Bad news

[carlo@CreditReportAtlas]

I've been watching CNBC all week and so far I've heard nothing but bad wraps about the mortgage subprime industry. Then recently we just witness one of our members experience a company fallout but fortunately he found a new company to represent (I'm not talking about you, Brendo).

Not much of a worry for me b/c I'm in the business of servicing mortgage companies. But how about the LO's out there? Aren't you guys/gals feeling a little worried about this mortgage subprime drought and disaster?

[Erik]

Great question, Carlo. Subprime lenders will always come and go, but the thing that is interesting to me is the discontinuation across the board of several subprime programs. If a large enough portion of the homeowner population is stuck in subprime loans like 2/28s for which there is no alternative at the 2 year mark, then what happens to all those people? Furthermore, if it's a big enough group, what does that do to the economy as a whole if so many are foreclosing at an increased rate?

It seems to me that our current mortgage market could have more widespread consequences.

[carlo@CreditReportAtlas]

Originally Posted by Erik

If a large enough portion of the homeowner population is stuck in subprime loans like 2/28s for which there is no alternative at the 2 year mark, then what happens to all those people?

I'm one of those guys that did a 2/28 in one of my properties. Things are fine with me financially but I have to admin, that 2/28 is a major rip off. My property (in the 2/28 program) is the most painful one amongst the others that I have. I could just imagine how some of these homeowners that are in these loan programs are feeling right now.

Erik, I seriously hope something comes up b/c this subprime woes can't last forever. People need money out there.

[Erik]

Yeah... it'll be interesting to see what happens over the next year or two.