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Rough water ahead? Home Equity Loan

Posted at 11 May 2008 22:42

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THERE has been the faint hint of optimism among some financial market observers in recent weeks, and with good reason. Borrowing costs are falling and confidence in inter-bank lending is slowly returning. After months of fearing the worst, it finally seems reasonable to temper such worry with hopes for the best. But conditions are fragile. Housing markets remain in a deep slump, which suggests that mortgage loan losses may yet increase. As long as those losses continue, the threat of an epic ..read more.

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Forbes.com's Maurna Desmond's May 8 article calls Alt-A loans "subprime in sheep's clothing". In short, crumbling housing prices will push more mortgages into default simply because even relatively affluent borrowers may not stick around once equity turns negative. The "walkaway" factor has changed the reliability of credit scoring. The FICO score has been an accurate indicator for default risk. Now, the more important default indicator may be the personal debt-to-value ratio (that FICO ..[next].

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Summary According to data from Compete's consumer panel, March rebounded from the lower traffic in February. Every product, except standard savings accounts, posted increases in the number of applications. Credit cards were the biggest gainer (up 24% in shoppers, up 13% in applications) following sharp declines the past few months. home loans market performed similarly, with double digit increases in applications for both purchase (up 15%) and refinances (up 12%). New this month, we have ..Read the rest of this post.

Keep up the good work.

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