September 28, 2007

Man on the Street: Mortgage Crisis Hitting Close to Home?

We buttonholed a few folks this week on the streets of Park Slope and asked whether they knew anyone who'd been affected by the mortgage crisis. While no one reported trouble close to home, plenty thought it might be looming just 'round the corner...

I don't know anybody who's been affected, but I'll probably see some in the coming months. Houses around here are so expensive that I don't know how you can buy without a heavy mortgage.
Kyle; lives in Park Slope.

Not really, but I know mostly young people who've recently bought and people who've owned their houses for many years. I assume I'll start seeing more people affected by it. Part of it might be, though, that it's not something that people readily talk about.
Julia; lives in Fort Greene.

No. I certainly can't imagine anyone I know having trouble with a mortgage, because I don't know anyone in New York who can afford a mortgage--let alone be in trouble for it.
Steve; lives in Williamsburg.

No. I don't really know anything about it.
Tiffany; lives in Park Slope.

No. I think I'll probably see more, though. The market is obviously changing.
Abby; lives in Park Slope.

Posted by Gabby at 10:58 AM | Comments (25)
Categories: Money, Mortgage

September 24, 2007

As Mortgage Rates Rise, More Deals Sink

The suffocating embrace of the subprime crisis is definitely starting to take the wind out of the city’s residential deals. Mortgage brokers say they’re seeing a pronounced uptick in the number of buyers who are backing out of deals because they can’t get mortgages at competitive interest rates. Hardest hit are borrowers who don’t have excellent credit histories, or who expected to take out large mortgages and then pay them down with bonuses. A number of brokers say they’re seeing plenty of prospective buyers who didn’t lock in rates and who can’t close on the units because they can’t afford higher-than-expected monthly payments. And these are borrowers who aren’t necessarily on financially shaky ground—a sobering article in today’s Times documents some of the effects of too-lenient lending practices geared towards lower-income earners. Large swaths of working-class enclaves in the boroughs, like parts of central Brooklyn, have turned into new-development “ghost towns” because of predatory lending practices and concomitant rising foreclosure rates. So it’s becoming clear that the mortgage industry crisis is now affecting the city’s haves and have-nots. Anyone had a deal scuttled recently?
Frustrated New Yorkers Grapple With Loan Rates [NY Times]
Risky Loans Help Build Ghost Town of New Homes [NY Times]
Photo by D.B. Blas

Posted by Gabby at 9:00 AM | Comments (46)
Categories: Market, Money, Mortgage