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-- Next stop: Recession
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quote:

Originally posted by Zombie0729 i'm in mortgages and a rule we always live by is 'as long as something is happening we're ok' whether it's drasticly bad or good, as long as its not stagnant there's business to be made. i've done over 8 purchases just in the last 2 mos, 4 short sales and 1 foreclosure, there are some very good deals out there right now.

Any of those with 100% financing? But then again, 1 month ago, a few creative loans still existed. A lot has happened since then. Of course these are always a good deal, for mortgage companies, bankers, and Realtors�. Okay, maybe not so good for bankers who's left holding the dirty bag and selling at a loss. I'm just not sure if it's a good time for the buyers though. I have the feeling that some of these will go back as short sales / foreclosures. At least that means something is happening.

My friend told me last night he got laid-off, he was a programmer for a 60+ mortgage company in Irvine. It's now about 1/3 the size compared to when he first started 2-3 years ago.

quote:

Originally posted by ninetyninej http://drhousingbubble.blogspot.com...ion-letter.html

I visit that site quite often. I also like these.

http://bubbletracking.blogspot.com/
http://www.socalbubble.com/
http://www.irvinehousingblog.com/

nice. thanks for the websites. We'll see how far the rally goes now that the fed has widened the discount window. I don't reallyu understand how that all works though, anyone here care to explain?

http://www.latimes.com/business/la-...=la-home-center

Bill Ashmore drove his Porsche Cayenne to Countrywide's Laguna Niguel office and waited half an hour to cash out $500,000, which he then wired to an account at Bank of America.

"It's because of the fear of the bankruptcy," said Ashmore, president of Irvine's Impac Mortgage Holdings, which escaped bankruptcy itself recently by shutting down virtually all its lending and laying off hundreds of employees.

"It's got my wife totally freaked out," he said. "I just don't want to deal with it. I don't care about losing 90 days' interest, I don't care if it's FDIC-insured -- I just want it out."

sicking!

quote:

Originally posted by naeblis nice. thanks for the websites. We'll see how far the rally goes now that the fed has widened the discount window. I don't reallyu understand how that all works though, anyone here care to explain?

Fed Discount Window

quote:

The U.S. Federal Reserve Friday it cut by a half point the primary discount rate, which governs direct loans from the Fed to banks. The primary discount rate provides a borrowing safety valve for qualifying institutional borrowers. The primary rate is now 5.75 percent, one-half a percentage point above the target for the federal funds rate, which is the Fed's benchmark short-term interest rate and its main tool to influence the economy. The discount window was restructured in early 2003 to lift discount rates above the federal funds rate, which governs overnight loans between banks, and improve its operation as a policy tool and backup source of funds for banks. The boards of directors of the 12 regional Fed banks can request changes in the discount rate, which then need to be approved by the Fed's board. The action taken on Friday came at the request of the boards of the New York Federal Reserve and the San Francisco Fed banks, and was approved unanimously. In addition to the primary discount rate, the Fed also lends directly under two other discount window programs: secondary credit and seasonal credit. Each is offered at a different rate, with primary credit usually extended only for very short periods of time and to borrowers in sound financial health. Financial institutions that don't qualify for primary credit can request access to secondary credit to meet short-term liquidity needs, or to tackle serious financial problems. The third category is seasonal credit, which is aimed at relatively small institutions experiencing seasonal swings in borrowing needs, like banks in farm communities. In restructuring the discount window program in 2003, Fed officials hoped to break down the reluctance of institutions to borrow from the central bank, and believed the primary credit rate could provide a cap for the fed funds rate in times of financial market stress.

So if the banks can borrow more from the feds, they can lend out more to the businesses and consumers. Bring on the credit! Oh look, the DOW ended above 13000!

Check out Mish's analysis on this:

http://globaleconomicanalysis.blogspot.com/

Awesome! Thanks GT for the explanation! =)

i would start to worry about recession when the dow drops lower than 12800 technically.

fudamentally, we cant expect the damn thing to go up and up without any corrections or so. mortgages that i've seen and heard of in couple of years are insane, we knew something like this was coming. the thing looks like an accounting book of enron.

Six homes on my block have been foreclosed on. They have all been up for sale for almost seven months and not one has sold. From what I have seen and heard from the neighbors is that no more than three families have looked at any of the homes. We bought our home back in 1999 for a smokin' good deal and during the housing boom the value of all the homes on my block tripled.

If Countrywide goes under I will probably end up living on an empty street.

How did a strawberry picker earning $15,000 a year qualify for a loan of $720,000?

One of those stories that explain part of this mess. At least someone got their paycheck!

quote:

Originally posted by djGT How did a strawberry picker earning $15,000 a year qualify for a loan of $720,000? One of those stories that explain part of this mess. At least someone got their paycheck!

Ahhh the infamous New Century fraud loans -- American greed at its best

so a poll was taken to figure out how people were able to afford their subprime mortgages.



