Archive for July, 2008
Lender liability lawsuits are beginning as builders see banks pulling back from their contractual agreements. In some cases it is due to lack of funds, while in other cases lines of credit are reduced as new appraisals come in millions of dollar lower than previous appraisals. Developer John Thomas says he had nearly finished building a 222-unit condominium and hotel project in Stockton, Calif., when his lender, First Banks Inc.’s Missouri-based First Bank, wouldn’t release the final $6 million from his $40 million construction loan. There are other similar cases.
First-time homebuyers have originated less than a tenth of all subprime loans since 1998, according to a 2007 Center for Responsible Lending analysis. As recently as 2006, just over half of all subprime loans were refinances of existing home loans. The expected foreclosure toll from these loans will outpace the ownership gains by nearly a million families, the center estimates.
People react in different ways to events in life. While some think of foreclosure as a business decision, others see it as a personal failure. This article shows how some see foreclosure as a life-and-death situation. Our hearts go out to those involved:
California home owners have been walking away from their mortgages in bunches. Some say Californians expect state protection from predatory lenders, and honesty from professionals. Time is money in California, where one can get behind faster than a sandstorm in the California desert. Mortgage servicers recorded “notices of default” on 118,020 homes from April to June, up 125% from the same period in 2007, according to DataQuick Information Systems. That total was the highest since the firm began recording foreclosure statistics in 1992.
It seems as though Wachovia is cutting jobs to compensate for another huge loss. This former small North carolina bank knows what it’s like to grow over the years. Too bad they did not follow the Wells Fargo model of pricing by risk, as opposed to the HSBC Finance model of giving loans to anyone and everyone. The losers are the 11,000 people that are out of work. It looks like mortgage heydays are like eating an ice cream cone in the hot Carolina cotton fields – it will not last forever.