AvlGuy

Prime Foreclosures Now Greater Than Subprime

Lindmark's perspective is another example of tweaking the questions/issues and inter-changing words so as to allow for Omissions of Data labeled as 'discomforting'. The blog did NOT say that prime FORECLOSURES are now higher than sub-prime's, he expressly wrote that prime 60-DAY DELINQUENCIES are now higher than subprime's.
Many Wall Street Pig "lip stickers" know that casual readers mistakenly inter-change the 3 words, foreclosure, defaults, and delinquencies. The pig men play the word-game switcheroo in blogdom frequently to make sectors look better.


Beyond that, the absolute numbers definitely matter when assessing both the impact of delinquencies on families and foreclosures on communities, as well as the direction of the trend. An increase in absolute numbers in a big pool or a small pool is still an upward trend.
I downloaded the HopeNow July Press Release and Data Table (a pdf) b4 posting my previous reader comment. Here's the direct link.
www.hopenow.com/upload...

Go to page 4 of the pdf; top table titled "Borrower Loan Workout Plans"; the 5th column titled, ".2008 July", and it states that there were 57,822 Prime Repayment plans executed v. 54,171 SubPrime Repayment plans.

It also shows that in addition to repayment plans, there are modifications, where more work has been done by their staff on sub-prime than prime loans. There are also their definition of terms and plans.

Prime Foreclosures Now Greater Than Subprime

If the issue is stated as, “Is the impact of distressed mortgages on credit and banking rising, declining or dawdling along the bottom?”, then Harrison's blog and Muzie's and others' comments above are on mark.
But many questioners are uninformed on the absolute numbers and dollars involved in prime and alt-mortgages, as well as the trend in prime. This is the case w/general news media journalists and their non-finance-savvy readership. Thus even today, they still mistakenly phrase the question exclusively around sub-prime. That ignorance allows for this response that is true yet deceptive: “No, the sub-prime problem is not expanding as fast as before and may be trending down”.

Let's tweak the original question beyond stress to just banking and the credit industry, and ask what most local elected officials and homeowners (voters) are now asking: “What's happening to my community? How is the overall financial stress trending with regards to delinquencies, foreclosures, REOs and likely vacant properties?”
To honestly answer their question, the response has to be expanded to include the direction and absolute numbers and dollars in distressed prime and alt-mortgages, as well as sub-prime. Deceitful replies, as well as misguided replies from folks lacking the spine to face the truth on current trends, could again focus only on subprime trends.
If we choose to keep tailoring the wording of questions to purposely yield falsely comforting answers, we can even ask: “Are a large % of prime loans distressed?” And we will get the falsely comforting yet ‘accurate’ answer of “No, the majority of prime loans are not distressed” with deceitful omission of what the trend is in prime delinquency and foreclosures.
A worthless Q and A, but a factually correct one as trumpeted by some reader comments above.
We are not a nation of children, we don’t need to exercise ‘Lies of Omissions’ in the lame name of ‘not scaring the adults and talking ourselves into a recession.’
We need an online, print and TV news culture that possesses cojones and backbone, and less of a need to Go Along to Get Along.
That said, I wish the blogger, Harrison, had indeed used 90-day delinquency data rather than 60-days which may be over-stating the problem in each of the snapshots provided in the table.

Finance, Credit Cards, and the Fed

Kudos on your first point. I too believe that the babying of the nascent credit bubble and its subsequent deflation has given a black eye, in the eyes of pro-market supporters overseas as well as domestically, to not just finance but also global credit markets and, to a degree, the very concept of credit, as unfair as that may be. When I couple your 1st point with your 3rd, you make a case for my other concern: complex financial systems require strong democratic institutions that engage critical components of their nations. The US and UK's recent stumbling & fumbling weaken the juggernaut argument connecting democracy and economic growth that we preach to other nations.