The mortgage crisis that led to the market meltdown in 2008
was devastating for investors. But some believe that a second
mortgage crisis could be coming, and one key catalyst set to
occur later this year could start a new wave of trouble for the
In the following video, Dan Caplinger, The Motley Fool's
director of investment planning, looks at the next threat to the
mortgage market: the Home Affordable Modification Program. Dan
notes that under HAMP, many homeowners got mortgage lenders
Bank of America
, and other lenders to cut principal balances or reduce interest
rates on their mortgages. But for hundreds of thousands of
homeowners, low rates were slated to expire after five years, and
increases of up to one full percentage point per year on their
rates could be costly. With estimates of adding $200 per month to
mortgage payments, rate increases could trigger a new wave of
defaults and necessitate even further action to help homeowners.
Dan concludes that the threat won't hit all at once, but that
pressure from the situation could last for years to come.
Why mortgage lenders could see an even bigger
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owns warrants on Bank of America, JPMorgan Chase, and Wells
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