55% DTI
25% taxes (fed, state, social security. I'm probably being conservative here, given the requriement to support fully amortized payments means at least some decent income)
20% income for EVERYTHING else. Car. Food. Medical....
The General Electric-owned WMC Mortgage, Burbank, Calif., a top-ranked subprime lender, on Thursday laid off 50% of its work force -- roughly 771 full-time positions.
BankUnited leader complains of short selling, plans buyback
BankUnited Financial Corp. will use some proceeds from a new capital offering to buy back shares of its stock and possibly to buy other Florida banks.
The company's chairman and chief executive officer, Alfred Camner, described those plans on a Thursday morning conference call with analysts. He also spoke against short sellers he said are trading down BankUnited stock.
Coral Gables-based BankUnited Financial (NASDAQ: BKUNA) "has been approached by a few" potential sellers, Camner said, thought he did not give a timetable for possible acquisitions or mention areas in the state.
But he said: "We think it will happen. We like to pay as little as possible."
BankUnited Financial is the largest banking company based in Florida, with $13.9 billion in assets on March 31. The company's BankUnited subsidiary has 81 branches, all in Florida.
Camner and other BankUnited executives said the company's current share price presents an opportunity. BankUnited, in an offering disclosed Wednesday, is raising $160 million to first be booked as debt and then convert to common stock after three years.
BankUnited is planning to raise $160 million by issuing 3.2 million in equity units at $50 per unit.
Camner said he feels it is "fairly amazing" BankUnited's stock has dropped this year - 24 percent through the first three months -though the bank has been increasing profits, diversifying its businesses and growing in attractive Florida markets.
"We are facing some of the most egregious rumors in the market, by people who have sold our stock short and hammered it down to levels of the S&L crisis," Camner said.
However, that enables BankUnited to buy back shares at low prices, he said.
"I had heard about this about 3 weeks ago that it was coming from some ppl that I knew that still worked there. A lot of them jumped ship before it happened. 771 + the 400-500 they laid off around Feb is a lot of people. When they opened up the huge center in Addison, a lot of people moved there. They opened it up for transfer to anyone...ppl could make similar money, but cost of living was so cheap that a lot of people left..."
"People find out how to game the system to get capital through the least possible regulatory oversight," Prince said. "When that happens, bad people do things to harm our community. ... Very exotic, aggressive mortgage products were pumped into communities where they are not appropriate."
The Citigroup (Charts, Fortune 500) CEO made his remarks at the Greenlining Institute's annual economic summit in Los Angeles.
He said negative amortization mortgages, for example, have had a corrosive effect on communities.
"We need to find a way to close down regulatory arbitrage, fill in the gaps of regulatory oversight," Prince said.
This was on Craiglist(now removed). Do people realize that this is fraud:
"AVAILABLE FOR SALE ARE 2 4000+ SQUARE FT HOMES, 5 BR, 3 BATHS, LOFT,13,000 SQUARE FT LOTS,$147,000 IN UPGRADES ALONE. SELLER IS WILLING TO GIVE THE BUYER $100,000 BACK AT CLOSING. THERE ARE TWO HOMES AVAILABLE FOR A TOTAL OF $200,000 CASH BACK!INVESTORS WELCOME! I HAVE PICS UPON REQUEST."
"This was on Craiglist(now removed). Do people realize that this is fraud:"
Well, there are still people who believe that His Excellency George Mugabe-Smith, Vice Chancellor of the Exechequer of Zambeziland, wants to launder 20 million through their checking accounts and cut them in for 25 percent. (Just read the email..)
Cupidity, stupidity, and ignorance: deadly combination, and oh so common.
For reasons that have nothing to do with anything except that my mother and my aunts used to sing them both, I had to go directly from "Sandman" to "Lollipop." I do love me some Chordettes.
But I'm damned if I'm going to give you guys the opportunity to find something that rhymes with "sugar on a stick." Not on a family blog.
CapitalOne having a rough time AH. I am just short the wrong names...
[... cut its 2007 earnings forecast and reported a 24 percent drop in first-quarter profit on Thursday, citing a surprise loss in a mortgage banking unit it acquired when it paid $13.2 billion for North Fork Bancorp Inc. in December.
