S&P More Than Doubles Alt A Mortgage Bonds It May Cut 

Excerpts:

Standard & Poor's said it may lower ratings on bonds from 11 different securitizations of home loans made last year, more than doubling the number of its warnings on bonds of so-called Alt A mortgages. S&P said it's considering the move amid higher-than-anticipated delinquencies.
...
Issuers of the Alt A securities were trusts used by New York-based Bear Stearns Cos., the top underwriter of mortgage bonds; Charlotte, North Carolina-based Bank of America Corp., the largest U.S. bank by assets; and Calabasas, California-based Countrywide Financial Corp., the largest home lender.

Early delinquencies in the bonds may be high because of ``aggressive residential mortgage loan underwriting, first-time home-buyer programs, piggyback second-lien mortgages, speculative borrowing for investor properties, and a higher concentration of `affordability' loans,'' S&P said, referring to loans allowing borrowers to initially pay only interest or less.

So Dow 14,000? August? September?

"So Dow 14,000? August? September?"

Maybe if the Euro rises to two bucks!

Apparently Fannie Mae is starting a pilot program for credit unions with 103% loans.

"CU National Mortgage launched its new Flex-Plus 103 Loan this week from Fannie Mae."

"The program provides borrowers up to 103% financing of their homes to roll in closing costs and other pre-paid charges that can intimidate first time buyers."

Credit Union News - Credit Union Times Magazine

Ugh. Tanta, why would Fannie Mae do this?

Ugh. Tanta, why would Fannie Mae do this?

Because they watched the Royal Bank of Scotland commercials and learned that all the big dogs do what it takes to Make It Happen? Don't be a market hater, be a market maker. We just need to power through these bad loans with some more bad loans because nothing cures the ills of easy money like even more easy money!

why would Fannie Mae do this?

Oh, indeed—if in fact they still are. Anyone find mention of this thing at Fannie's own site? All I can find are a few other news/promo articles, none later than early March; e.g. like here, and this ineffable announcement (PDF), in itself worthy of a post, of a still-upcoming lender convention at Indian Wells. The brochure begins by celebrating a few ruffles and flourishes in honor of partnerships:

"Innovative partnerships have laid the groundwork for some of the world's greatest changes and life altering events. Orville and Wilber Wright. Neil Armstrong and Buzz Aldrin. Bill Gates and Steve Jobs. Edward Filene and Roy Bergengren. Credit Union Members and their Credit Unions. For almost 80 years credit unions have forged powerful partnerships with their members. Partnerships that have improved lives and that have built financial security for generations of families. Partnerships, which for the last 30 years have put members in homes. Yet, in spite of our collective efforts, we all know the industry can ­ and needs ­ to do better to increase credit union market share of home loans. Our symposium is designed to help your credit union do just that."

After another page of bloviation about how the 2007 housing market should be much like the 2004-5 run-up except more, well, tasteful, we learn that all that stuff about partnership was to introduce a special program, Flex-Plus, that Fannie Mae has introduced just for lenders like them:

"The new Flex-PlusTM 103% LTV product: With Flex-Plus, credit unions aligning with Fannie Mae to leverage PrimeAdvantage benefits can offer borrowers a no-money down loan by financing closing costs and prepaids into the loan amount. You'll benefit from a secondary market outlet and aggressive pricing structure that will make Flex-Plus a competitive option in your product mix. Flex-Plus is being offered to Prime Alliance lenders as a special initiative and will require a variance. Please work with your Fannie Mae Customer Account Manager to take advantage of this opportunity."

Oy!