HOUSINGNEWS REPORT
THE RETURN OF RISK: SUBPRIME SNEAKING BACK
AVERAGE DAYS TO COMPLETE FORECLOSURE
1200
1000
800
600
400
200
0
“Lenders face numerous challenges in correctly identifying a foreclosure, or foreclosure-related activity, associated with a loan applicant,” he said. “The seven-year period from the date of the actual foreclosure completion can begin six months to years after the date of first delinquency and therefore the credit report and the actual ‘completion date of the foreclosure action’ will not coincide,” he continued, referring to the seven- year waiting period that most lenders require before approving a loan for a borrower who has gone through a foreclosure. “This is the primary reason that the seven-year period calculated by the credit report may be different from the seven-year period from the date of judgment. For this reason alone, lenders should look to other data sources to ensure that they have accounted for all foreclosures associated with a borrower.”
“The seven-year period from the date of the actual foreclosure completion can begin six months to years after the date of first delinquency and therefore the credit report and the actual ‘completion date of the foreclosure action’ will not coincide. This is the primary reason that the seven-year period calculated by the credit report may be different from the seven-year period from the date of judgment. For this reason alone, lenders should look to other data sources to ensure that they have accounted for all foreclosures associated with a borrower.”
Subprime Mortgages: a Scapegoat? Writing for The Balance earlier this year, Kimberly Amadeo explained that “the subprime mortgage crisis was caused by hedge funds, banks and insurance companies. The first two created mortgage-backed securities. The insurance companies covered them with credit default swaps. Demand for mortgages led to an asset bubble in housing.” But — while it may not be popular — there is research which suggests that subprime mortgages were more victim
than cause, that they are less risky than generally thought.
“The rate of default in the subprime market throughout the bubble and the bust remained steady compared with before the crisis,” explains Vulture. “It was buyers from the top and middle top who account for the skyrocketing rate of default — and it wasn’t that they were buying bigger family homes that they couldn’t afford. It was that they were buying additional houses to flip for a profit, and when
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JULY 2018 | ATTOM DATA SOLUTIONS
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