Subprime Market Slowly Collapsing

Salt Lake City, UT -- Like a dormant volcano that suddenly spews ash and lava the loosely regulated sub-prime mortgage market is a sleepy giant no more. Late last week the U.S. sub-prime lending market which has been forecasted by some as in recovery stages proved once more that the depth and scope of damage caused by sub-prime lending has yet to be truly realized.

Joe Astornia, director of the securitization research at Barclays Capital, said "People are really trying to digest last week's news and there was certainly plenty of it to go around, whether it was the Mortgage Bankers' Association data or the Moody's downgrades."

MBA's data last week showed that a record number of borrowers were set to lose their the homes to foreclosure while delinquency rates for sub-prime home loans roared from 11.5 per cent to 13.8 percent.

In a further drift from main stream thinking, this past Friday, rating agency Moody's cut the ratings of 131 bonds backed by sub-prime home loans stating reasons such as high levels of defaults and late payments on underlying mortgages. In addition to the downgrades Moody's has already made, the ratings agency is currently reviewing 247 bonds including 111 of the bonds it had just downgraded.

The negative headlines of Moody's sub-prime mortgage-backed bonds downgrade rifled through the markets as the ABX derivative index, which tracks sub=prime bonds rated BBB- and issued in 2006, to a record low of 60.95 on Friday. The index at the beginning of the year was above 97.

The impact from market news forced hedge fund managers at Bear Stearns to hold crisis talks with creditors yesterday to keep one of their hedge funds afloat as hedge fund investors demanded their money back amid fears that the fund could struggle to meet margin calls from lenders.

"Without market transparency, investors of mortgage backed securities will across the board continue to pay the price for escalating fraud within the housing sector," says Sheri Fitzpatrick, CEO of Perfect Home Living. "As our organization is called upon more and more to address these issues and provide real time solutions to the problems that real estate fraud causes, investors have to realize that bad loans continue to make their way into their portfolios and without addressing the issues, market collapse concerns will continue rise."

Perfect Home Living is a nationally recognized leader that assists in implementing programs and providing training to financial lenders as well as educating consumers and licensed professionals to red flags within today's real estate market. For more information or to request assistance please email: businessdevelopment@perfecthomeliving.com

Perfect Home Living INC
1905 West 4700 South #353
Salt Lake City, UT 84118
Tel: 801.502.2508
Fax: 801.528.3321
Email: Media@PerfectHomeLiving.com

This release was published on openPR.