More Mortgage Gloom

It would seem that those anticipating an early end to mortgage problems for lenders and borrowers alike, will have to wait for quite some time.

There has been further speculation that the US Government may still have to bail out mortgage giants Fannie Mae and Freddie Mac Also Kenneth Rogoff, ex chief economist at the International Monetary Fund, has predicted that one of the really big investment banks could go under during the coming months. These are worrying trends indeed, particularly in the light of the mammoth losses already sustained by the leading players.

In the present malaise there have been many job losses and you could be forgiven for wondering where it is all going to end. It is well known that in the UK the Bank of England had to step in to support the Northern Rock Bank, and the US authorities have signalled their intention to follow suit if organizations such as Bear Stearns are similarly threatened.

There is speculation in Wall Street that Lehman Brothers is following a range of measures to strengthen its arm. As with many of their contemporaries it is apparent the sub prime mortgage market has cost Lehman dearly. Their problems may be intensified if the US commercial property market follows what has happened in the residential sector.

It could be more than a coincidence that the Chinese Bank ICBC, is reported to have overtaken HSBC as the world's most profitable bank, at a time when their superb Olympics is drawing to a close. With Europe, the UK, and the US, striving to avoid official recession, Asia is striding ahead, and there are undoubtedly bargains to be had by shrewd and cash rich investors. Testing times seem set to continue and it would be interesting to be able to move forward a year or two to determine the final outcome. In the meantime we must wait and see, and of course hope that established, and hitherto respected Western banks weather the storm.

Please Click Here to visit the Free Mortgage Advice Web Site.

Tags:

No comments: