Is This Really A Big Surprise To Anyone?

This article should not come as a surprise to anyone who is awake. We have also seen recently that anyone who wants to borrow Jumbo Money (over $417,000) is going to get MUCH higher rates (.50-.875 higher than last month) than ever before because of the higher risk involved with these types of mortgages. Many changes are going on in the mortgage business and will greatly affect future borrowers and their ability to even purchase a home.
Kimberly in The Morning:While the collapse of American Home Mortgage may come as a surprise to the New York Times author who wrote the article below, this author on this website has foreseen its coming and that of many other mortgage companies for a long time in its postings. AHM financed speculators and more than 1/3 of its portfolio was made up of loans wherein borrowers could not only not pay down principal, but had the option of not even paying out the full interest rate and allowing the balance to accumulate in principal. The "flippers" counted on ever rising real estate prices fueled in 2004, 2005 and 2006 by easy credit for first time homebuyers, speculators like themselves artificially bidding up prices of real estate, plus scarcity of housing after the hurricanes. Now, credit is tightened, first time homebuyers can't meet their mortgage payments because of increased real estate taxes/home insurance price increases/ARM's adjusting, the speculators have gone home, and the demand for housing has all but dried up as potential purchasers postpone purchases in a declining market waiting for a better deal. More of these to come.....plus...don't forget about the ripple effect in the bond market, equity market, hedge funds, mortgage backed securities markets. Stay tuned in for the ride......Kimberly www.rateinformer.com