Fitch Ratings forecast for California housing and US housing

[Anonymous_IHB]

<a href="http://www.marketwatch.com/story/fitch-takes-various-actions-on-543-2005-2008-us-subprime-rmbs-deals?siteid=nbkh">http://www.marketwatch.com/story/fitch-takes-various-actions-on-543-2005-2008-us-subprime-rmbs-deals?siteid=nbkh</a>

 

[no_vaseline_IHB]

<blockquote>Today's rating actions reflect Fitch's analysis of expected default and loss from the collateral pool in addition to cash flow analysis of each class. The average updated expected collateral losses as a percentage of the original pool balance for the 2005, 2006 and 2007 vintages are 17%, 39% and 47%, respectively. As a percentage of the remaining pool balances, the average expected losses for the three vintages are 45%, 59% and 55%.



The updated expected collateral losses incorporate performance trends since the last rating revisions which relied on September 2008 remittance data.<strong> The projected losses also reflect an assumption that from the first quarter of 2009, home prices will fall an additional 12.5% nationally and<em> 36% in California</em></strong>, with home prices not exhibiting stability until the second half of 2010.

</blockquote>


Whee!

 

[tmare_IHB]

<strong>However, the performance to date of modified loans continues to raise concerns about the sustainability of the modifications due possibly to an insufficient emphasis on the borrower's overall financial debt burden and the borrower's willingness to stay with the property due to their current equity position. </strong>



This is the real key. These people were very slow to realize that they got themselves into bad loans that they couldn't afford. I'm sure they are just as slow to realize that they are modifying a loan that they still can't afford. Even if they can, who wants to pay for a house that might be worth what you paid by the time you die? They're slow, but they'll eventually get there.