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The Next "big Short". Commercial

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Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Wall Street speculators are zeroing in on the next U.S. credit crisis: the mall.

It’s no secret many mall complexes have been struggling for years as Americans do more of their shopping online. But now, they’re catching the eye of hedge-fund types who think some may soon buckle under their debts, much the way many homeowners did nearly a decade ago.

Like the run-up to the housing debacle, a small but growing group of firms are positioning to profit from a collapse that could spur a wave of defaults. Their target: securities backed not by subprime mortgages, but by loans taken out by beleaguered mall and shopping center operators. With bad news piling up for anchor chains like Macy’s and J.C. Penney, bearish bets against commercial mortgage-backed securities are growing.


https://www.bloomberg.com/news/arti...found-its-next-big-short-in-u-s-credit-market
 

azbassman21

Junior Member
Joined
Apr 1, 2011
Professional Status
Certified Residential Appraiser
State
Arizona
Auto loans are defailting along with student loans. Sign of the times.

So the FED has hiked interest rates, with the prospect of more hikes to come.

Shades of 2007 - 2008?

I have a real estate client who works for one of the larger banking firms a a fraud investigator. It has been indicated that auto loan defaults increased significantly over the past several months, and they are already putting teams together to handle residential mortgage defaults as there are a large number of ARM's coming due within the next 2-3 years which they are predicting will start a chain of default activity. I'm smelling another down turn.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Here’s why it’s getting harder to ignore rising subprime auto defaults

Subprime auto-loan default rates match those seen just before the 2007-2009 recession. It’s a red flag that’s been flapping for some time for analysts worried it could pose risks to the broader credit market, bank health and, ultimately, the consumer-driven economy.

MW-FJ363_subpri_20170330122802_NS.jpg

MW-FJ361_graphi_20170330122502_NS.jpg


http://www.marketwatch.com/story/he...nore-rising-subprime-auto-defaults-2017-03-30

Looks nasty to me. Fraying at the edges hoping it does not spread into other consumer loans.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Student loan defaults may grow pricier as fees rise

A newly revised policy allows agencies to impose a swift penalty


“With more than 3,000 Americans defaulting on a student loan every day, this just adds insult to injury,” said Rohit Chopra, senior fellow at the Consumer Federation of America and the former student loan ombudsman at the federal Consumer Financial Protection Bureau.

The Consumer Federation of America’s research indicates that 42.4 million consumers owed $1.3 trillion in federal student loans at the end of 2016. About $137.4 billion was in default — a 14 percent increase from 2015 — including federal loans that defaulted in previous years.

A default is not something that happens in a split second. For the Federal Family Education Loan Program it takes a minimum of nine months — or 270 days — of nonpayment for a borrower to face default. After that time, lenders have up to 90 days to file such a claim and most lenders will wait until the end of the claim period, Kantrowitz said.

In the Federal Direct Loan program, a loan is in default after 360 days.

http://registerguard.com/rg/busines...faults-may-grow-pricier-as-fees-rise.html.csp
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
Used car prices are falling and new car inventories are rising. And defaulted car loans are rising.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Student loan defaults may grow pricier as fees rise

A newly revised policy allows agencies to impose a swift penalty


“With more than 3,000 Americans defaulting on a student loan every day, this just adds insult to injury,” said Rohit Chopra, senior fellow at the Consumer Federation of America and the former student loan ombudsman at the federal Consumer Financial Protection Bureau.

The Consumer Federation of America’s research indicates that 42.4 million consumers owed $1.3 trillion in federal student loans at the end of 2016. About $137.4 billion was in default — a 14 percent increase from 2015 — including federal loans that defaulted in previous years.

A default is not something that happens in a split second. For the Federal Family Education Loan Program it takes a minimum of nine months — or 270 days — of nonpayment for a borrower to face default. After that time, lenders have up to 90 days to file such a claim and most lenders will wait until the end of the claim period, Kantrowitz said.

In the Federal Direct Loan program, a loan is in default after 360 days.

http://registerguard.com/rg/busines...faults-may-grow-pricier-as-fees-rise.html.csp

So,
Loans going into default now were taken in 2010 when the political speech was that so many folks were unemployed because they were uneducated, and there were thousands of jobs that could not be filled because there weren't enough educated people to fill them.

:ROFLMAO:

So a year after gradation, either those jobs don't pay enough to cover the student loan plus healthcare, plus living expenses, Or, those jobs really didn't exist and going to college was a stall tactic before the parents found out there really weren't enough jobs for their kids.

:ROFLMAO:

Or,
A bunch of older folks were led to believe that if they got their education, they would find better paying jobs, which did not pan out.

:alcoholic:
 
Joined
Jun 2, 2007
Professional Status
Certified General Appraiser
State
Florida
snip...Wall Street speculators are zeroing in on the next U.S. credit crisis: the mall. It’s no secret many mall complexes have been struggling for years as Americans do more of their shopping online...snip
Back to the retail real estate issue, there's something else happening that hasn't really hit the mainstream retail real estate discussion yet and may be a minimum of five years out (closer to 10?): President Trump's trade deficit realignment talks with China escalated last week, with other nations and more action to follow. If our geopolitical decision-makers can't agree to "expand the pie" rather than just cut the pieces differently to protect turf, and this becomes an international mercantilism cluster-%#@&, we could see sudden, profound changes to the centralized-retail mall and big box fundamentals relying on an abundance of cheap, good quality consumer good imports. The following higher prices, paper-thin margins and even shortages (unreliable supply at your preferred brick & mortar) could escalate the consumer-move to online retail, and the shock could wipe out a great deal of lower-profile retail real estate demand very quickly.

Gee, I sound like I know what I'm writing about.

Ideally, wage growth would accompany production here at home if everybody can play fair, but American business will require at least a little time to learn how to compete in a more open international environment before seeing the benefits nationally.

Anyway, more pressure on brick & mortar results.
 
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