Please Note: You are viewing the unstyled version of Subprimelosses. Either your browser does not support CSS (Cascading Style Sheets) or it is disabled. As a result, much of this website will not look the way it was intended, although all of its contents will be accessible to you. For more information, visit our Browser Support page.

Skip to Primary Site Navigation, Secondary Site Navigation, Content

Home > Cases > ABS & CDO Investment Losses > Why the Subprime Mess is Far from Over — The Decline in Home Prices Continues Downward

Why the Subprime Mess is Far from Over — The Decline in Home Prices Continues Downward

Recent data showed prices of existing homes plunged nationally through 2007, ending the year down 8.9% - the largest decline in 20 years. December's drop was the 12th in a row. The decline in home prices is due to the widening subprime mortgage crisis and an example of simple supply-and-demand economics — there is simply an overabundance of unsold homes.

The housing decline is the worst in more than two decades, and is moving into its third year. Defaults among subprime borrowers and those unable to meet rising payments on adjustable-rate loans have driven foreclosure filings. Foreclosures add to the glut of unsold homes. Additionally, tighter lending practices have left buyers finding it tougher to obtain mortgages. Banks may resell as many as one million repossessed properties this year, forcing prices down even further.

Many economists are forecast this decline in home prices to continue for 2008. Billions of dollars in adjustable rate mortgages are scheduled to reset this year, according to Citigroup, which will raise minimum payments for many borrowers.

In the summer of 2007, our group, who individually and collectively have extensive experience in representing investors against Wall Street, formed an affiliation. Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage related investment losses. Contact us.


Return to ABS & CDO Investment Losses >


Top