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My Personal Finance Journey

Personal finance observation, musing and decisions in a journey toward financial independence by 36 with at least $1 million.

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Freddie Mac: Housing Worst Isn't Here Yet





I would be too naive to think the cumulative effect of many years' of reckless lending has already been unwound. How will this affect the economy in the next few years when the Class of 2006 faces graduation?

From MSNBC:

The sharp decline of the subprime housing market offering high-cost mortgages hasn’t yet hit bottom, the head of home mortgage buyer Freddie Mac said Friday.

The number of home buyers starting such loans peaked last year, and interest rates for those buyers are due to rise in the next few years, which could cause foreclosures to spike further, Richard F. Syron said in an interview with The Associated Press.

“I don’t think it’s troughed yet, because of the class of 2006,” Syron, chairman and chief executive of Freddie Mac, said before speaking at a housing conference. “The mortgages written in 2006 in the subprime market are probably the most troublesome. They haven’t hit the reset point yet on interest rates.”

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