Articles About Finance And Refinancing

Martin Weiss Examines the Mortgage Meltdown in Latest Issue of Money and Markets

Jupiter, FL (PRWEB) June 28, 2007 -- Martin Weiss, Ph.D. examines the mortgage meltdown in the U.S. Dr. Weiss takes a closer look at mortgages and recommends what to do with the assets being affected.

For many months, Mike Larson has been warning about a meltdown in America's vast new market for home mortgages. Now that meltdown is here.

The evidence is ubiquitous and indisputable:

? From their peaks in 2005, existing home sales are down 16.9%; new home sales, down 29.4%.

? For the first time since data was collected in 1968, home prices have declined nationally for nearly a year.

Worst of all, American homeowners are falling behind on their mortgage payments in record numbers: The delinquency rate on low-quality mortgages has surged to 13.8. This mortgage meltdown has struck down the stocks of home builders, low-quality lenders, and now, also the widely owned Real Estate Investment Trusts (REITs).

The hedge fund that collapsed last week invested more than 90% of its assets in securities that were touted as being as safe as, or almost as safe as, a U.S. Treasury bond, according to documents reviewed by The Wall Street Journal.

? U.S. Treasury debt was originally created to finance the American Revolution in the days of George Washington and Ben Franklin. In contrast, "collaterized debt obligations" (CDOs) were created by the now-defunct Drexel Burnham Lambert in 1987, where former junk-bond king Michael Milken made his home.

? Unlike Treasury securities, CDOs are not backed by the full faith and credit of the U.S. Government.

? Unlike a simple cash investment in bonds, these CDOs were usually leveraged to the hilt with huge borrowings from major Wall Street firms like Merrill Lynch, J.P. Morgan, Goldman Sachs and Barclays.

? Most important, unlike Treasury securities, they are not traded in a huge, active market where investors can buy and sell them at fair prices. Instead they are traded only sparsely, with few buyers or sellers in the open market.

First, Bear Stearns manages another, similar fund that's bigger and riskier: The High Grade Structured Strategies Enhanced Leverage Fund. Second, Bear Stearns is just one of several big players in the CDO market, a market which has mushroomed in size from virtually nothing a few years ago to over $1 trillion today. Just in 2006, industry-wide sales reached $503 billion, a fivefold increase in three years. Third, this is not just a Wall Street phenomenon. It's caused by a broader mortgage meltdown, which is part and parcel of an even broader real estate bust.

So even if Bear Stearns can put out this particular fire, it's going to be very hard pressed to contain the crisis for long. This crisis is expanding in concentric circles.

First it affected just the niche players in the non-prime mortgage business. Then it spread to mid-grade mortgages. And now it's hitting Wall Street in the gut. Also, don't be surprised to see investors snub higher quality mortgage-backed securities where underlying default rates are also rising, and where well-publicized accounting shenanigans have not yet been fully overcome.

Plus, it should come as no surprise that REITs stocks have also begun to tumble: An advance warning that commercial properties are also destined for a similar fate.

First, for cash assets, continue to favor the highest quality investments in the U.S. That's still short-term Treasuries or a Treasury-only money market fund. Second, hedge with investments that are designed to go up in precisely this kind of environment. Third, switch some money to investments that are divorced from real estate woes and tied to big dividends such as the 13.4%-yielding company that Money and Markets Associate Editor Nilus Mattive names for his readers.

For more information and to read the full article, visit this link: http://www.moneyandmarkets.com/press.asp?rls_id=831&cat_id=6&

About Martin Weiss & Money and Markets:

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.

###

Other Article Sites

findabook.com  moneycd.info  a-mortgage.info   about-lemon-laws.info  aboutstudentloans.info
all-about-publishing.info  auctions-articles.info  bestcollege-university.com  bestispconnection.com
biblefolder.com  blogger-website.com  books-used.info  brokers-guide.info  buywindows.info  cable-dsl.info
career-miner.com  carpel-tunnel.info  cashinaflash.info  cashloanreviews.info  casinobell.com  chat-house.info
clearmycredit.info  collegeloantips.info  crones.info  depression-articles.info   dirnic.net  dishguides.info
divers-below.com  expodog.info   financewizz.com  fire-insurance.info  getgood.info  handleit.net   it-idea.info
health-supplies.info  hosting-right.com  insidealert.com  insurance-facts.info  jobs-employment.info
justgood.info  lookgold.net   lowcost-travel.info  money-source.info  myhostzone.info  numisblog.com
peoplesearchfinder.info  pr-articles.info  realeas.com   refinancing-guides.info  spyware-remove.info
telelot.info  the-law.info   toppaid.info  travel-deals.info  travelcorrect.com  wedding-guide-site.com
your-blog.info  your-credit.info

MORE ARTICLES:

Reverse Mortgages – a Reversal of the Mortgage Process
Mortgages have assumed a number of characters from the time of their inception. The traditional mortgages used to be of the repayment type.

Elizabeth Rose Earns Certified Mortgage Planning Specialist (CMPS) Designation.
Certified Mortgage Planning Specialist helps clients focus on utilizing tax strategies, retirement planning and equity management to create a well planned debt strategy with the mortgage as the centerpiece.

How and when does a personal loan center help?
A personal loan center is a one-stop solution to all financial needs in UK. These loan centers established over a couple of years provide online assistance to borrowers in raising funds or loans to realize their personal needs.

Finding Student Credit Card Offers
Searching for your first credit card will only be hard if you make it that way. If you?ve been searching for a while and you?re still confused about the credit cards themselves, this article will help you better understand some of the important questions most first time student appliers ask. Hopefully after this read, you?ll understand the concept of student credit cards.

College Student Loan Information Site Has Good News for Future Borrowers
StudentLoanCenter.biz, a Web site offering helpful information and advice about student loan debt and borrowing, is informing their visitors about encouraging news from Congress

Encore Payment Systems and Less Networks Team Up with Merchant Profitability Solutions
Customer traffic and retention solutions with loyalty programs and smarter WiFi.

First IRA Mortgage, Inc. to Host Town Hall Meeting in Park City, Utah
Financial Professionals invited to discuss financing real estate in retirement plans. First IRA Mortgage, Inc., a specialty, wholesale mortgage lender, will teach financial industry professionals how to finance real estate in both Roth and traditional IRAs and individual 401ks at a free Town Hall Meeting on Thursday, December 14th at the Prospector Square Lodge and Conference Center.

Student Loan Defaulters- Interrelated Guide For Student Loans
It's difficult to provide accurate student loan default information, but we have gone through the rigor of putting together as many student loan default related information as possible. Even if you are searching for information somehow related to alternative student loans for people with bad credit, apply for a student loan with bad credit, top student loan consolidation companies or federal direct parent loan for undergraduate students this article should assist a great deal.

What Do Lenders Look For When Qualifying Someone For A Loan?
The information you are about to read will give you some insider knowledge that will help you understand how the mortgage industry operates and will help you avoid making costly mistakes that you could end up paying for years to come It is my hope that this report will provide some insight that will enable you to make better decisions when it comes to choosing between the many different mortgage programs available today

Bankruptcy Mortgage Advice
Getting a mortgage following bankruptcy may sound like an impossible task but by perusal of professional bankruptcy mortgage advice you can increase the chance of gaining approval.

5 Steps to Getting on Top of your Mortgage
Getting on top of your mortgage so you can pay your loan off faster and potentially save thousands of dollars on your home loan is possible with a plan and consistent effort. There are mortgage reduction strategies that you can put into place that will ensure that your loan is paid off more quickly without putting a huge strain on your current budget.

Expert Source Available to Comment on President's Subprime Mortgage Proposal
Bills.com co-CEO suggests ways to manage a mortgage during the meltdown

Tips for getting a low rate North Carolina mortgage loan after bankruptcy
Tips for getting a low rate North Carolina mortgage loan after bankruptcy

Examining Home Mortgage Refinancing Options a Summer Priority For Canadians
Canadians looking at their home mortgage refinancing options should note a sea change in emphasis in the Bank of Canada?s policy focus that is affecting, and will in all likelihood continue to affect, Canadian mortgage markets Well, perhaps not a sea change, but there has been a decided shift in emphasis amongst Canada?s central bankers from spurring the economy through the use of rate cuts, back to keeping a wary eye on inflation

Establishing A Comprehensive Debt Management Plan: Using A Low Interest Debt Consolidation Loan
Introduction