While some of the nation's leading economists are optimistic for an improved housing outlook during the second half of 2007, Wall Street's capital markets researchers -- the money guys -- are concerned hundreds of thousands of home loan borrowers could be in default before the summer months arrive. Chris Flanagan, managing director and head of global research for JP Morgan Securities, said approximately 35 percent of all subprime mortgage borrowers could have a difficult time meeting their loan obligations when their adjustable-rate mortgages hit their first adjustment period. "These are consumers who were getting into 100 percent loans when home prices were softening," Flanagan said. "The more troubling characteristic were the lenders willing to reach to make those mortgages available." Flanagan's research revealed that 10 percent to 15 percent of all new loans originated in the fourth quarter of 2005 and all of 2006 were subprime loans -- mortgages that typically carry higher int...
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