Subprime Mortgage Blues!

You've heard it in the news lately, about the subprime mortgage market that's now in trouble. Well, it's about time! We all knew it would catch up to them someday. It just didn't seem right. People were buying houses with loans they shouldn't have qualified for. Stated income, and or 100% financing and other exotic loans are now bad business and referred to in the media as "predatory lending". The notices of default are coming in very fast now as many of these loans were adjustable rates with prepayment penalties and or balloon payments. With the interest rates rising above market level on these loans, monthly payments increasing beyond affordability and many of the borrowers put little or nothing down, it's no wonder that they are walking away from them and letting their property go into foreclosure. Just today, I had a sale transaction fall thru because of these lousy subprime loans and the lenders involved. It was the second time that this escrow fell thru. Both times the buyers were investors going for 100% financing from the "subprime" market. Both times I had pre-approval letters and from the lenders. I will now be very skeptical of this type of financing in offers presented to me on my listings.