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Central Missouri | Just got done speaking with a friend of mine who is a retired FDIC bank examiner. His contacts at FDIC tell him that there are 59 troubled banks in MO alone. Extrapolate that across the U.S.
From the Article: The weakened housing market may get considerably worse before it gets better according to housing-industry professionals who expect foreclosures and home-price declines to continue pressuring the sector through at least the first half of 2010. The biggest problem will likely be a flood of inventory hitting the market from rising foreclosures, says Bob Curran, a managing director at Fitch Ratings.
With a mountain of specialized adjustable-rate mortgages (option ARMs and certain Alt-A mortgages, etc.) slated to reset over the next 12 to 18 months and unemployment projected to go as high as 10.5% this year, the number of homeowners defaulting on their mortgages is expected to surge.
And More: First American CoreLogic estimates that apprx. 25% of homeowners owe more than their home is worth. In that case, it could take up to a decade for many homeowners to regain equity in their homes, while some people in the hardest-hit regions of the country may not see a recovery during their lifetimes.
While it has historically taken five to 10 years for home prices to regain losses after a major downturn, it is likely to take much longer this time, particularly in parts of the country that have seen the steepest declines.
Now how in the world are banks gonna fix their balance sheets if property values continue to weaken. One thing is for sure, short term interest rates that the too big to fails borrow at will remain close to zero. | |
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housing slump is not over good read
