bcbuds sent me this link (thanks buds).
New Data Show That Nontraditional Loans Are BeginningTo Haunt Borrowers With Midlevel Credit; Prime Still FineWe will be hearing the same here soon enough, me thinks.
The mortgage market has been roiled by a sharp increase in bad loans made to borrowers with weak credit. Now there are signs that the pain is spreading upward.
Borrowers who take out Alt-A mortgages are considered less risky than subprime borrowers because of their higher credit scores. But as the housing market cooled and loan volume declined, some lenders lowered their standards for Alt-As. Now a rising number of borrowers who took out these loans are running into trouble.
The company cut back on riskier loans and began relying more on analytical tools to verify a borrower's income and creditworthiness.What a great idea. Let's use some analysis and verification.
As in the subprime sector, the riskiest loans are those made to home buyers who put little, if any, money down and don't document their income or assets.CMHC thinks it's a great idea to back 0% down loans - with our tax dollars. Will heads roll when it goes sideways? Scameron jumped ship. Did he see his head rolling?
The mortgage industry is battling a rash of cases in which borrowers, loan officers and appraisers collude in providing false information to induce lenders to advance more money than homes are worth.That sounds very similar to what has been going on here. I think that the term was "liar loans".
I think we are heading for a real mess - and fast. Your thoughts?