The End of Sub-Prime Lending
Liquidity for real estate will dry up this year because:
-Sub-prime lending is not as profitable as it was (as per this article.)
-Regulators are curtailing risky loans.
-Interest rates are higher than they were in '04 and '05 and are going higher.
-Increased loan losses will cause banks to tighten lending standards.
Subprime real estate loan party is over in 2006
By Janis Mara, Inman News
As the housing market slows, the booming subprime real estate loan market — loans for people with less-than-stellar credit — is also slowing, observers say, despite a long runup.
"In general, there's been a subprime boom over the last two years," said Jeffrey DerGurahian, senior vice president of capital markets at Metrocities Mortgage, "but Wall Street is getting concerned about the risks in these loans.
"Right now the execution selling loans to Wall Street is not as attractive as it used to be. People are afraid of the credit risk going toward a slowing market," the senior vice president said.
More...
-Sub-prime lending is not as profitable as it was (as per this article.)
-Regulators are curtailing risky loans.
-Interest rates are higher than they were in '04 and '05 and are going higher.
-Increased loan losses will cause banks to tighten lending standards.
Subprime real estate loan party is over in 2006
By Janis Mara, Inman News
As the housing market slows, the booming subprime real estate loan market — loans for people with less-than-stellar credit — is also slowing, observers say, despite a long runup.
"In general, there's been a subprime boom over the last two years," said Jeffrey DerGurahian, senior vice president of capital markets at Metrocities Mortgage, "but Wall Street is getting concerned about the risks in these loans.
"Right now the execution selling loans to Wall Street is not as attractive as it used to be. People are afraid of the credit risk going toward a slowing market," the senior vice president said.
More...
posted by Little_Silvered at 9:04 AM
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