actually let me rephrase what I said it is contained to Ben Bernanke's pants as he sh*** himself realizing he is powerless and his whole study in academia on the reasons for the depression are fraud.
You have to love irony.
It was a psychological shift away from leverage and debt then that popped the bubble, and it is the same today. The austrian's have it right.
Rumor also has it that the Federal Reserve is going to drastically increase the amount of money available through the TAF (Term Auction Facility.)
Will T | 03.06.08 - 11:40 pm | #
I have a question for Tanta and others more knowledgeable than myself:
With all the talk about the new conforming limits today (just raised to $729k where I am!), I am left somewhat confused. Why does everyone seem to think that calling a loan "conforming" somehow magically changes the risk profile associated with that loan? Won't investors still demand whatever might be deemed the appropriate amount of compensation for the amount of risk? Does it really change anything to call these loans "conforming"? Or, does simply labeling these loans "conforming" actually require the GSEs to treat them somehow more favorably than they otherwise would?
...especially in light of what is going on in the credit/mortgage/debt markets. Honestly, I don't get it.
Charlie,mostly it gave realtors and loan brokers hope for a few months.I am sure some renewed their NAR memberships knowing that this would rescue the market...I have been assured by more than one broker that this is a certainty.and happily it WAS only a cold sore.
New conforming limits are great! But did anyone notice that Fairfield County Connecticut, home of Greenwich, Darien, Westport, Weston and Wilton, gets a limit slightly lower than the maximum? This might be the wealthiest county in the whole USA!
Somebody in the government sure doesn't like Connecticut.
Credit is getting worse. But I wonder if housing has bottomed.
Got gold or Euros? An interesting but disgusting quote from tomorrow's Grant's Interest Rate Observer:
"As long as you're pumping out money at a faster rate than demand for money is rising, you're going to stimulate spending", the then-president of the Federal Reserve Bank of Dallas gaily said in early 2003. "I think it would be kind of fund to fight deflation, actually."
Can you imagine a member of the ECB saying such a thing?
I've stopped reading the MSM "awakenings" re: the credit and price debacles.
For MSM, it's "news". For the longer term participants in the blogs on this topic, this is what was expected, and it's not all of what was expected.
I yet expect Citi to finally be recognized as BK (and earn my dinner).
We know what's coming next. CR continues to be conservatively pessimistic; he's off a few degrees, IMO.
It's not time to enjoy the "unhinged" malarky. There's yet much more to be destroyed, evaporated, and reaped from this debacle. We yet have years of this booked for the near term, and afterwards, there will be the long, flat, tapped out economic desert. It's ending needs to be considered. So does an assessment of what the markets will be like so those of us who will have plenty of our stores of value left at that time can make wise strategic decisions. The earliest to act, like in Defoe's book on the English plague, will likely become infected with the disease termed by all of us as "poor decisions" and they too will perish economically. When it ends, there will be plenty of opportunities for those who are exceedingly cautious today.
Fascinatingly, the reality of what's happening has not affected those who consider themselves immune. They're still at the bars cavorting, in places like Palo Alto and La Jolla, and probably the Big Apple. When the credit freeze blows in, the partying will drop to only those in the top few percent whose wealth can't be impacted enough for the party to stop; but for those of us who are economic men, the weather will support our self-protective posturing.
Oh, BTW, rant over.
Sorry, no bottom in sight. The "recession" hasn't even really hit yet. You think housing's going to stabilize just as the economy's turning vengefully south?
Wonder if the Fed is going to increase money supply, or the TAF injections will continue to be sterilized by corresponding tightening Open Market Operations?
This transfer of generally circulating money to the banks is a straight prop-up of those banking businesses. Much more of this and Congress should have a look at it.
tj the financial companies are in trouble like they haven't seen since the 30's. But the industrial sector (excluding neologisms like the "financial industry") is doing OK, even better with USD depreciation. They have enough cash on average to erase the liability side of their balance sheets! As Consumers Struggle to Save, Companies Are Piling Up Cash - NY Times
``There is a trend in all global credit markets for people to avoid buying credit''
said Mana Nakazora, chief credit analyst at JPMorgan Securities Japan Co. Hedge-fund closures may be prompting managers to repurchase credit-default swaps they previously sold, she said.
You wonder why with more detail about foreclosure numbers percolating up.
Detroit Free Press:
"Michigan ranked second nationally with 8.97% of its home loans delinquent during the three months ended Dec. 31. Mississippi was first with 11% of delinquent loans and Georgia was third with 8.37%.
Michigan ranked third when it came to foreclosure inventory with 3.38% and third based on foreclosure starts with 1.29% during the quarter." freep.com | | Detroit Free Press
If conforming loan amount limits are raised than the GSEs can buy jumbo "prime" loans.
If they buy those loans then those that own a ton of those loans can sell them and reduce their leverage in a more orderly fashion compared to a forced liquidation.
Buying and selling will increase in those loans (with GSEs buying) and pricing may be shored up.
Borrowers would be able to borrow and/or refinance.
