If folks can't get a mortgage b/c of the sub-prime situation, where will they live?

Question

People losing their homes, can't get a mortgage, housing market falls, but where will people live? What about first time homebuyers? Will this lead to more house rentals?

Answer 1

I've always enjoyed junk bond mutual funds and someone will pony up the money to provide mortgages for the high-risk people ONLY if the housing market corrects itself another 50% such that the $500K McMansion is worth $250K.

In Frederick County, MD - I've seen 15-20% declines in housing prices from the same time last year. A $600K house last year would be lucky to receive $525K today.

Answer 2

No, no individual suggested they were all sub-best. in spite of the undeniable fact that it replaced into the contortion of the market by ability of the federal authorities imposition of needed sub-best loans, and the hollow of Fannie Mae and Freddie Mac to purchase tremendous parts of sub-best loans that all started this finished ball rolling. once you eliminate the potential to pay from the granting of a private loan, that utilized by the board. And in states with severe housing call for, those housing expenditures soared previous the shoppers' potential to pay, or the resources used for collateral were themselves overpriced housing. at the same time as the housing bubble collapsed, that brought about a lot of mortgages to be more beneficial than the homestead replaced into worth. as a outcome basically walking faraway from the resources replaced right into a more beneficial financially sound action than to proceed possession or promote at a mandatory loss, the position the owner may ought to make up the version on the non-public loan. without the initial distortion of the market by ability of the authorities, those monetary contraptions and questionable mortgages would not are starting to be so everyday, in the journey that they befell in any respect. that's the ripple outcome from the initial distortions brought about by ability of authorities intrusion. there's a lesson to be discovered right here. Will that's left out? seems likely.

Answer 3

We lost our home because of a drug addicted son -- me having breast cancer -- we also lost more BECAUSE of losing the house which caused more problems. We have no credit we can use. We rent. The scary part is a lot of the rental complexes are EXTREMELY expensive AND a lot are turning into condos which need to be bought. We'll never own again. It's called being afraid all the time. I'm a grandmother -- not a young person who has a long long time to fix all the bad things that happened. I'm not OLD either though.

Answer 4

Some mortgage company, somewhere, will offer a high-risk mortgage for most of these people. The interest rate and points will be higher than people with better credit, but that's what those mortgage companies do to mitigate the risk of the bad credit.

These people with bad credit won't be able to buy a large fancy house, but they can get into 'something' -- a place to live.

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Answer 5

People aren't losing their homes because of the sub-prime market. The sub-prime market is failing because people aren't paying their mortgage. They will rent.

Answer 6

Where will they live? Houses don't vanish into thin air when their owners get foreclosed on. Maybe they will rent the house from whomever buys it from the bank. Or they'll rent somewhere else.