More news on Countrywide, keep in mind that most of their business was in the prime / alt-a loans.

source

quote:

Countrywide Financial Corp., the nation�s largest mortgage lender, has begun laying off staff as part of its effort to ride out the credit crunch that has rocked the home loan industry, according to a report published Monday. Countrywide is the largest mortgage lender by volume, accounting for more than 13 percent of the loan servicing market as of June 30, according to the mortgage industry publication Inside Mortgage Finance.

quote:

Originally posted by djGT Any of those with 100% financing? But then again, 1 month ago, a few creative loans still existed. A lot has happened since then. Of course these are always a good deal, for mortgage companies, bankers, and Realtors�. Okay, maybe not so good for bankers who's left holding the dirty bag and selling at a loss. I'm just not sure if it's a good time for the buyers though. I have the feeling that some of these will go back as short sales / foreclosures. At least that means something is happening. My friend told me last night he got laid-off, he was a programmer for a 60+ mortgage company in Irvine. It's now about 1/3 the size compared to when he first started 2-3 years ago. I visit that site quite often. I also like these. http://bubbletracking.blogspot.com/ http://www.socalbubble.com/ http://www.irvinehousingblog.com/

thankfully most of my business is Fannie MAE DU stuff, i have the occasional jumbo from a real estate developer that i work with but thats only about 4-5 deals a year.

I also think you're right about equity being gone but it's been fictitious from the get go. San Diego, especially, saw 10-20% increases in some of the past years which is just a joke. It only occured becuase more buying power was had with these Neg AM loans and now that values are dipping and their loans are growing are we seeing the issue.

the 417k-650k range is whats going to dip the most, a lot of those homes are going back into the conforming arena and home prices will fall hard.

good for me though, this year a lone i must be on a 5:1 purchase to refinance ratio.


i guess my point is this:

- appreciation from these exotic loans created a great amount of fictitious equity
- stated income, especially made it even worse
- now we're getting back to the way of conventional lending, you walk into the bank with your W2 and your down payment and we tell you how much you can afford
- now MORE people will be able to afford homes. There will also be a decline in debt because people won't have to taken on more just to get their foot in the door of these homes

quote:

Originally posted by Zombie0729 - appreciation from these exotic loans created a great amount of fictitious equity - stated income, especially made it even worse - now we're getting back to the way of conventional lending, you walk into the bank with your W2 and your down payment and we tell you how much you can afford - now MORE people will be able to afford homes. There will also be a decline in debt because people won't have to taken on more just to get their foot in the door of these homes

I agree with all your points except the last part. Now that prices are so inflated, less people will be able to afford these homes with conventional lending standards. Until prices go down closer to the affordability level, I don't think we will be solving the slow sales and inventory issues accross the nation, especially in the high bubble areas like Florida, Nevada, Arizona, and California.

Capital One to Shut Unit, Cut 1,900 Jobs

quote:

Capital One Financial Corp. said Monday it will cut 1,900 jobs and shutter its wholesale mortgage banking business, a move that comes as lenders continue to struggle in the nation's housing and mortgage markets. Capital One said it will shut down GreenPoint Mortgage and eliminate most of the jobs by the end of year. The McLean, Va.-based company will close 31 GreenPoint locations in 19 states and "cease residential mortgage origination" effective immediately but said it will honor commitments to customers with locked rates who have loans already in the pipeline.

quote:

Originally posted by djGT Capital One to Shut Unit, Cut 1,900 Jobs

capital one is seriously amazing to me... for how long i've worked with greenpoint, i NEVER knew cap one owned them. good p.r.

i was in this weekends san diego union tribune front page article about the mortgage market!

"Anthony Ross says, 'i use to be able to qualify 6 or 7 of every 10 people i talked to for some kind of loan, now its down to 2 or 3'"

heh

Yeah GreenPoint going under was really shocking, so is First National Bank of Arizona...

As for Countrywide: TIMMMMBBBBERRRRRRRRR

http://www.latimes.com/business/la-...ewed-storylevel
http://originatortimes.com/content/...d=2513&zoneid=1

2007-08-21 Class Action Lawsuit Filed Against Countrywide Financial Corporation

mortgageimplode.com's caption was perfect: "All we have to say is: frigging finally."

http://money.cnn.com/news/newsfeeds...ire/0293486.htm

So much insider trading and over the last 7+ months Countrywide CEO Angelo Mozilo has been churching up the company to the media while dumping stock behind the scenes so fast it'd make Enron or Worldcom exec's heads spin:

http://globaleconomicanalysis.blogs...uptions-at.html
http://finance.yahoo.com/q/it?s=CFC

someone big is going to have to buy them out, their portfolio is huge...


china anyone?

quote:

Originally posted by Zombie0729 someone big is going to have to buy them out, their portfolio is huge... china anyone?

yeah, the head of HUD has been trying to dump as much of our mortgage backed waste overseas for months!



