Barclays Issues Warning on ‘Underwater’ Borrowers

[notesdev]

None other than Barclays Capital warned Tuesday that roughly half of all subprime and Alt-A borrowers in the U.S. could soon owe more than their house is worth, or have extremely minimal equity left — a problem that is imperiling more homeowners in the States than mortgage rate resets, which have received far greater press coverage.

Continued price declines are likely to put as much as $800 billion worth of debt at risk,...


the rest of the story:

http://www.housingwire.com/2008/04/29/barclays-issues-warning-on-underwater-borrowers/

[dipsydoodle]

1. Aka

Negative equity. Historically that takes about 5 years a lot of grief to resolve itself.

[notesdev]

2. You'd think

that with so much concern over the economy, news of the probable destruction of a half trillion dollars or more in capital would generate some interest.

[Old Codger]

3. but

It is mostly on paper, no actual cash loss involved. Used to be you bought a home you paid about 20% down and you had to live in that home for about 5 years to break even equity wise. Greed,that is what fueled the current housing crises plain and simple. People need this lesson every now and then "There Ain't no Such Thing As a FREE Lunch".:nopity:

that with so much concern over the economy, news of the probable destruction of a half trillion dollars or more in capital would generate some interest.

[notesdev]

4. The problem is

that the solvency of the entire financial system is mostly on paper as well, thanks to the "innovation" of fiat currency.

[Warpy]

6. When a catastrophe happens one person at a time

or even one family at a time, nobody notices. Look at the health care disaster, something that is literally killing us. One at a time. Who cares?

Now if every one of these families walked away from their debt on the same day, the banks would collapse and that would get noticed very quickly.

[leftofthedial]

5. RIP middle class

oligarchs win

FDR (and 98% of America) loses

[dixiegrrrrl]

7. You what Countrywide is doing ***Right Now***????

Allow me to quote from a mailing I got from them today
( usually we get about 2 a month)..

they are offering us a home equity loan
no paperwork to sign
no forms to fill out
no income verification
low low low rates if we act now !!!!!
Just call this number......blah blah blah
if we act Now !!!! we can have a check in "just" 3 days.

Yep, in the middle of the meltdown,
in the middle of being bought out,
they are continuing to push sub prime loans.

Who on earth do I report this to?

Ps..I am sooo steamed about this.

[DemocratInSoCal]

8. Call The Number

Tell them that they're FUCKING CORRUPT MORONS, and their company DESERVES to go Belly Up.

Tell them Not to contact you EVER again, that you don't want their No-Income Loans, and do not wish to be a part of the infection which will bring about the financial collapse of this country, if not the world.