The economic data from February appears to be quite grim for the housing market, despite recent actions from the Fed. February saw an increase in defaults for bad mortgages and CCJ loans go up 38% and the end does not yet appear to be in site. For many banks that offered subprime mortgages and CCJ loans, the only solution is to write down this bad debt and hope for better times.Even banking giants have gotten caught up in the backlash and many fear that more big names are going to topple like Bear Stearns did. “Without question, in 2008 these companies are going to lose money,” said Michael Grasher, an analyst with Piper Jaffray & Co. in Chicago who tracks the mortgage insurers. “We’ll likely see better statistics in the months ahead because of government intervention.”Experts are encouraging those with CCJ loans and mortgages that are in danger of going into default to do all that they can to either refinance at a better rate or find ways to cut corners to continue making their payments. If more of these loans continue to go into default, the economic outlook for 2008 and 2009 could be very bad indeed.
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