It's Official! Prime NODs surpass Subprime NODs
As we have been saying all along, The mortgage mess is not just subprime. It is now being reported that the delinquency rate for PRIME mortgages has now surpassed SUBPRIME mortgages. This was bound to happen, if you have been paying attention to the infamous Monthly Mortgage Rate Reset Chart by Credit Suisse. Prime mortgages resets spike from here on out, until mid 2010 and then barely taper off until mid 2012. That makes those 5/1 ARMs that were sold in 2004 - 2007 come due now. With prices still free-falling in many places and homeowners upside down with no equity, they will be unable to refinance. And just how many of those 5/1 ARMs are on the Westside? A ton. Just think back to 2004 and 2005, when the bubble was at it's peak, and flipping a house meant a 6 figure gain.
The proverbial #$%&^*@! starts to really hit the fan on the Westside.
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2 comments:
Finally! - I've been waiting for the Westside shoes to start dropping on their tremendously overpriced homes.
Sorry, but people are going to lose their shirts over bad "investments" - i.e. any property bought there since 1999.
Rents are alrady coming down, since so many places are trying to rent, and no one is buying the outrageously priced homes.
I don't have schadenfreude (sp?) but I can't believe people think a wooden box that rots is a good investment.
CNN Money thinks LA/Westside will bottom around/after mid 2010. Still 12-15 months to go.
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