their loan terms ends...
Speaking at a luncheon, Cook said that the number of potential foreclosed loans is so large that problem subprime/exotic/ bad credit mortgages like interest-only home loans could “be a big political issue” while 2008 national campaigns are underway.
“The issue is not on the political radar screen today but it could be in 18 months,” he said.
There are signs that the bursting housing bubble is poised to unleash an explosive backdraft with negative and potentially far-reaching implications for Wall Street and Washington.
In recent years, writes the The New York Times,
borrowers have flocked to riskier mortgages that gave them the means to keep up with an overheated housing market. Now some advocacy groups say that as delinquencies and foreclosures mount, so too will lawsuits against lenders.
“I think a class action is coming,” said John Taylor, the chief executive of the National Community Reinvestment Coalition, a Washington group that is an advocate for low-income borrowers. “It’s a storm cloud that’s waiting to really open up and rain on the lenders’ parade.”
Taylor contends that lenders have marketed their riskiest loans to low-income borrowers in violation of so-called fair-lending laws, which require that a loan be made only when there is a substantial likelihood of repayment.
What's more, according to the Mortgage Foundation, the
fallout from the surge in subprime and bad credit mortgages taken out during the housing boom could become a major issue in the 2008 national elections, political analyst Charlie Cook told the National Association of Realtors at advocacy training sessions in D.C., this week.
As many as 10 million loans could go into default over the next 18 months as borrowers run into financial problems when the low-interest introductory period of their loan terms ends...
Speaking at a luncheon, Cook said that the number of potential foreclosed loans is so large that problem subprime/exotic/ bad credit mortgages like interest-only home loans could “be a big political issue” while 2008 national campaigns are underway.
“The issue is not on the political radar screen today but it could be in 18 months,” he said.
