Today’s subprime mortgage moment is brought to you by local company (and employer) State Street Corp., 3.8% owners of disgraced (and delisted) subprime mortgage loan lender New Century Financial.
Not everyone thinks the fallout from the subprime lending crisis will affect our economy in the longterm. (Actually, he seems to be talking about the housing market slowdown as a whole, not just subprime lending, but w/e>)
A large fraction of buyers who used 100 percent and no-doc financing did so because it was available and easy …
… these borrowers are better quality than their loans’ minimum requirements. This performing fraction could have found loans with any of several FHA, Fannie or Freddie programs — more bureaucratic hassle, a need for a co-signer there, a little more saving here, but no big deal. The underwriting of many state and local assistance programs is indistinguishable from mid-range subprime …
As much fun as it is to contemplate disaster for profiteers, owners and enablers from Main to Wall and beyond, stick with the high-probability case: housing is likely to be a multiyear economic drag, but not even enough to cause a recession.
Housing to be a multiyear economic drag – By Lou Barnes, Inman News
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