Adverse credit loans are still affecting the housing market and it appears as though the problems are going to continue. Foreclosure rates are up on adverse credit loans and homeowners are struggling to keep making their payments. Although many had hoped that the problems with the adverse credit loan sector would be over, it appears as though the end is not in sight. Current estimates put the recovery time closer to one to two years, if not longer, unless something is done to aid homeowners.
“The housing market shows no signs of stabilising and the problems will spread to other areas, including non-residential construction and consumer spending,” Mr John Paulson, a hedge fund manager said. “For the last four months prices have been depreciating and the decline is accelerating. Ninety per cent of the mortgage market is supported by two private companies losing vast sums of money operating with no equity.”
“The increase in mortgage rates is decidedly negative for the housing outlook,” Michelle Meyer, an economist at Lehman Brothers in New York, said in a research note. “Higher rates strain affordability, suggesting home prices may have to fall further to provide an offset.”
Related reading: Adverse Credit Loan
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