- 11,346
- Marin County
Though this is mainly aimed at the USA, I wanted to break it off from the general America thread. I read through this article about mortgage delinquencies yesterday and some of the implications, if they are correct, are quite astounding. Things are always murky when banks are involved, especially for those of us who are not experts in the realm of finance, however this passage stood out to me:
From the same author, another somewhat related topic regarding the housing inventory. Reading into this, you could easily correlate the two.
So the question is are we in another massive housing bubble where there is vast amounts of bad debt about to implode? What trigger will set it off?
Then I read this today about the Fed beginning quantitative tightening. Now forgive me for my lack of a holistic understanding of the direct correlation between the Fed tightening their balance sheet, and a lot of delinquent mortgages...but could this tightening start to pressure the banks to foreclose on delinquent mortgage holders? Could it be the start of another spiral?
Is the US Treasury holding a gargantuan amount of toxic debt?
Maybe @Danoff would be able to put some reason into this thread.
Although 359,362 cumulative pre-foreclosure notices have been sent to deadbeat borrowers in Suffolk County alone, fewer than 1,000 formal default notices have been filed each month on these properties since mid-2008....
For more than eight years, the servicers have chosen not to foreclose or even begin the process for the vast majority of delinquent owners.
From the same author, another somewhat related topic regarding the housing inventory. Reading into this, you could easily correlate the two.
It’s important to understand that the so-called recovery in U.S. housing starting in 2012 did not occur because of an improving economy and a growing demand for homes. Instead, specific actions were taken by mortgage lenders, their servicers, and the government to prop up markets because millions of homeowners were still delinquent on their mortgages and faced the threat of foreclosure. These homes owned by deadbeat borrowers, which have been intentionally kept out of foreclosure, will put tremendous downward pressure on home prices when lenders can no longer kick the can down the road.
So the question is are we in another massive housing bubble where there is vast amounts of bad debt about to implode? What trigger will set it off?
Then I read this today about the Fed beginning quantitative tightening. Now forgive me for my lack of a holistic understanding of the direct correlation between the Fed tightening their balance sheet, and a lot of delinquent mortgages...but could this tightening start to pressure the banks to foreclose on delinquent mortgage holders? Could it be the start of another spiral?
The Fed had been holding about $4.5 trillion worth of mostly Treasurys and mortgage-backed securities that it accrued during three rounds of monetary stimulus during and after the financial crisis.
Is the US Treasury holding a gargantuan amount of toxic debt?
Maybe @Danoff would be able to put some reason into this thread.