http://kirkcaraway.com/21/12/2007/jingle_mail Comments for "Jingle Mail" en http://kirkcaraway.com/21/12/2007/jingle_mail <p>It's not every day you get some new terminology to <a href="http://calculatedrisk.blogspot.com/2007/12/bofa-attitudes-changing-towards-default.html">decribe what a mess banks made in regards to the housing bubble.</a></p> <blockquote><p>If every upside down homeowner resorted to "jingle mail" (mailing the keys to the lender), the losses for the lenders could be staggering. Assuming a 15% total price decline, and a 50% average loss per mortgage, the losses for lenders and investors would be about $1 trillion. Assuming a 30% price decline, the losses would be over $2 trillion.</p> <p>Not every upside down homeowner will use jingle mail, but if prices drop 30%, the losses for the lenders and investors might well be over $1 trillion (far in excess of the $70 to $80 billion in losses reported so far).</p></blockquote> <p>I can imagine that a whole bunch of people who bought homes in the last couple of years, seeing them now worth less than what they owe, taking this option out. Why not? Actually, I think upside down homeowners can use this leverage to negotiate better terms with the banks, forcing them to eat some significant losses. </p> http://kirkcaraway.com/21/12/2007/jingle_mail#comments mortgages Fri, 21 Dec 2007 07:41:02 -0800 kc 480 at http://kirkcaraway.com