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Mortgage Fraud Complexity "extraordinary"
Posted on 05/25/2007 05:48:17 | Link | Post Comment
Mortgage fraud is up and financing for some borrowers is down. These are among the consequences of the current "cycle of more desperate times" affecting the U.S. housing market, said Amy Crews Cutts, the deputy chief economist for mortgage giant Freddie Mac as she addressed a gathering of business journalists Monday night at the Disneyland Hotel.
Problems in the subprime mortgage industry, which provides home loans to borrowers with shaky credit, could drag out until later 2008, Cutts said at the Society of American Business Editors and Writers convention in Anaheim .
And sophisticated mortgage fraud schemes are ratcheting up, Cutts said. "It is extraordinary the level of complexity of these things."
Cutts noted that the overall housing picture -- relatively flat procing -- fails to reflect isolated pockets in places like Michigan, Ohio and Illinois where home prices are very depressed. Overall lending is falling, too. The volume of U.S. home loans is expected to drop to $2.5 trillion in 2007, down from $4 trillion, Cutts said.
But Cutts had some good news too. The meltdown in the subprime mortgage industry, which is largely based in Orange County, Ca., should be contained to this riskier segments of the loan industry. "The prime mortgage market is going to be boring," Cutts said. "There's no reason to expect the subprime market to spill over into the prime market."
Economists foresee sluggish 2007 growth the East Valley Tribune,
reports that the National Association for Business Economics predicts that the 2007 national economy will have its most sluggish growth in five years, growing only 2.2 percent. The main culprit is the sour housing market which fell into a slump after a five-year boom. Nearly half the forecasters think the market will not reach its bottom until this winter or later. Even so, the employment climate should continue to weather the fallout from the housing slump, forecasters say. They predict the unemployment rate for 2007 will match last year's rate of 4.6 percent, a six-year low. For next year, forecasters see the unemployment rate edging up to 4.8 percent, while growth is predicted to be at 2.9 percent. More than half the forecasters said that there was at least a 25 percent chance of a recession getting underway in the next year. On the inflation front, the forecasters predict consumer prices will rise by 2.5 percent this year, slightly higher than earlier forecasts due to the rising gasoline prices.
Housing Bubble and Real Estate Market Tracker from SA for 5/22
Problems in the subprime mortgage industry, which provides home loans to borrowers with shaky credit, could drag out until later 2008, Cutts said at the Society of American Business Editors and Writers convention in Anaheim .
And sophisticated mortgage fraud schemes are ratcheting up, Cutts said. "It is extraordinary the level of complexity of these things."
Cutts noted that the overall housing picture -- relatively flat procing -- fails to reflect isolated pockets in places like Michigan, Ohio and Illinois where home prices are very depressed. Overall lending is falling, too. The volume of U.S. home loans is expected to drop to $2.5 trillion in 2007, down from $4 trillion, Cutts said.
But Cutts had some good news too. The meltdown in the subprime mortgage industry, which is largely based in Orange County, Ca., should be contained to this riskier segments of the loan industry. "The prime mortgage market is going to be boring," Cutts said. "There's no reason to expect the subprime market to spill over into the prime market."
Managing Your Money to Keep The Debt Monkey Off Your Back - the WSJ, reports as more people get swept up in the borrowing binge, this is a good time to assess your finances and determine if you should cut back.
Tony Soprano Meets Subprime Lending from Seeking AlphaEconomists foresee sluggish 2007 growth the East Valley Tribune,
reports that the National Association for Business Economics predicts that the 2007 national economy will have its most sluggish growth in five years, growing only 2.2 percent. The main culprit is the sour housing market which fell into a slump after a five-year boom. Nearly half the forecasters think the market will not reach its bottom until this winter or later. Even so, the employment climate should continue to weather the fallout from the housing slump, forecasters say. They predict the unemployment rate for 2007 will match last year's rate of 4.6 percent, a six-year low. For next year, forecasters see the unemployment rate edging up to 4.8 percent, while growth is predicted to be at 2.9 percent. More than half the forecasters said that there was at least a 25 percent chance of a recession getting underway in the next year. On the inflation front, the forecasters predict consumer prices will rise by 2.5 percent this year, slightly higher than earlier forecasts due to the rising gasoline prices.
Housing Bubble and Real Estate Market Tracker from SA for 5/22
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