Sub-Prime Market Collapse - Effect on Mortgages & Housing Market
Over-extended hedge funds in the sub prime sector have suffered massive losses. Major sub-prime player Bear Stearns gets hammered by the market collapse which forces co-president Warren Spector to resign. Homeowner foreclosures are skyrocketing on higher ARM mortgage payments, as lenders tighten the noose on available credit.
In many areas of the country, housing prices are falling. And now, American Home Mortgage Investment has become the 2nd biggest residential lender to close down this year. It's being called the worst housing market in 25 years. The following video gives analysis and insight on what's already happened and the outlook ahead.
Analysis and Discussion with Ellen Bitton of Park Avenue Mortgage Group: Foreclosure Cycle is Next Cycle in Housing Downturn; Wall Street Loans to Lenders Contributed to Problems; Imprudent Lending in Mortgage Market for Past 5 Years; Mortgage Business Run by Those Who Never Saw Downturn; Investment Banks are First to Leave Mortgage Market