Friday, September 14, 2007

Mortgage Industry Layoffs

IndyMac Bancorp (the second-biggest mortgage company), National City Corp. and Lehman Brothers Holdings Inc. have been cutting staff. At least 100 mortgage companies have sought buyers or halted lending since the start of 2006, and foreclosures in the second quarter rose to a record, according to the Mortgage Bankers Association in Washington.

Adding to this already dire situation is the fact that mortgage defaults have started moving beyond the sub-prime sector: The Mortgage Bankers Assn. noted a rise in foreclosures on supposedly high-quality prime loans that were used by speculators who put little money down on houses in California, Nevada, Arizona and Florida, and now are walking away due to lower home prices.