Subprime lenders go belly up, taking homeowners with them
Congress blames Wall Street. Wall Street blames banks. But no matter who is to blame, hundreds of Hudson Valley homeowners are missing home payments and facing foreclosure now that subprime lenders have gone out of business.
Two weeks ago, New Century Lending joined Ameriquest, Ownit and dozens of others in declaring bankruptcy, leaving homeowners who had poor credit to begin with in dire straits and thousands of subprime employees out of work.
In August 2005, at the height of the market frenzy, subprime lenders were busy putting people who had less than perfect credit into homes and condos. The result was an explosion in housing prices, with sellers fielding bidders. But circumstances have changed for both lenders and sellers, creating a buyers’ market with a glut of homes to choose from.
The Center for Responsible Lending (CRL) cited a spike in home ownership in the United States at 69 percent in mid-2005, an all-time high, but says that number is dropping as borrowers realize they have paid too much and earn too little once their “creative mortgages” have lost their magic. CRL estimated more than 1 million sub-prime loans will default, causing a crisis nationwide.
Greg Eckert, vice president of Centennial Mortgage (www.cmloans.com) at its Kingston headquarters, said there are still loans out there, even though the subprime market has imploded. “The loans that had limited or no income check, less than perfect credit, 100 percent financing loans are gone and they probably should have from day one. Lenders got a little too relaxed with their guidelines. Common sense has returned to the forefront and assess the risks of each loan … it was a recipe for disaster.”
Add Comment
Popular
-
1. Glenmere Mansion prepares for a new debut
-
2. Web site by 20-somethings should inspire peers
-
3. Nevele Resort closes suddenly, no re-opening date announced.
-
4. IBM posts record profits, fewer jobs
-
5. Warwick’s winning formula
-
6. WKZE radio, local, independent and profitable
-
7. $700m Silo Ridge Resort advances to site plan review
News by Topic
- Advertising
- Architecture
- Arts
- Aviation
- Banking
- Colleges & Universities
- Construction
- Credit Unions
- Economic Development
- Education
- Golf
- Green
- Health Care
- Hospitality
- Hospitals
- Insurance
- Law
- Leisure
- Marketing
- Nonprofits
- Real Estate
- Restaurants & Food
- Retail
- Sales
- Schools
- Small Business
- Taxes
- Tourism
- Transportation
- Travel
0 Comments