Are Mortgage Losses Near an End?

Are we near an end to the massive losses in the mortgage world? If any of you caught "60 Minutes" this past Sunday, you already know the answer. The answer is a resounding NO. I hate to say it, but I have wondered if this was the case. As a mortgage broker we know full well what products were being offered by lenders. Some were ultra aggressive and downright stupid. They were destined for failure. This is why we very rarely did subprime loans and never once marketed or closed a Pay Option ARM! Our clientele did not fit these products anyway, but it didn't take a rocket scientist to know these products were bad for borrowers. Fortunately our area was not hit as hard as others. Areas like California, Florida, Las Vegas, etc.. were playgrounds for risky loans like this and this is evident in what is taking place there. Numerous foreclosures are overtaking those markets!
The "60 Minutes" piece was a good one and I have included the link below. The gist of the article centers around how this 1st wave of defaults (Subprime) is nearing its end. This amounted to about $1 Trillion! Instead of the end that most people hoped, we are now predicted to enter a 2nd wave! This is the ALT-A and Pay Option ARM phase. This wave totals more than the 1st, around $1.6 Trillion! Pretty scary. This pool of toxic mortgages are expected to default at an astounding rate of 70%! If that happens, we are in for a few more years of this mess! Luckily this really won't hit Columbia or Missouri too much. We are mainly talking about these major firms and the national market. Unfortunately it ultimately comes back to affect us in some form or fashion. With all the Government is doing, lets just hope something can be done to help fight off this problem before it take full effect!

http://www.cbsnews.com/stories/2008/12/12/60minutes/main4666112.shtml

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