skeptic - 28 February 2007 06:06 AM
From Bloomberg:
Kenneth Heebner, the manager of the top performing real estate fund over the past 10 years, said the economic damage from high-risk mortgage defaults is only going to get worse.
``We have a trillion dollars of subprime mortgages and we’re going to have huge defaults,‘’ Heebner, 66, said in a telephone interview today from his office in Boston. ``If you’re looking at the housing market, it’s not the darkest before dawn, it’s the darkest before pitch black,‘’ Heebner said.
Heebner, cofounder of Capital Growth Management LP, said the market for subprime loans could ``shut down’‘ as U.S. mortgage companies including Freddie Mac stop buying them. Delinquencies and defaults are the highest in at least seven years, according to a Feb. 22 report by Barclays Capital.
SUMMARY:
FREDDIE AND FANNIE REFUSE TO BUY CERTAIN SUBPRIME LOANS = LESS AVAILABLE CREDIT = LESS PEOPLE CAN AFFORD TO BUY = LESS DEMAND = LOWER PRICES
FREDDIE AND FANNIE REFUSE TO BUY CERTAIN SUBPRIME LOANS = LESS AVAILABLE CREDIT = LESS PEOPLE CAN AFFORD TO REFI WHEN THEIR ARM RESETS = HUGE DEFAULTS = MORE SUPPLY = LOWER PRICES
hehehe bumping for history
