Yes, mortgage lenders have been reporting losses lately. We’ve been regaled with stories of billions in losses, and their effect on the economy. In the main, these losses have a lot to do with the subprime lending crash. But even with all of the losses that have been reported, there are some subprime losses that mortgage lenders are hushing up. Indeed, Bloomberg reports that there are still unreported losses that have yet to make it through the financial system:

“The smart people are the ones who’ve identified the problems, put them out there in full transparency, and addressed them by raising more capital,” said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. “There is still billions of dollars of crap out there that hasn’t worked itself through the system. Banks need more capital to work that all out.”

The lack of transparency that partially contributed to our current mess continues.

Credit crisis may not really be coming to an end

Additionally, the fact that these losses have not worked themselves through the financial system are likely to contribute to another problem: The credit crisis may last through 2009.

When talking about the economy, and trying to boost the US dollar on the currency market, or trying to inject confidence into the stock market, many officials have talked about the end being near for the credit crisis, and about how the US will likely avoid a recession.

But will it? If there are still untold millions — or even billions — in losses that still need to be addressed, how can an end be near? After all, mortgage lenders and others are citing a lack of capital. And if there isn’t capital available for lending, how will the credit crisis end any time soon?

Tags: credit crisis, subprime losses, home mortgage loan, mortgage loan blog,
mortgage lenders, stock market, US recession

Yes, mortgage lenders have been reporting losses lately. We’ve been regaled with stories of billions in losses, and their effect on the economy. In the main, these losses have a lot to do with the subprime lending crash. But even with all of the losses that have been reported, there are some subprime losses that mortgage lenders are hushing up. Indeed, Bloomberg reports that there are still unreported losses that have yet to make it through the financial system:

“The smart people are the ones who’ve identified the problems, put them out there in full transparency, and addressed them by raising more capital,” said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. “There is still billions of dollars of crap out there that hasn’t worked itself through the system. Banks need more capital to work that all out.”

The lack of transparency that partially contributed to our current mess continues.

Credit crisis may not really be coming to an end

Additionally, the fact that these losses have not worked themselves through the financial system are likely to contribute to another problem: The credit crisis may last through 2009.

When talking about the economy, and trying to boost the US dollar on the currency market, or trying to inject confidence into the stock market, many officials have talked about the end being near for the credit crisis, and about how the US will likely avoid a recession.

But will it? If there are still untold millions — or even billions — in losses that still need to be addressed, how can an end be near? After all, mortgage lenders and others are citing a lack of capital. And if there isn’t capital available for lending, how will the credit crisis end any time soon?

Tags: credit crisis, subprime losses, home mortgage loan, mortgage loan blog,
mortgage lenders, stock market, US recession

The rising foreclosures sweeping the country don’t just affect personal finances. They also take an emotional toll on homeowners. Money issues can be among the most difficult, and stress about money can spill over into other areas of life. USA Today reports on on some of the issues surrounding foreclosures:

Crisis hotlines are reporting a surge in calls from frantic homeowners. The American Psychological Association (APA) and other mental-health groups are publishing tips on how to handle the emotional stress triggered by the real estate meltdown. Psychologists say they’re seeing more drinking, domestic violence and marital problems linked to mortgage concerns — as well as children trying to cope with extreme anxiety when their families are forced to move.

“They’re depressed, anxious. It’s affected marriages, relationships,” says Richard Chaifetz, CEO of ComPsych, a Chicago-based employee-assistance firm that is counseling homeowners over mortgage fears. “People tend to catastrophize, and that leads to depression. Suicide rates go up. We see an increase in drinking, outbursts at work, violence toward kids. Before, their houses were like ATMs,” as they rose in value. “Now, they feel trapped like a rat in a corner.”

This is an interesting side effect. Marriage counselors have long pointed out that money problems are a major cause of divorce. And money problems can cause large amounts of stress. And a foreclosure is one big money problem. It’s not surprising that all of these foreclosures seem to be leading up to a national emotional health crisis.

Dealing with foreclosure can be tricky, but it is possible. However, it might be necessary for those dealing with the emotional stress of foreclosure to get some sort of counseling — marriage counseling or treatment for depression or anxiety — in addition to financial counseling.

Tags: foreclosures, mortgage loan blog, home mortgage loan, personal finances,
subprime mortgage, financial counseling, mortgage lenders