real estate to hot up on stock market depressd, page-9

oolala

no you have it wrong, totally. It has nothing to do with people borrowing on historic lows, infact the interest rates have hardly moved.

subprime is a mortgage given to people who are high risk of having a loan as such their home loans are at a much higher rate.

this started right after 9/11 in america as a way of the banks to help protect their money from the disaster that happened to their money with the 9/11 attack, so the plan was to move money out the stock market and into property as the terrorist cant hit every house all at the same time.

they did this buy pushing out subprime loans to people to buy house's as the banks saw the money being safe spread around in property. this was sold to people even with no job or assett..

however! it comes with a 4 year honey moon period of very low introductury rate, and most people were mislead as to what the rate would go to when the honey moon period ended.

the bank did not see this as a problem because, when the honey moon period ended and the rates exploded up to their normal higher than normal home loan rates (as they are a high risk customer) if they couldnt pay, the bank would sell their house on them and as house prices go up there was no problem as the loan would be paid out.

Also the mortgage brokers were getting better kick backs on these subprime loans, so were selling subprime loans to people who could afford prime loans just so they could make more money out of the customers! There is thousands of people signs up to subprime loans who should be on prime loans.

then 4 years later after the home loans had been going off their 4 year honey moon period of an introductury 3 or 4 % and up to their normal rate of 13% -15% all these low income earners could not afford their repayments on their loans and hundreds and thousands of these people were forced to default on their loan

the banks were selling their hous's on them and as hous prices had fallen! they were not breaking even and were walking away with big debts.

then after a year of this happening August last year to be exact the banks released the info on how much they had lost and BANG you had your August subprime monster

This will keep going, as i said 4 year honey moon period, and these loans were still being pushed out and sold to people since then, so we have only seen the damage of the first year of these honey moon periods ending. there is still another 3 years of home loans to expire out their honey moon period and go from the low rate to their normal high rate above the normal rate for prime mortages.

so, we have 3 more years of this, and the US housing market is now at a 10 year low.. and still falling - which means this could get much worse yet.

there are streets, and this is no lie, complete streets of empty new house's where they were kicked out by the bank. little ghost towns all over america, now being destroyed and vandalised.

so no its falling house prices that created this problem.

If the US house prices had not been falling, the home owners who had their house's sold on them with this dirty scham would have broken even or made a profit, and the subprime monster would not exist as no one would have lost their money