Subprime Mortgage Lenders Feeling the Pinch of Foreclosures
Subprime mortgage lenders like HSBC, Countrywide, and New Century are feeling foreclosures in their stock price. Monday, Countrywide’s price per share lost almost 5 percent. New Century lost a whopping 68 percent.
Subprime lenders are companies that specialize in home loans to people with weak credit. Last year, over 13 percent of mortgages originating in the United States were subprime. Foreclosures have been skyrocketing due to weakness in the housing market and the failure of deals like adjustable rate and interest-only mortgages.
Subprime lenders having financial difficulties may repurchase homes below their value, depressing the market and lowering home values even more. Some borrowers could be forced into bankruptcy because of the decrease in the value of their home.
so what does this mean for someone like me who has great credit and looking to buy another home in the near future? Our rate is a fixed 30yr @ 4.25%...my guess is to wait to this blows over....