CRASH AND BURN~!
NEW CENTURY FINANCIAL (Sub-prime mortgage lender) DOWN 67% (9.20) today. That's really bad news unless you're a short-seller of stocks (yay! I just paid for my NFL Draft trip!).
Sub-prime lenders are dying, because Congress basically went SOX on the industry on Friday. That's and foreclosures are mounting. Those who bought with exotic mortgages (I/O, ARM, Stated-Income, Cash-Back) are now severly hurt, well over 1 in 5 of said loans made in 2004/2005 will wind up foreclosing, and the NoVa/DC area is in the top3 locations for this bursting.
I believe I made warnings about this implosion earlier, so I hope those of you out there who have homes or just bought em got them with 15 or 30 year fixed (you're fine), or aren't planning on selling anytime soon. Don't take equity out unless you're re-investing it into your house (and are not moving for awhile), and you debt to income ratio would be 4:1 or less. (I'd say 3:1 honestly). I'd also recommend checking on your mortgage broker to make sure that they're not filing for bankruptcy or in trouble with the law right now. Be especially concerned if they're one of the following:
New Century
Fremont
HSBC
First Magnus
Yeah, I know this is bad news, but I'm watching a trainwreck on my stock ticker this morning, and wow, I mean, wow.
Sub-prime lenders are dying, because Congress basically went SOX on the industry on Friday. That's and foreclosures are mounting. Those who bought with exotic mortgages (I/O, ARM, Stated-Income, Cash-Back) are now severly hurt, well over 1 in 5 of said loans made in 2004/2005 will wind up foreclosing, and the NoVa/DC area is in the top3 locations for this bursting.
I believe I made warnings about this implosion earlier, so I hope those of you out there who have homes or just bought em got them with 15 or 30 year fixed (you're fine), or aren't planning on selling anytime soon. Don't take equity out unless you're re-investing it into your house (and are not moving for awhile), and you debt to income ratio would be 4:1 or less. (I'd say 3:1 honestly). I'd also recommend checking on your mortgage broker to make sure that they're not filing for bankruptcy or in trouble with the law right now. Be especially concerned if they're one of the following:
New Century
Fremont
HSBC
First Magnus
Yeah, I know this is bad news, but I'm watching a trainwreck on my stock ticker this morning, and wow, I mean, wow.