2010 Will Look Four Times Worse Than 2009, AT LEAST!!

By Daniel at 22 October, 2009, 9:29 am

In 2009 17 billion in alt-a residential mortgages reset.

In 2010 and 2011, 67 billion in alt-a a residential mortages reset, FOUR TIMES the current number.

What does that spell with unemployment chugging right along? I bet all those people losing their jobs will be able to pay their higher resetting rates on homes they already can’t afford right? Yes…There are people sitting in houses having not made their mortgage payments in over a year. Banks ofcourse don’t care because if they foreclose on these properties they would have to write that loss down on their balance sheet…and heaven knows banks can’t lose

The Banks are borrowing at near 0% from the Fed to buy U.S treausuries yielding 2-3% which is pretty much fraud seeing as they are supposed to be lending that money to jump start the economy (which they can’t because for all intents and purposes they are already insolvent [minues the accounting frauds behind the accounting rule changes regarding FASB 157])

The Federal Reserve has already purchased over $1 trillion (the full amount is not disclosed) of mortgage securities from banks. Freddie Mac and Fannie Mae which are both bankrupt hold in excess of $8 trillion in securitized and guaranteed mortgages. We are dealing with a problem in the TRILLIONS not billions of dollars with mortgages failing and the losses already are humongous and will be getting much worse.

Foreclosures are presently running at a rate of around 4 million a year in the US. Around 67% of all residential properties have mortgages. Around 33% of residential properties are paid off in full. The problem comes from the fact that a relatively large portion of the 67% of mortgages are either recent mortgages or mortgages that have been refinanced with “equity withdrawals” and with the declining prices of houses there is insufficient collateral on as much as 70% of all mortgages outstanding.

- OutAndIn