said by That L.A. Times article :

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He recently went to do an eviction at a gated community in Chino Hills. The foreclosed owner, not realizing he was out of time and luck, was still trying to sell the place.

As soon as he noticed Strickland, he jumped in his car and drove off, leaving a prospective buyer bewildered at the curb.

He stops to post an eviction warning in a neighborhood where many houses fetch the high six figures.

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said by Mass Foreclosures in nicer neighborhoods. L.A. Times 5/6/07--> »www.latimes.com/business/la-fi-e···eadlines :

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snippets:
Better-heeled failing home economics too
As more owners are unable to make higher payments, Deputy Strickland finds himself evicting people in nicer neighborhoods.

The deputy spends most of his days at down-market apartment complexes, where the destitute, the addicted and the forlorn fitfully live. But in recent months he has begun venturing into neighborhoods with spacious homes and groomed yards, bringing his legal warnings to those who have fallen hopelessly behind on their mortgages.

These people typically bought a home they couldn't afford or drained their equity through incessant refinancing. If they had a chance to sell, they passed it up.

A couple of years ago, a foreclosed man in Rialto shot himself when Strickland [Deputy Sheriff] showed up.

Indeed, defaults and foreclosures are rising nationwide as subprime loans with low introductory rates adjust higher and homeowners struggle with payments.

The trend is especially apparent in such areas as the Inland Empire, where tracts of new homes drew first-time buyers, who are especially vulnerable to foreclosure because they often have little equity.

In the first three months of the year, San Bernardino County recorded 909 foreclosures, according to research firm DataQuick Information Systems. That's double the number in the last quarter of 2006.

"A lot of people live over their means," Strickland says. "One little thing goes wrong, they're in a world of hurt."

He located the foreclosed house, which appeared to be at least 4,000 square feet.

A Perris family, which hadn't made a mortgage payment since March 2006, proved particularly intractable. Perkins heard a different explanation each time she stopped by to remind them that they no longer owned the house and had to move.

"The husband had an accident, the husband was hurt, the husband has a bad heart, this is going to kill him, then the daughter had an accident," she recounts.

"You're going to have to leave in a week," he said. When she finally understood, her breathing became labored, as if she had gone into shock.

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said by Kibbles :

The mortgage company I am dealing with talked to the investor and he thinks the housing prices in this area have stopped dropping..that is why I can still get a 70-80% LTV loan.

said by (From today's AP wire) - Housing slump slows U.S. economy--> »www.pantagraph.com/articles/2007···6428.txt :

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WASHINGTON, D.C. — The worst economic growth in four years is raising concern that troubles in the U.S. housing market will spread and throw the country into a recession before the year is out.

The economy practically crawled at a 1.3 percent pace in the opening quarter of 2007, the Commerce Department reported Friday. That was even weaker than the sluggish 2.5 percent rate in the closing quarter of last year.

The main culprit in the slowdown: the housing slump...
The reading on gross domestic product in the first quarter was the weakest since a 1.2 percent pace in the opening quarter of 2003. The performance was even weaker than the 1.8 percent economists had forecast.

The biggest factor behind the first quarter slowdown was the crumbling housing market.

“The report tells me housing is probably going to be in a more prolonged and deeper recession,’’ said Stuart Hoffman, chief economist at PNC Financial Services Group.

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4br/3bath 2700s.f. - never lived in - $255K

said by AP Wire: »www.signonsandiego.com/news/busi···ges.html :

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WASHINGTON – The heads of Fannie Mae and Freddie Mac said Tuesday the mortgage finance giants are developing new types of loans to help distressed borrowers with high-risk mortgages keep their homes at a time of rising foreclosures.

Many of those borrowers “could avoid foreclosure if they were offered (loans) that allow for affordable mortgage payments,” Bair testified. “Restructuring their loans into more affordable products, especially 30-year fixed-rate mortgages, would bring them back to good standing, allow them to repair their credit histories and dampen the impact that foreclosures may have on the broader housing market.”

Most importantly, Bair added, “people would be able to stay in their homes.”

