They claim that it is becoming increasingly clear that the risks are somewhat contained and "Thus far, delinquencies and foreclosures have been limited to the sub-prime market
as far as investors:
"investors right now are getting increasingly comfortable with that situation and it will not spread to the broader economy.
This is the big issue. Are they correct or dead wrong ? no two ways about it.
Watching CNBC is cardiovascular exercise, not intellectual stimulation. You learn less than nothing, but you do get that jolt to the old blood pressure. (Unless, of course, you've developed advanced meditiation techniques to keep yourself from stressing out over bird-wittery.)
``I told the bank to come get the keys and just let me know when we need to be out, but they said why not put it up for sale and we might be able to work something out...
Homeowners such as the Rhode Island couple are finding their mortgage companies eager to accept a sale price that falls short of a property's loan balance -- a so-called mortgage short sale. The number of U.S. loans entering foreclosure reached an all-time high in the fourth quarter, according to the Washington-based Mortgage Bankers Association. That's spawning a cottage industry of real estate investors who profit as lenders try to avoid adding properties to their portfolios. ....
Lenders have become more forgiving in the last few months because defaults are rising, and they're not in the business of owning houses,'' Alford said.Trying to put that kind of deal together a year ago was a waste of time because banks weren't interested in a buyback.''
Historically, only about 25 percent of mortgages that are delinquent end up in foreclosure. Some are resolved through a short sale and others result in a ``deed in lieu of foreclosure'' in which the owner surrenders the deed without a foreclosure and the bank ends up as a property owner
Thus foreclosures stats, must be multiple by some factor(4?) to determine the real stress on the market.
IMHO, if the RE bust continues, then these investors will have problems if they are leveraged wrong.
As a short seller (and more important as a put holder) I can't help wonder how long before those guys would be proven wrong. Of course it could be me that is wrong and it will cost me. (or I can be right but it will take too long to bge proven right - in any case I loose)
It probably depends Yal. Slightly OT but, according to one of Tanta's favorite companies, Clayton Holdings that does loan forensics, that was the subject of a CNN article it sounds like things are bad because folks got greedy and sloppy. No great insights in the article, but a couple of funny anecdotes.
"Of course, not every client acts on Clayton's advice. One, whom the company declines to name, has been scarfing up about 60 percent of the loans that Clayton said weren't up to snuff. "Everyone reached for volume," says Frank Filipps, Clayton's CEO. "In the last 18 months, a lot of the loans that were purchased didn't meet the buyer's own standards."
After securitization, Clayton monitors the performance of the loans - some $419 billion all told - and conducts autopsies on every mortgage that dies (internally, that business is nicknamed CSI Subprime).
If the investigator finds any problems that violate guarantees made by the originator of the loan, the client can put it back to the lender. In fact, one big reason why subprime lender New Century Financial is failing is the number of poorly originated loans it has had to eat.
Lately, Clayton is finding more and more delinquencies as a result of fraud, rather than the usual death and divorce hardships of life."
...
"The con that will no doubt go down in company history involved a delinquent borrower who signed his loan paperwork as - you're gonna love this - M. Mouse. Yes, that's M as in Mickey.
"The originator bought it back," says Kevin Kanouff, who heads up the surveillance part of Clayton's business. "That would have been a tough one to refute.""
Is CNBC a threat to your cardiovascular system, or what remains of your physiological apparatus that remains slumped in that posture as if to make a hasty retreat to Homo Erectus (or Larson Early Man prototypes that you just know would have been better)?
Serious note from my little bugle: note how unresilient ARM mortgages are to the recent sup-prime and more lending troubles.
This company had a big craigslist ad for LO etc this morning:
Quality Loan Service provides non-judicial foreclosure processing in several Western States. QLS provides the most efficient time-line processing in the industry through use of state of the art software combined with seasoned veterans throughout the company. It would be our pleasure to discuss your specific non-judicial foreclosure related needs at any time. Please feel free to contact us at 619.645.7711.
Anthony Fleming, I don't know about FMT. LEND however, is another story. Their chief product is subprime loans to the secodary maket. It's clear there is no appetite for their product unless they discount it so heavily that they lose money on it. I wonder if it's possible to get their value based on the premise that they become only a loan servicer and exit the lending business for a long time.
If you are interested in economy CNBC is a waste of time.
If you trade you have to watch them as they represent the majority of investors and it's where you can feel the mood of the street. Fighting the trend is always bad for your pocket. Who cares that you were right if you lost your money?
Im,
Could be recent buyers have had no appraisal increase and no easier lending terms to move from their existing mortgage (certainly short term ARMs), so a refi is prohibitive. But if your last appraisal was 2003 or earlier, a refi could still provide you with immediate cash above those fees, but of course with a higher new principal and higher payments...that you don't care about because you know the market will correct by the next time you have to refi...or so you hope like hell. This pool of eligible refiers is shrinking and will continue to shrink as housing values drop, no?
This: Analysts Say Sub-Prime Mortgage Woes Unlikely To Spread - CNBC is really the key issue.
They claim that it is becoming increasingly clear that the risks are somewhat contained and "Thus far, delinquencies and foreclosures have been limited to the sub-prime market
as far as investors:
"investors right now are getting increasingly comfortable with that situation and it will not spread to the broader economy.
