Hmmm... Home loans, auto loans, boat loans saw increases in late payments; mobile home loans and c.c. accts. saw levels of late pmts. go down (however slightly). I have to think about why this might be. Seems your largest assets would be the LAST thing to pay late, not your mobiles and your cards...
"Morgan Stanley said that even if the mini shake-out on world bourses since late February proves part of a normal mid-cycle correction, it is likely to entail another downward leg. "We think the bull correction is incomplete, and it could be worse than just a bull market correction," said the report.
"For a true correction to be complete, markets need to go through three distinct phases: the three C's of complacency, caution, and capitulation," it said.
The average fall of the MSCI index of European stocks over the past corrections since the mid-1980s is 19pc over 49 days, compared to 1.5pc this time in 24 days. The bank said its valuation indicator was still near an all-time high, flashing tactical sell signals. "We would rather be in cash than equities," it said.
Morgan Stanley said financial crises tend to emerge gradually with a "deteriorating news flow" over several months before investors wake up to the threat, much like the unfolding housing drama."
If I had to miss a payment on something, I wouldn't base it on how large the balance was, I would base it on the severity of the penalty for missing the payment. Credit cards can reset at almost loan shark type rates with a missed (or even a late) payment. Are the penalties for missing (or being late on) a mortgage payment as severe? I don't know. I don't own a home and am a newbie on the site, but my guess is that someone here can answer my question.
Steve, my guess is that because "indirect" loans are arranged by the party who has a vested interest in selling the car, they tend to be less carefully underwritten than "direct" loans made by the bank, who doesn't make a commission on the car sale.
Publius, it has always been historically true that people pay the mortgage first. The mortgage holder can't jack up your rate; it can throw you out in the snow. Similarly, the car lender can send the repo man. All the CC people do is up your limit and then charge you a fee for it. Plus the horrifying interest rate. But that's tomorrow's problem.
But how many late or missed payments does it take to get tossed out in the snow or have the repo man pay you a visit? If it happened immediately with the first late or missed payment then I would pay the mortgage or car loan first. If not, I would pay the minimum due on my credit card and leave the mortgage and car loans for tomorrow.
From Yal's first link to Realtor Magazine: "1.1 million active first mortgages originated in 2004 to 2006 had an initial interest rate below 2 percent. Payments on loans such as these could increase by 97 percent after the interest rate resets."
Payments increasing by 97%? Ouch. That's going to leave a mark. Yet Cagan predicts that only 32% of teaser loans will default? I'm guessing Cagan is juuuuusssst a bit low on that.
Well, Publius, some people do that, precisely because it takes a while for a foreclosure or a repossession.
The problem, of course, is that if you can't get caught up again, the penalty is sure if not necessarily swift. Even so, the late fee on a mortgage payment isn't cheap--it's usually 5% of the payment.
For most people it's just too hard to get caught up on the mortgage payment. Traditional prime lenders will not make a new loan or refi someone with a single 30-day late mortgage payment in the last 12 months. It takes that long to "season" a mortgage delinquency because such a high percentage of them do not recover and turn into 60-day or worse.
Gotta make sure the mobile home is paid for so that it won't be repossed before you are booted out out of your house, otherwise where are you gonna live?
late payments on home equity loans rose to 1.92 percent in the October-December period. That was up sharply from 1.79 percent in the prior quarter and the highest since the first quarter of 2006. . . ."
Seems pretty mixed on the whole. Not much cause for alarm.
Hmmm... Home loans, auto loans, boat loans saw increases in late payments; mobile home loans and c.c. accts. saw levels of late pmts. go down (however slightly). I have to think about why this might be. Seems your largest assets would be the LAST thing to pay late, not your mobiles and your cards...
Some auto loans. I'm not sure why the "indirect" ones would shoot up but other ones wouldn't.
Mobile home loans are traditionally harder to get- that doublewide is mobile after all, and the buyers were always credit challenged.
As for credit cards- 4.56 percent past due is nothing great to sneeze at either- one card in 22 in nonperformace is a lot of potential losses.
Kinda means that credit might need to be limited to more legitimate users? Instead of one for everybody?
back from the business trip and interested to see the new data!
