RISMEDIA, April 3, 2007-Realtors blame the subprime crisis on greed, while mortgage brokers are warning against trigger leads, according to the latest week's coverage from http://www.MortgageDaily.com – a dominant source of online news for the mortgage industry.
An economist for the National Association of Realtors said in a recent newsletter the group's price growth forecast has been lowered to 1.2% because of subprime problems. He reported California was among states with the highest subprime share while the Dakotas were among states with the lowest.
"The excessive greed of some people wanting easy high-interest bearing income led to some companies lending to shaky borrowers during the housing boom," the economist concluded.
A panel at a National Association of Mortgage Brokers conference offered advice for fighting trigger lists-a controversial lead generation method.
Trigger lists are based on consumer information sold by the credit bureaus after the credit repositories receive an inquiry by a mortgage originator. Loan officers grouse that the lists make them the free marketing arm for their competitors. Lead generator companies sell the lists to lenders.
First Franklin Financial Corp. is in the process of consolidating some branch functions, a spokeswoman told MortgageDaily.com.
She said she was unaware of recently-reported layoffs but did note the Merrill Lynch subprime subsidiary is hiring account executives.
Subprime foreclosure problems have been blown out of proportion, according to a new investment report.
Last year, subprime lending represented about 23% of new loans, Lehman Brothers economists said in a report. "So even if there is a dramatic scaling back of a third, the overall supply of credit will only decrease by about 8%."
Lehman acknowledged that "precise estimation of the subprime shock is difficult."
Residential Capital LLC will "sharply" reduce nonprime origination volume through tighter underwriting criteria and pricing changes and engage in a "structural cost reduction as business is right sized for the lower industry volume," among other strategic initiatives, parent GMAC Financial Services said in a filing with the SEC.
For more information, visit http://www.mortgagedaily.com/subprime.asp?spcode=pr.
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