... "This is clearly a very challenging time for our mortgage banking business," Capital One Chief Executive Richard Fairbank said on a conference call]
Mozilo must be still holding some shares even after he exercised options for 70,000 shares. Cramer was shilling CFC late today with a buyout price of $45 a share.
God,I love these DTI ratios of 50% plus.yes!PAIN,LOTS OF PAIN,hahahahaha.This paper will be a MUST BUY for everyone who lusts after ann coulter.BTW can i be an Ubernerd,and a MANLY MAN too? I do pack a .45 occassionally,and the neighbors sheep get REAL NERVOUS when i stroll by singing "Blood on the Saddle"...so i'm Definitely a MANLY MAN.but i love your posts!
"Mozilo must be still holding some shares even after he exercised options for 70,000 shares"
It's possible but that does little to instill confidence in CFC when the minute he becomes eligible to exercise his options he exercises every last one. Amazing. The only companies I have seen with this insider trading pattern promptly went BK and many of the insiders went to prison.
Look at how many shares these guys, in particular Mozillo, are selling. It's remarkable.
H&R Block Option One loss on sale going to be bigger than previously thought:
"As previously announced, the Company is in negotiations to sell its Option One Mortgage Corporation subsidiary ("OOMC"). Based on its review of the status of the sale process and the consideration being discussed, on April 15, 2007, the Company's Board of Directors concluded that a material charge for impairment to the Company's investment in OOMC is required under generally accepted accounting principles. The Company will record a non-cash, pre-tax impairment charge in the fourth quarter ending April 30, 2007. If the sale under negotiation proceeds, the Company expects that the impairment charge will be materially greater than OOMC's goodwill which is $152.5 million, and the Company will file an amendment to the Current Report on Form 8-K to provide an estimate of the amount or range of amounts of the impairment charge after it has been finally determined. There can be no assurance that the Company will enter into a definitive agreement for the sale of OOMC as a result of the current negotiations."
Credit standards aren't really tightened until the last lender clams up. It is easy to shop around for a mortgage. We wont see much of an impact from credit tightening until this fall at the earliest.
"BSRM will now require borrowers with non-traditional product loans to qualify based on the fully indexed rate and fully-amortizing payment. "
Maybe I wasn't paying close enough attention at the time, but wasn't it the case that when the new Fed guidance was being debated, and the regulators said it would be a good idea if the lenders did this, the lenders claimed they were already doing it, and so stating it in the regs was unnecessary. I also seem to recall some statements from the OCC, in polite and diplomatic language, calling bullshit on that.
does that mean that Bear doesn't care as much about DTI and thinks it can debt-enslave people, if only it can eliminate some of the surprise upon payment shock?
"does that mean that Bear doesn't care as much about DTI and thinks it can debt-enslave people, if only it can eliminate some of the surprise upon payment shock?
probert | 04.20.07 - 11:31 am | #
probert, the "Real" DTI's were much higher when they were at 50%, since they were calculating it using a payment that wasn't based on reality.
Lets see..
55% DTI
25% taxes (fed, state, social security. I'm probably being conservative here, given the requriement to support fully amortized payments means at least some decent income)
20% income for EVERYTHING else. Car. Food. Medical....
How would this be a good loan to write?
Nicholas, you are forgetting about the magic of the consumption-maximization utility that satisfies present demands with future income, or something.
Merrill Made Record Number of Subprime Home Loans Amid Shakeout
Merrill Made Record Subprime Home Loans Amid Shakeout (Update2) - Bloomberg.com
GE Shocker: WMC Cuts 50% of Work Force
The General Electric-owned WMC Mortgage, Burbank, Calif., a top-ranked subprime lender, on Thursday laid off 50% of its work force -- roughly 771 full-time positions.
National Mortgage News - mortgage industry news | mortgage information | commercial real estate
BankUnited leader complains of short selling, plans buyback
BankUnited Financial Corp. will use some proceeds from a new capital offering to buy back shares of its stock and possibly to buy other Florida banks.
The company's chairman and chief executive officer, Alfred Camner, described those plans on a Thursday morning conference call with analysts. He also spoke against short sellers he said are trading down BankUnited stock.
Coral Gables-based BankUnited Financial (NASDAQ: BKUNA) "has been approached by a few" potential sellers, Camner said, thought he did not give a timetable for possible acquisitions or mention areas in the state.