Another one bites the dust: Accredited Home Lending

http://bloomberg.com/apps/news?pid=...f5CU&refer=home

I have some close friends that work with this company, some with families/kids to support

I posted the following just 1 week ago and both Accredited and NovaStar have died :<

quote:

Originally posted by gimmebeatz selling ur stocks just because the market it down is not the smart way to invest at all. if ur not planning on retiring right now, what the market is doing should be of no concern. im 23 and continually invest monthly with dollar cost averaging and it doesnt bother me at all when the market goes down, because all that means is that the stocks are "on sale" right now and when the market comes back up ill have bought even more shares from it being down. unless ur 60-65 and planning on retiring soon, this shouldnt matter at all to u. Originally posted by ninetyninej you should invest heavily into Countrywide then (symbol: CFC) buy Accredited (symbol: LEND) and NovaStar (symbol: NFI) stocks too, hurry!

Fannie, Freddie could help to stimulate jumbo mortgage loans

quote:

Some lawmakers are calling on Congress to stimulate the moribund jumbo-loan market by letting Fannie Mae and Freddie Mac purchase substantially larger loans on homes in high-cost metro areas. Today, Fannie and Freddie can purchase single-family loans up to $417,000 in the continental United States. The limit is 50 percent higher - $625,500- in Hawaii, Alaska, Guam and the Virgin Islands because years ago, those outlying areas were considered high cost. These limits are indexed to inflation and are higher for multi-family dwellings.

Yeah, let's keep this party going, million dollar homes for everybody!

quote:

Originally posted by ninetyninej So much insider trading and over the last 7+ months Countrywide CEO Angelo Mozilo has been churching up the company to the media while dumping stock behind the scenes so fast it'd make Enron or Worldcom exec's heads spin: http://globaleconomicanalysis.blogs...uptions-at.html http://finance.yahoo.com/q/it?s=CFC

It's ok though since mr Mozilo took a pay cut back in May 2007.

Angelo Mozilo, the co-founder of Countrywide Financial Corp., agreed to a pay cut from the $50 million he made in 2006.

quote:

In the past two years, he has received four stock awards totaling 787,694 shares; has exercised options on 13.4 million shares, and has sold shares 254 times. The sales totaled 13.4 million shares for $494,469,881, according to Thomson Financial.

That figure was back in May, he's been very active lately. So he's sold over half a billion dollars worth of shares, way to have such faith in your company mr Mozilo!

Of course, I would probably exercise those options too.

quote:

Originally posted by djGT It's ok though since mr Mozilo took a pay cut back in May 2007. Angelo Mozilo, the co-founder of Countrywide Financial Corp., agreed to a pay cut from the $50 million he made in 2006. That figure was back in May, he's been very active lately. So he's sold over half a billion dollars worth of shares, way to have such faith in your company mr Mozilo! Of course, I would probably exercise those options too.

Perfect quote to add to these articles:

"I would argue that Countrywide is insolvent. Their only asset is their pricing platform, their business algorithm, and that's not working. The next biggest asset they have is the toner for their copiers."

�Joe Mason, CNNMoney in the August 17th

http://money.cnn.com/2007/08/17/rea...sion=2007081712

BNC now gone too...soooo much job loss with all these companies :/

"Lehman Brothers Shuts Down Subprime Unit, Fires 1,200"

http://www.bloomberg.com/apps/news?...qmSw&refer=home

Sorry for leaving the LA/Santa Monica area out of the bubble fun, check out this site and enjoy!

http://westside-bubble.blogspot.com/

quote:

source O.C. real estate consultant John Burns [link added] is telling his clients: �For prices to return to their historical median ratio of housing costs/income, national prices would need to revert back to mid-2004 levels. This would be a 14% correction in price, assuming stable mortgage rates (an iffy assumption at this point). This is not a projection - just a calculation for your information. ... And here�s a look at the top markets in the U.S. and what period�s price level would return these towns to Burns� median affordability equilibrium. (This list is ... Last time at median affordability: Region) ... 2003 Q3: Chicago, IL; Edison, NJ; Los Angeles; Minneapolis, MN; Oakland; Riverside-San Bernardino; Washington D.C. 2003 Q2: Miami, FL 2003 Q1: New York, NY; Orange County; Sacramento 2002 Q2: San Diego

oh look, more rollercoasters!

quote:

Originally posted by ninetyninej Perfect quote to add to these articles: "I would argue that Countrywide is insolvent. Their only asset is their pricing platform, their business algorithm, and that's not working. The next biggest asset they have is the toner for their copiers." �Joe Mason, CNNMoney in the August 17th http://money.cnn.com/2007/08/17/rea...sion=2007081712

Hey, those are very expensive printers!

PC LOAD LETTER? WTF?!!!!111#$@FART%@**&*

Hahaha, that toner quote is priceless! and, I was reading about that Lehman thing too, man that sucks. My buddy starts @ Lehman in the IBD next year, hopefully it will go well. Hopefully investor confidence will continue to rise, so we can get back on track for a decent year. We need some consistent good days like today.

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