US housing slump may trigger crisis, warns Morgan Stanley financial crisis - Telegraph
"Morgan Stanley said that even if the mini shake-out on world bourses since late February proves part of a normal mid-cycle correction, it is likely to entail another downward leg. "We think the bull correction is incomplete, and it could be worse than just a bull market correction," said the report.
"For a true correction to be complete, markets need to go through three distinct phases: the three C's of complacency, caution, and capitulation," it said.
The average fall of the MSCI index of European stocks over the past corrections since the mid-1980s is 19pc over 49 days, compared to 1.5pc this time in 24 days. The bank said its valuation indicator was still near an all-time high, flashing tactical sell signals. "We would rather be in cash than equities," it said.
Morgan Stanley said financial crises tend to emerge gradually with a "deteriorating news flow" over several months before investors wake up to the threat, much like the unfolding housing drama."
Does it really take three months to gather this information? Get on the ball, ABA!
Stern's speech today
Look who is now telling the truth:
http://www.realtor.org/rmodaily.nsf/pages/News2007032902
Yal,
That just seems like a recap of Cagen's study from a few weeks ago.
...covered here.
Outsider,
If I had to miss a payment on something, I wouldn't base it on how large the balance was, I would base it on the severity of the penalty for missing the payment. Credit cards can reset at almost loan shark type rates with a missed (or even a late) payment. Are the penalties for missing (or being late on) a mortgage payment as severe? I don't know. I don't own a home and am a newbie on the site, but my guess is that someone here can answer my question.
Steve, my guess is that because "indirect" loans are arranged by the party who has a vested interest in selling the car, they tend to be less carefully underwritten than "direct" loans made by the bank, who doesn't make a commission on the car sale.
Publius, it has always been historically true that people pay the mortgage first. The mortgage holder can't jack up your rate; it can throw you out in the snow. Similarly, the car lender can send the repo man. All the CC people do is up your limit and then charge you a fee for it. Plus the horrifying interest rate. But that's tomorrow's problem.
That makes sense, Tanta.
Some interesting presentations and readings on the housing / mortgage industry may be found in the upper right box of the attached link.
AEI - Mortgage Credit and Subprime Lending: Implications of a Deflating Bubble
Tanta,
But how many late or missed payments does it take to get tossed out in the snow or have the repo man pay you a visit? If it happened immediately with the first late or missed payment then I would pay the mortgage or car loan first. If not, I would pay the minimum due on my credit card and leave the mortgage and car loans for tomorrow.
From Yal's first link to Realtor Magazine: "1.1 million active first mortgages originated in 2004 to 2006 had an initial interest rate below 2 percent. Payments on loans such as these could increase by 97 percent after the interest rate resets."
Payments increasing by 97%? Ouch. That's going to leave a mark. Yet Cagan predicts that only 32% of teaser loans will default? I'm guessing Cagan is juuuuusssst a bit low on that.
Well, Publius, some people do that, precisely because it takes a while for a foreclosure or a repossession.
The problem, of course, is that if you can't get caught up again, the penalty is sure if not necessarily swift. Even so, the late fee on a mortgage payment isn't cheap--it's usually 5% of the payment.
For most people it's just too hard to get caught up on the mortgage payment. Traditional prime lenders will not make a new loan or refi someone with a single 30-day late mortgage payment in the last 12 months. It takes that long to "season" a mortgage delinquency because such a high percentage of them do not recover and turn into 60-day or worse.
BOT2, thanks for the link, by far most of the presentations are pretty bland/biased bear looted off various websites type stuff.... BUT
http://www.aei.org/docLib/20070327_ZimmermanPresentation.pdf
was DYN-O-MITE
p. 10-11 charts were even more informative than Ivy Zelmans report.
p. 18- "OMG"
p.27 - interesting
Everyone take a look, good stuff! Data-tastic!
Gotta make sure the mobile home is paid for so that it won't be repossed before you are booted out out of your house, otherwise where are you gonna live?
Thanks, Cal!
Expect all these numbers to go up as borrowers lose ability to transfer balances to new acct's. with teaser rates.
late payments on home equity loans rose to 1.92 percent in the October-December period. That was up sharply from 1.79 percent in the prior quarter and the highest since the first quarter of 2006. . . ."
why does this not scare me?