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said by today's L.A. Times: »www.latimes.com/business/la-fi-f···osspromo :

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Foreclosures totaled 11,033, up 802% from the placid levels of early 2006, according to DataQuick Information Services in La Jolla. Foreclosures peaked at 15,418 in third-quarter 1996, at the tail end of the last big slowdown in the state. They bottomed out at 637 in the second quarter of 2005, as the most recent boom was cresting.

Tens of thousands of homeowners are being warned that they too are at risk. Notices of default, sent by lenders after about five months of missed payments, reached 46,760 in the first quarter, DataQuick said.

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From today's L.A. times, just the beginning

said by selected snippets from: »news.yahoo.com/s/ap/20070411/ap_···ing_woes :

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The call for federal involvement from New York Democrat Charles Schumer, chairman of the Joint Economic Committee, came on the same day the National Association of Realtors forecast that the median price for existing homes will decline for the first time since 1968 as a sales slump worsens.

"We will be proposing significant amounts of dollars," Schumer told reporters after being asked if a large federal bailout may be needed.
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"We've heard one heartbreaking story after another of borrowers with limited incomes being sold mortgages they could not afford," Sen. Sherrod Brown, D-Ohio, said at a briefing on Capitol Hill.
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Activist and community groups are stepping up efforts to aid homeowners affected by the housing market's woes. They argue that banks and mortgage brokers_not borrowers_bear most of the blame for the industry's problems.
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Sen. Christopher Dodd, D-Conn, said he would call for a summit on Capitol Hill soon "to try to work out a process for providing relief to homeowners."

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said by Holy Sheep Shit Batman :

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Accredited (Nasdaq:LEND - news), based in San Diego, said it needed to raise money after paying $190 million demanded by its lenders, is cutting an unspecified number of jobs, and is exploring "strategic options," including raising new capital.

Irvine, California-based New Century (Other OTC:NEWC - news), meanwhile, had trading in its shares suspended by the
New York Stock Exchange prior to delisting and received a grand jury subpoena in a federal criminal probe. On Monday, the real estate investment trust had said it did not have enough cash to repay its own lenders.

Edit: Looks like this is taking down GMAC as well:
DETROIT (Reuters) - General Motors Acceptance Corp., the former finance arm of General Motors Corp. (NYSE:GM - news), on Tuesday said it would receive another $1 billion from GM and warned it would be hit by pressure from a weakening market for U.S. mortgages.

GMAC said GM would transfer about $1 billion to the finance company in the form of common equity by the end of the first quarter to shore up its balance sheet under the terms of its sale to a group led by Cerberus Capital Management.

Feldstein said GMAC was tightening its underwriting standards for mortgages to borrowers with weaker credit and taking more aggressive steps to address delinquent loans.

Problems in the subprime mortgage sector, which involves loans to riskier borrowers, have emerged as a major risk factor for the U.S. financial markets in recent weeks.

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Alt-A Mortgage Losses Accelerate, Threatening MBS - Study

Mar 13, 2007 14:43:33 (ET)

Losses on so-called Alt-A home loans are accelerating and could hit the value of lower-rated portions of some mortgage-backed securities, according to a study released Tuesday.

Alt-A loans are considered less risky than subprime mortgages, but usually have lower credit quality than "prime" loans. Companies such as IndyMac Bancorp Inc. (NDE), Impac Mortgage Holdings Inc. (IMH) and Countrywide Financial Corp. (CFC) offer them.

Delinquencies have jumped on Alt-A mortgages originated last year with adjustable interest rates that let borrowers pay only the interest for a time.

These loans, known as Alt-A ARM IOs, have seen a fourfold increase in delinquencies of at least 60 days, four times the level of similar loans originated in 2003 and 2004, according to the study by David Liu, head of mortgage credit research at UBS, and LoanPerformance, a division of real estate data firm First American.

This "alarming" deterioration could have dire consequences for some investors in the BBB- rated parts of mortgage-backed securities (MBS) that contain these types of loans, but the market hasn't priced these risks in yet, Liu warned.

Losses "could potentially wipe out most of the credit support on BBB- rated bonds backed by Alt-A hybrids," Liu wrote. "And yet we have not seen any spread movements that suggest investors are taking this into consideration."