But he said: "We think it will happen. We like to pay as little as possible."
BankUnited Financial is the largest banking company based in Florida, with $13.9 billion in assets on March 31. The company's BankUnited subsidiary has 81 branches, all in Florida.
Camner and other BankUnited executives said the company's current share price presents an opportunity. BankUnited, in an offering disclosed Wednesday, is raising $160 million to first be booked as debt and then convert to common stock after three years.
BankUnited is planning to raise $160 million by issuing 3.2 million in equity units at $50 per unit.
Camner said he feels it is "fairly amazing" BankUnited's stock has dropped this year - 24 percent through the first three months -though the bank has been increasing profits, diversifying its businesses and growing in attractive Florida markets.
"We are facing some of the most egregious rumors in the market, by people who have sold our stock short and hammered it down to levels of the S&L crisis," Camner said.
However, that enables BankUnited to buy back shares at low prices, he said.
BankUnited leader complains of short selling, plans buyback - South Florida Business Journal:
crispy&cole, here is the full story from the Washington Post.
Error - washingtonpost.com
GE paid top dollar for WMC a few years ago. MORONS!
The previous owners are living fat driving around LA with their Ferrari and Bently...
Email from a "friend" on WMC -
"I had heard about this about 3 weeks ago that it was coming from some ppl that I knew that still worked there. A lot of them jumped ship before it happened. 771 + the 400-500 they laid off around Feb is a lot of people. When they opened up the huge center in Addison, a lot of people moved there. They opened it up for transfer to anyone...ppl could make similar money, but cost of living was so cheap that a lot of people left..."
Slightly OT - (and thanks ml-implode.com -) piece on mozilo dumping stock at 'frenetic pace'
Countrywide CEO Continues to Unload Stock : HousingWire || financial news for the mortgage market
Mr. Tan man, kill me a dream, your housing pump and dump is one nasty a scheme...
just practicing for saturday...
CNNMoney.com: 404 Page Not Found
"People find out how to game the system to get capital through the least possible regulatory oversight," Prince said. "When that happens, bad people do things to harm our community. ... Very exotic, aggressive mortgage products were pumped into communities where they are not appropriate."
The Citigroup (Charts, Fortune 500) CEO made his remarks at the Greenlining Institute's annual economic summit in Los Angeles.
He said negative amortization mortgages, for example, have had a corrosive effect on communities.
"We need to find a way to close down regulatory arbitrage, fill in the gaps of regulatory oversight," Prince said.
Tanta: Sorry, I don't believe I've sacrificed enough chickens for THAT VooDoo economics to actually work for me.
This was on Craiglist(now removed). Do people realize that this is fraud:
"AVAILABLE FOR SALE ARE 2 4000+ SQUARE FT HOMES, 5 BR, 3 BATHS, LOFT,13,000 SQUARE FT LOTS,$147,000 IN UPGRADES ALONE. SELLER IS WILLING TO GIVE THE BUYER $100,000 BACK AT CLOSING. THERE ARE TWO HOMES AVAILABLE FOR A TOTAL OF $200,000 CASH BACK!INVESTORS WELCOME! I HAVE PICS UPON REQUEST."
Tanta,
This is a great find !!!
"This was on Craiglist(now removed). Do people realize that this is fraud:"
Well, there are still people who believe that His Excellency George Mugabe-Smith, Vice Chancellor of the Exechequer of Zambeziland, wants to launder 20 million through their checking accounts and cut them in for 25 percent. (Just read the email..)
Cupidity, stupidity, and ignorance: deadly combination, and oh so common.
Oh, Alo. Mr. Tan Man. You are brilliant.
For reasons that have nothing to do with anything except that my mother and my aunts used to sing them both, I had to go directly from "Sandman" to "Lollipop." I do love me some Chordettes.
But I'm damned if I'm going to give you guys the opportunity to find something that rhymes with "sugar on a stick." Not on a family blog.
Looks like Bear Sterns wants to set up new lending standards starting next quarter.
I think it boils down to one line:
"No Doc and No Doc w/Assets doc types are being capped at 80% LTV/CLTV"
I can imagine what happens with those who...
piece on mozilo dumping stock at 'frenetic pace'
It's interesting that this precedes the earnings report.
It makes one scratch it's head.
"The results [of this paper] suggest that housing booms worsen macroeconomic growth prospects, creating outsized risks of very bad outcomes."
