Sub Prime

bthahir · Joined: 05 Sep 2007 Posts: 36 13.22 Dollars($)

Can some one please explain me, whats the exact stage of sub prime crisis? what are all the remedial stepd taken by Federal? Please explain.

evolovik26 · Posted: Tue Nov 27, 2007 8:13 am Post subject:

Personal oppinion:
This is not a subprime crisis but a greed crisis. Too many greedy banks, brokers, realtors, clients trying to make money and get alot for nothing.
But basically right now there is not alot of liquidity in the market so banks have risen their standards in who they give mortgages to. States have came out with new laws as to what you can and cannot do. As a result there is less money to be made and harder to get a mortgage in general. This means alot of brokerages and smaller lenders are going out of business and alot of borrowers cant get a mortgage.
Good things comming out of this:
1. Less predatory lending practices.
2. Borrowers are given mortgages only when they can afford them.
3. Better laws and practices to protect uneducated borrowers.
4. Less competition for brokers and bankers

Bad things:
1. Less options for clients.
2. Inability for alot of clients to refinance when their ARM resets due to not having enough income, the program they were on no longer exist, they owe more on mortgage then their house is worth.
3. It takes longer to get the loan done.
4. It is harder to get a home.
5. It is harder to sell a home.
6. Creates alot of people who a desperate enough to commit fraud and to cheat the system wich will cause more problems.
7. As more people go in foreclosure housing market declines more.
Forecast:
According to wallstreet speculators you will see another drop in 2008 and things should start to even out in 2009 and go back up in 2010.
Personal opinion: I believe there is a point at wich there will not be enough liquidity to support the market and if we hit it there is no way to tell what will happen but i suspect anything from ressesion to another Great depression.

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