The U.S. Housing market is still in trouble, due mainly to failed subprime mortgage practices. recent home sales reports show a modest increase, however the increase is considered by many analysts to be half of what they were expecting.
Analysts believe the major contributor to the housing slump is the increase in mortgage foreclosures, or more specifically subprime mortgage foreclosures.
LOWES
Over the past several years, many subprime home mortgage institutions were gift home mortgages to individuals who should never have received them. The homeowners receiving them did not meet customary basic financial home mortgage standards. However, as with any sector boom, there are all the time folks out there looking for a quick buck. Unfortunately, in this case it was fly-by night home lending institutions that quickly setup shop and took advantage of the housing market boom. Regularly good lending institutions cap the number a homeowner can finance, relative to their income. This cap Regularly has been in the range of 28-33% of their earnings for the home mortage, and around 36% for total financing including; home, car, prestige card purchases, etc. These fly-by night home lending institutions allowed much higher caps, basically enslaving the homeowner to a home mortgage that they could not sustain. The result, eventual foreclosure.
The housing market has now taken a hit by this type of lending behaviour and fellowships such as Lowes and Home Depot have already seen an impact in their businesses.
The speed in which the home commerce turns around will be directly proportional to how quickly the subprime mortgage commerce gets cleaned up. Fortunately the cleanup has already begun, however there is probably someone else year ahead of us before the smoke fully clears.
Housing Slump Continues Due to Failed Subprime Mortgages LOWES
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