Failed Mortgages will Hurt the Housing Market Further

By Mark J. Donovan

With this week’s announcement that the number of failed mortgages on the rise, particularly in the subprime mortgage sector, the housing market will probably continue to cool off.

Many of these subprime mortgages should have never been issued. The homeowners receiving them did not meet traditional basic financial standards. However, as with any sector boom there are always folks out there looking for a quick buck. Unfortunately, in this case it was fly-by night home lender institutions that quickly setup shop to take advantage of the housing market boom.

Companies such as Lowes and Home Depot will probably feel somewhat of a negative impact to their businesses as a result of these failed mortgages, as there will be a few less homeowners doing home improvement projects this year. However, spring and summer are usually strong growth periods for these companies, so the negative impact may be somewhat muted.