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SUNDAY, JULY 5, 2009

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Home-Equity Loans Latest to Bite Banks

(Newser Summary) – Home-equity loan defaults are soaring, the Wall Street Journal reports, as the trickle-down effect of the subprime mortgage crisis makes its way into what was once a source of big profits for lenders. JP Morgan Chase and Wells Fargo both escaped major writedowns on subprime mortgages gone bad, but already are feeling the pain from home-equity losses.

Analysts say problems will continue through 2008, prompting banks to tighten credit further. JP Morgan said it expects home-equity-related losses to increase by 81% from the fourth quarter of 2007 to the first quarter of '08, to $450 million, adding that losses could double by year’s end. Washington Mutual, National City, and SunTrust are among other lenders facing home-equity woes.
Source: Wall Street Journal

More about:  subprime crisis • housing crisis • JPMorgan Chase • Bear Stearns • Wells Fargo • Washington Mutual • SunTrust Banks • National City

A foreclosure sign is seen atop a sale sign for a...
A foreclosure sign is seen atop a sale sign for a house in Stockton, Calif., Saturday, Dec. 1, 2007. Home foreclosures soared to an all-time high in the final quarter of last year and are likely to keep...   (Associated Press)
Homes stack up on a hillside in San Francisco, Thursday,...
Homes stack up on a hillside in San Francisco, Thursday, March 6, 2008. Americans percentage on equity in their home fell below 50 percent for the first time since 1945, and now banks are saying delinquencies...   (Associated Press)
A yellow water shutoff notice is posted on a railing...
A yellow water shutoff notice is posted on a railing to this Minneapolis home Thursday, March 6, 2008. The house was sold in foreclosure earlier in the day. Home foreclosures soared to an all-time high...   (Associated Press)
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A Believer in Hands-Off
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glossies

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PREMIUM NEWS ARCHIVE

HOME EQUITY ADVANTAGE: ALWAYS DARKEST BEFORE DAWN.(Real Estate Guide) (The Santa Fe New Mexican (Santa Fe, NM))

Challenge to use home as equity. (The Morning Bulletin (Rockhampton, Australia))

HOME EQUITY ADVANTAGE: THE PROTOCOL OF FORECLOSURE.(Real Estate Guide) (The Santa Fe New Mexican (Santa Fe, NM))

NEGATIVE EQUITY THREAT TO 3M HOMES. (The Daily Mail (London, England))

Lawmakers Question Private-Equity Impact On Nursing Homes (The Washington Post)

More Calls for Subprime Rules.(Home Ownership and Equity Protection Act of... (American Banker)

Seeking home equity Rockies end trip with thud Coors stretch is pivotal.(Sports) (Rocky Mountain News (Denver, CO))

Home Equity Delinquencies Increase. (Mortgage Servicing News)

Americans Are Hooked On Home Equity Loans/Lines; One in four homeowners have... (Gallup Poll News Service)

Reverse Mortgages Gaining Ground.(Government National Mortgage launched Home... (Origination News)