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The Mighty Mortgage Machine

Posted by: Chris Palmeri on January 25, 2007

A recent report from Standard & Poors, the debt rating agency owned by BusinessWeek’s parent company McGraw-Hill, shows the shifting nature of the mortgage market. Higher interest rates and a cooling housing market have forced some mortage companies out of business (Ownit, MLN, Sebring Capital) and others to put themselves up for sale (Option One, Ameriquest). Defaults are up, particilarly in the most risky category—borrowers who took out “piggy back” second loans with lenders that didn’t require the normal level of loan documentation.
Consumers are still buying houses and refinancing existing mortgages in numbers that would have seem unthinkable a few years back though. That’s good for the Wall Street firms that package and sell mortgage-backed bonds. S&P estimates that the volume of mortgage-backed securities will decline 10-15% this year. That would put it at a level of $900 billion or so—the third best year ever. In 2003, only $586 billion mortage backed securities were sold. Homeowners and potential buyers should be thankful there’s still a lot of liquidity in the mortgage market.

Reader Comments

mike d.

January 25, 2007 9:26 PM

but how long can this excess liquidity last? what happens when it tightens up?


February 22, 2007 2:22 PM

This site shows you how higher interest rates and a cooling housing market have forced some mortgage companies out of business and others to put themselves up for sale.To get detailed information about this site visit mortage loans!


March 13, 2007 1:24 PM

This is a good article by Chris Palmeri. It is very interesting. We can get more info about todays mortgage rates, mortgage news, mortgage frauds, net branching, home mortgage financing strategies, mortgage loan officer training, and much more interesting updated news from


September 6, 2008 6:38 PM

Mike D., this is what happens when there's excess liquidity.


March 20, 2009 2:12 AM

this site show you higher interest rates and a cooling housing market.this is the good article by chris palmeri

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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