So how much are the houses worth that sold like crazy just one year ago, today? WSJ has an interesting article about the new prices of the houses: Subprime Resurfaces as Housing-Market Woe
This is going to pressure the banks further:
The U.S. housing market is facing new downward pressure as holders of subprime-mortgage bonds flood the market with foreclosed homes at prices that are much lower than where many banks are willing to sell.
According to Karen Weaver, global head of securitization research at Deutsche Bank AG, the steepest losses are on subprime loans, where lenders generally are recovering just 26% of the original loan amount.
Obviously there is not a lot of refinancing going on – or that is not interesting for the buyers:
There still is much more inventory that mortgage-servicing firms are racing to sell for securitization trusts. Such entities tend to sell in bulk so that they can cut losses, finding it more cost-efficient to move homes through foreclosure and subsequent sale than to try to restructure the mortgage with the borrower. Securitization trusts also realize that potential buyers won’t step in unless the price is attractive.