“Current conditions in the secondary mortgage markets create significant near-term profitability challenges,” Capital One said in a statement. “Further, recent and continuing developments in the mortgage markets reduce the long-term outlook for profitability in the business, as the company expects markets for prime, non-conforming mortgage products are likely to remain challenged.”
Later, gator.
Countrywide has secured $11.5B in financing from 40 banks in an effort to remain afloat as the mortgage market crashes.
Now you can follow the subprime meltdown around the world with this handy interactive graphic from Financial Times. It’s grimly amusing to click the “show all” radio button and then drag the slider back and forth from “Pre-Jun 25” to “Week of Aug 6”.
The subprime meltdown has made its way into campaign speeches, thanks to one Sen. H. Clinton (D-NY).
Who’s reading us now? Stephen Colbert weighs in on a bunch of Consumerist topics with more gravitas than we can muster ourselves. Sorry we missed the whole “dentist puts boar tusks in your mouth while you’re anesthetized” story. We’ll try to do better next time.
In a project born out of “boredom” and an experience with a landlord that was facing foreclosure due to gambling on an ARM, grad student Ethan Garner created CraigStatsSF, a site that visualizes craiglist San Francisco rental listings. He writes:
As I started looking for places, I noticed everything that used to be for rent was now for sale due to the same foreclosure effect that happened to my landlord.
If you got a mortgage through Ameriquest from 1999-2005, you may be eligible for a $325 million settlement Ameriquest reached with 49 states over their shady lending practices, which included failing to disclose that the loans had adjustable rates, failing to disclose the terms of the loan, refinancing homeowners into inappropriate loans, inflating home appraisals, and charging excessive fees such as prepayment penalties and loan origination fees. Ameriquest did not admit wrongdoing.
Foreclosures hit an all time record in the first half of 2007, according to Bloomberg. Since the beginning of the year 926,000 foreclosures have been filed, 56% more than a year earlier.
Many consumers who signed up for adjustable rate mortgages in 2004 and 2005 will see their mortgage payments jump this October, according to CNNMoney. With foreclosure rates already as high as one foreclosure filing for every 656 households in the US, this can’t be good news.
The subprime lending arm of tax giant H&R Block continues to hemorrhage money, to the extent that it’s close to being unsalable, according to Bloomberg.
H&R Block Inc.’s mortgage unit lost a $1.5 billion credit line, falling “dangerously close” to the minimum amount demanded by a hedge fund firm that has agreed to buy the money-losing home lender.
Pending sales of existing homes dropped for the third straight month as troubles in the mortgage industry continue to disrupt the housing market. Figures released today show a 3.5% drop in May, following April’s drop of 3.2% and March’s drop of 4.5%.
The company reported losing $85.5 million, or 26 cents per share, during the February-April period, which is when the nation’s largest tax preparer sees the majority of its revenue. By comparison, the company earned $587.5 million, or $1.79, during the same period a year ago.
H&R Block says it will sell its subprime lending operation to a private equity firm.
Fair Isaac says that, in addition to better predicting the behavior of subprime borrowers, the new FICO score will do a better job in assessing new accounts and borrowers who have little or no credit histories, such as young people and immigrants.
Most people can expect their score to rise or fall slightly. — CAREY GREENBERG-BERGER
Yesterday’s Morning Edition featured confessions from former Ameriquest mortgage employees. The confessions included startling revelations, such as:
Business Week’s top story concerns the “subprime” lending industry in the United States. It’s a good read, one of those articles that makes you feel smarter for having read it. It’s shocking too, reading about a Navajo woman who makes $15,000 a year being lent $7,922 at 24.9% (to buy a 1999 Saturn with 103,000 miles on it) makes us slap our foreheads in frustration. But that’s how it goes when you’re poor. Your bank is a car dealer, your tax accountant is Jackson Hewitt and you’re screwed. —MEGHANN MARCO
Since 1.1 million of you will soon be forced out of your homes due to the subprime mortgage debacle, we thought we’d link this extensive article in the Washington Post detailing the various strategies one can use to negotiate with lenders and hopefully stay in your home.
Hey, you may be asking yourself, why are GM’s profits down 90% from this quarter last year?
“Even if they’re not trying to sell their house or getting hammered with problems with a subprime mortgage, consumers can’t ignore the headlines.”
Part of 