Liu's study, which used LoanPerformance data from the end of January, is based on the housing market remaining relatively flat over the next few years.

"If house prices fall over the next few years, everything in this scenario will be much worst," he said in an interview.

Alt-A loans were originally designed for borrowers with clean credit records, but with other issues that often meant they provided fewer documents or even no documents showing what they earned. These loans were attractive to investors in mortgage-backed securities because they offered higher yields than traditional "prime" home loans, but were underpinned by the cleaner credit records of the borrowers.

The popularity of Alt-A mortgages exploded in recent years. A record $400 billion of these loans were originated in 2006. They accounted for 13.4% of all mortgages offered last year, up from 2.1% in 2003, according to industry publisher Inside Mortgage Finance.

But as the Alt-A business grew, more of these loans were offered to less creditworthy borrowers and the products became more exotic.

"The Alt-A sector is the poster child for the past decade's tremendous growth and drastic evolution in the mortgage market," Liu wrote in the LoanPerformance study.

Alt-A ARM IO loans have "taken the leading role within continuously expanding borrower leverage in the runaway housing market," he added.

Three quarters of all Alt-A loans originated in 2006 were innovative mortgages such as interest-only loans and option ARMs, he noted.

As ARM IO mortgages took over as one of the dominant ARM products, the performance of these loans deteriorated rapidly, Liu said.

The main reason is that the housing market is much weaker than it was a few years ago and interest rates are much higher, Liu explained. "On top of that, underwriting standards were looser recently," he added.

The deterioration is "alarming" for investors in lower-rated bonds that are backed by these loans, Liu said.

Mortgage loans are usually packaged together and sold as mortgage-backed securities to institutions such as pension funds, insurers and hedge funds.

They are sliced up into different sections, known as tranches. Higher quality tranches pay lower interest rates, but are less likely to experience losses. Lower-rated slices, rated BBB- and BBB, yield more, but are the first to get hit when losses occur in the underlying mortgages.

An extra chunk of cash is included in MBS - called credit support or enhancement - that protects investors against a certain level of losses.

Liu's study suggests that losses in Alt-A ARM IO mortgages could wipe out the credit support on BBB- rated tranches of some MBS.

"There is a 34% probability that the entire BBB- tranche might get wiped out," he wrote. "Similarly, there is a 17% probability that cumulative losses reach 300 basis points, which could make BBB bonds appear on the endangered species list."

If the housing market remains flat or turns negative for a prolonged period, losses could rise further, "which will wipe out credit support of BBB bonds on these deals," he added.

If credit support on these tranches is erased, investors would still have access to the income. But Liu warned that they would likely be downgraded by credit rating agencies anyway, cutting their value.

There are a lot of moving parts in these projections, Liu said, noting that the analysis is "relatively crude."

"Even so, we believe our results are very powerful and are not currently reflected in the market," he concluded.

-By Alistair Barr; 415-439-6400; AskNewswires@dowjones.com

quote:

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New, 9 a.m.: Research group sees economic growth continuing; hopes are up that the housing market is climbing out of severe slump.
By The Associated Press

NEW YORK - Consumer confidence rose to its highest level in five-and-a-half years amid optimism that the nation's economy is creating enough jobs, a private research group said today.

The New York-based Conference Board said that its Consumer Confidence Index rose to 112.5, up from a revised 110.2 in January. Analysts had expected the reading to be 109.

The February index was the highest since August 2001, when the reading was 114, indicating that consumers will continue to fuel the nation's economic growth in the near future.

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said by USA TODAY :

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WASHINGTON (AP) — Mortgage finance company Freddie Mac (FRE) will no longer buy subprime mortgages that have a "high likelihood" of payment shock and foreclosure, a surprise move that came amid a deteriorating market for subprime loans affected by slumping home prices and rising interest rates, the company announced Tuesday.

The median price of an existing home sold in January dropped to $210,600, a decline of 3.1% from a year ago. It marked the sixth straight month that the median price has been down compared with a year ago. The January decline was the third-biggest drop in history.

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