Problems Ahead For More Subprime Securities
The outlook for subprime mortgage securities is bleak. Recent surveys by the American Bankers Association (“ABA”) establish that a slowing economy is making it harder for consumers to repay their debt obligations. Even Federal Reserve Chairman Ben S. Bernanke has acknowledged for the first time that a U.S. recession is possible.
The ABA’s studies confirmed that consumers have fallen behind on car, credit card and home-equity loans at the highest level in 15 years. The rise in consumer credit delinquencies is consistent with a rapidly slowing economy.
The specific findings do not bode well for the economy. Auto loan delinquencies rose to 1.9 percent driving the overall increase in consumer debt higher. The third-biggest credit-card network doubled its reserves for soured U.S. debt in the fourth quarter. Overdue bankcard accounts reached 4.38 percent. Many consumers are finding times particularly difficult as they find themselves spending more of their money on food and gas as prices continue to rise, while income growth is stagnate.
The U.S. economy is rapidly spiraling downhill and subprime mortgages are leading the charge. ABA chief economist James Chessen stated “The rise in consumer credit delinquencies is consistent with a rapidly slowing economy . . . Stress in the housing market still dominates the story, but it’s a broader tale.”
Page Perry, LLC is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing individual and institutional investors regarding their subprime investment problems. For further information, please contact us.