SSRN-Measuring the Macroeconomic Risks Posed by Asset Price Booms by Stephen Cecchetti
Jeez, thanks a lot Easy Al Greenspan!
CapitalOne having a rough time AH. I am just short the wrong names...
[... cut its 2007 earnings forecast and reported a 24 percent drop in first-quarter profit on Thursday, citing a surprise loss in a mortgage banking unit it acquired when it paid $13.2 billion for North Fork Bancorp Inc. in December.
... "This is clearly a very challenging time for our mortgage banking business," Capital One Chief Executive Richard Fairbank said on a conference call]
Mozilo must be still holding some shares even after he exercised options for 70,000 shares. Cramer was shilling CFC late today with a buyout price of $45 a share.
Countrywide up as Cramer says Merrill could buy it
Business & Financial News, Breaking US & International News | Reuters.com
God,I love these DTI ratios of 50% plus.yes!PAIN,LOTS OF PAIN,hahahahaha.This paper will be a MUST BUY for everyone who lusts after ann coulter.BTW can i be an Ubernerd,and a MANLY MAN too? I do pack a .45 occassionally,and the neighbors sheep get REAL NERVOUS when i stroll by singing "Blood on the Saddle"...so i'm Definitely a MANLY MAN.but i love your posts!
"Mozilo must be still holding some shares even after he exercised options for 70,000 shares"
It's possible but that does little to instill confidence in CFC when the minute he becomes eligible to exercise his options he exercises every last one. Amazing. The only companies I have seen with this insider trading pattern promptly went BK and many of the insiders went to prison.
Look at how many shares these guys, in particular Mozillo, are selling. It's remarkable.
Opteum (alt-a) going down?
It's Time To Opt Out of Opteum
Opteum is closing the doors
H&R Block Option One loss on sale going to be bigger than previously thought:
"As previously announced, the Company is in negotiations to sell its Option One Mortgage Corporation subsidiary ("OOMC"). Based on its review of the status of the sale process and the consideration being discussed, on April 15, 2007, the Company's Board of Directors concluded that a material charge for impairment to the Company's investment in OOMC is required under generally accepted accounting principles. The Company will record a non-cash, pre-tax impairment charge in the fourth quarter ending April 30, 2007. If the sale under negotiation proceeds, the Company expects that the impairment charge will be materially greater than OOMC's goodwill which is $152.5 million, and the Company will file an amendment to the Current Report on Form 8-K to provide an estimate of the amount or range of amounts of the impairment charge after it has been finally determined. There can be no assurance that the Company will enter into a definitive agreement for the sale of OOMC as a result of the current negotiations."
Expired
Credit standards aren't really tightened until the last lender clams up. It is easy to shop around for a mortgage. We wont see much of an impact from credit tightening until this fall at the earliest.
I am bit confused here. DTI of 50% seems quite restrictive if it means you need to earn 500,000 to buy 1000,000
Dont you usually only need to earn 333,000 to buy 1000,000 ie 3 times earnings?
There was talk of 12 times earnings in CA.
What am i missing here?
Ah....are we talking Debt/repayment cost to income ratio?
Sorry.....I should have googled it
Debt-To-Income Ratio - DTI financial definition of Debt-To-Income Ratio - DTI. Debt-To-Income Ratio - DTI finance term by the Free Online Dictionary.
Debt payments to income ratio
"BSRM will now require borrowers with non-traditional product loans to qualify based on the fully indexed rate and fully-amortizing payment. "
Maybe I wasn't paying close enough attention at the time, but wasn't it the case that when the new Fed guidance was being debated, and the regulators said it would be a good idea if the lenders did this, the lenders claimed they were already doing it, and so stating it in the regs was unnecessary. I also seem to recall some statements from the OCC, in polite and diplomatic language, calling bullshit on that.
does that mean that Bear doesn't care as much about DTI and thinks it can debt-enslave people, if only it can eliminate some of the surprise upon payment shock?
"does that mean that Bear doesn't care as much about DTI and thinks it can debt-enslave people, if only it can eliminate some of the surprise upon payment shock?
probert | 04.20.07 - 11:31 am | #
probert, the "Real" DTI's were much higher when they were at 50%, since they were calculating it using a payment that wasn't based on reality.