This is the big issue. Are they correct or dead wrong ? no two ways about it.
Watching CNBC is cardiovascular exercise, not intellectual stimulation. You learn less than nothing, but you do get that jolt to the old blood pressure. (Unless, of course, you've developed advanced meditiation techniques to keep yourself from stressing out over bird-wittery.)
Housing Short Sales Increasing
March 21 (Bloomberg) -- ....
``I told the bank to come get the keys and just let me know when we need to be out, but they said why not put it up for sale and we might be able to work something out...
Homeowners such as the Rhode Island couple are finding their mortgage companies eager to accept a sale price that falls short of a property's loan balance -- a so-called mortgage short sale. The number of U.S. loans entering foreclosure reached an all-time high in the fourth quarter, according to the Washington-based Mortgage Bankers Association. That's spawning a cottage industry of real estate investors who profit as lenders try to avoid adding properties to their portfolios. ....
Lenders have become more forgiving in the last few months because defaults are rising, and they're not in the business of owning houses,'' Alford said.Trying to put that kind of deal together a year ago was a waste of time because banks weren't interested in a buyback.''
Historically, only about 25 percent of mortgages that are delinquent end up in foreclosure. Some are resolved through a short sale and others result in a ``deed in lieu of foreclosure'' in which the owner surrenders the deed without a foreclosure and the bank ends up as a property owner
Thus foreclosures stats, must be multiple by some factor(4?) to determine the real stress on the market.
IMHO, if the RE bust continues, then these investors will have problems if they are leveraged wrong.
Tanta: Absolutly. this is the answer to CNBC: Vipassana Meditation Website
As a short seller (and more important as a put holder) I can't help wonder how long before those guys would be proven wrong. Of course it could be me that is wrong and it will cost me. (or I can be right but it will take too long to bge proven right - in any case I loose)
It probably depends Yal. Slightly OT but, according to one of Tanta's favorite companies, Clayton Holdings that does loan forensics, that was the subject of a CNN article it sounds like things are bad because folks got greedy and sloppy. No great insights in the article, but a couple of funny anecdotes.
CSI: Subprime - Mar. 20, 2007
...
"Of course, not every client acts on Clayton's advice. One, whom the company declines to name, has been scarfing up about 60 percent of the loans that Clayton said weren't up to snuff. "Everyone reached for volume," says Frank Filipps, Clayton's CEO. "In the last 18 months, a lot of the loans that were purchased didn't meet the buyer's own standards."
After securitization, Clayton monitors the performance of the loans - some $419 billion all told - and conducts autopsies on every mortgage that dies (internally, that business is nicknamed CSI Subprime).
If the investigator finds any problems that violate guarantees made by the originator of the loan, the client can put it back to the lender. In fact, one big reason why subprime lender New Century Financial is failing is the number of poorly originated loans it has had to eat.
Lately, Clayton is finding more and more delinquencies as a result of fraud, rather than the usual death and divorce hardships of life."
...
"The con that will no doubt go down in company history involved a delinquent borrower who signed his loan paperwork as - you're gonna love this - M. Mouse. Yes, that's M as in Mickey.
"The originator bought it back," says Kevin Kanouff, who heads up the surveillance part of Clayton's business. "That would have been a tough one to refute.""
Is CNBC a threat to your cardiovascular system, or what remains of your physiological apparatus that remains slumped in that posture as if to make a hasty retreat to Homo Erectus (or Larson Early Man prototypes that you just know would have been better)?
Serious note from my little bugle: note how unresilient ARM mortgages are to the recent sup-prime and more lending troubles.
This company had a big craigslist ad for LO etc this morning:
Quality Loan Service provides non-judicial foreclosure processing in several Western States. QLS provides the most efficient time-line processing in the industry through use of state of the art software combined with seasoned veterans throughout the company. It would be our pleasure to discuss your specific non-judicial foreclosure related needs at any time. Please feel free to contact us at 619.645.7711.
So how long can Fremont and Accredited Home last with these infusions of cash?
Subprime jitters subside as funding found
Subprime jitters subside as funding found
| Reuters
Is refi activity reduction related with stagnant home prices?
Anthony Fleming, I don't know about FMT. LEND however, is another story. Their chief product is subprime loans to the secodary maket. It's clear there is no appetite for their product unless they discount it so heavily that they lose money on it. I wonder if it's possible to get their value based on the premise that they become only a loan servicer and exit the lending business for a long time.
Mortgage apps are down, just like permits, starts and new home sales.
Yet none of the industry insiders wants to admit what can happen next:
http://www.viewfromsiliconvalley.com/id315.html
See these actual government-published facts for yourself.
If you are interested in economy CNBC is a waste of time.
If you trade you have to watch them as they represent the majority of investors and it's where you can feel the mood of the street. Fighting the trend is always bad for your pocket. Who cares that you were right if you lost your money?
Im,
Could be recent buyers have had no appraisal increase and no easier lending terms to move from their existing mortgage (certainly short term ARMs), so a refi is prohibitive. But if your last appraisal was 2003 or earlier, a refi could still provide you with immediate cash above those fees, but of course with a higher new principal and higher payments...that you don't care about because you know the market will correct by the next time you have to refi...or so you hope like hell. This pool of eligible refiers is shrinking and will continue to shrink as housing values drop, no?