Banks may not need to hoard as much capital in anticipation of taking write downs on the market value of such loans. That capital could then be lent out to small and mid size businesses that need it.
These jumbo loans however are just one flavor of an assortment of debt, IOUs that many parties, includes many large money center banks, are gorged on.
Think of the financial system as a body with fat deposits and blood clots.
Liquidity--money flowing freely--is blood.
Main Street are the extremities. If extremities can't get blood, they can die, starved of oxygen and nutrients.
Those lucky enough to have blood banks--the Buffets--are waiting for the right price. If prices fall far enough, someone will take a risk and spend their blood because the returns will look attractive.
Example: the Port Authority of NY/NJ could not roll over its debt at a monthly auction and it had to pay a steeper interest rate under a preexisting agreement. But that steeper rate lured fresh money (blood) buy its debt.
But if losses are not taken, if they are not forced to be taken, then prices will not fall, fresh money won't appear, and the market for ________ will stay...frozen.
Wait a minute ... I can nod at O-joe's assertions that things will be fine, and we're all crazy... I can shrug at Sebastian's sticking with his Wright Model B...
"a man believes what he wants to believe, and disregards the rest.."
BUT ... No way does Conjure Bag post by himself, without mp.
I was going for an oversimplified stab at the rationale. I shied away from going further than that.
But it's not lost upon me that every player has the same plan: to sell to the GSEs. It struck me as being a variation of an overbuilt industry with every player saying that they will be the last man standing.
Plus the 2007 vintage Alt-a Option ARM delinquency rate rising.
I don't see how things improve without somebody large blowing up. American zombie banks a la Japan 1990s? I can't see it.
And I think the momentum of deleveraging has gathered steam, the fuse is lit.
Bernanke says lenders have to eat it w/r/t principal write downs?
No offense, but I think that question demonstrates how far from reality we've gotten.
It's not the Fed's or the government's job to get capital to anyone. They're the problem, not the solution.
Now, as mp has noted, they can be part of the solution. Trust must be re-established, not through "backstops" but through regulatory-enforced transparency. Once everyone knows where they really stand, true money will find it's way where it's most efficiently employed.
The 60 Minute Chart shows the Dow performed a textbook "Kiss of Death" pattern over the last two days, as the index broke the major triangle to the downside and then bounced higher to test the breakout point before dropping to new lows. This pattern can typically be a precursor to big weakness ahead, especially if the major 12,000 level is crossed. This level has held firmly over the last six weeks, meaning that a break could spark heavy selling ahead.
Collateral Call Goes Unanswered
An Alabama county rebuffed four banks' demands to pay $200 million to back a derivatives trade gone bad. A series of recent events has strained Jefferson County finances, triggering the banks to call for an increase in collateral related to the swap agreements.
They should do an Argentina and tell the banks "Can't pay! Won't pay!"
Since the financing was to pay for their sewer system, back up four dump trucks to their sewage plants, load 'em up, drive to NYC, and dump the contents in the bank HQ lobby, if the banksters want to play tough.
Definition of DCC and DSA
A debt cancellation contract ("DCC") or a debt suspension agreement ("DSA") is an agreement between a lender and a borrower, usually for a fee, which is typically separate from and in addition to interest or other charges, under which the lender agrees to either cancel or suspend for a specified period of time the borrowers obligation incurred under the debt instrument upon the happening of a specified event. A specified event may include death, disability, or involuntary employment of the borrower or other event that may reasonably be expected to affect the ability of the borrower to repay the loan.
This has been discussed here before and maybe is self evident but the plans to 'rework' existing mortgages into more favorable terms for the home owners - be they mortgage freezes, rate reductions, refinance, whatever - overlook the notion of who/how they will be processed.
Think about it. The troubled mortgages were, for the most part, processed 'in bulk' by originators utilizing a volume driven model. In effect many of the applications were in essence 'rubber stamped' with little regard to providing 'full documentation'. In the best of times - assuming that little work would be required in servicing these mortgages - the servicing capacity was spread thin. Many of the companies initially servicing those mortgages have gone BK. Over time the mortgages were consolidated into the hands of fewer qualified services. Now imagine that there is a sudden surge in requests to rework those mortgages into some semblance of shape such that they are acceptable to the mortgage holder - given the expectations of todays mortgage market. I just don't see it happening...
As for the GSE jumbo loans..well, I think that when all is said and done it boils down to business as usual for the borrower. By the time the GSEs are in a position to process the loans and have added on the appropriate uplift (depending on the borrowers qualifications) the borrower might as well have gone with a traditional jumbo.
Goldman strikes gold with subprime auto loans (no docs?)
THE SERVICER AND SPONSOR
Triad Financial Corporation is a California corporation, wholly-owned by Triad Holdings Inc. Certain affiliates of Goldman, Sachs & Co., GTCR Golder Rauner, L.L.C. and Hunters Glen/Ford Ltd., which we collectively refer to as the equity sponsors, are indirect equityholders of Triad Holdings Inc. Triad was incorporated in California on May 19, 1989. Triad originates or purchases and services automobile loans. Triads executive offices are located at 7711 Center Avenue, Suite 100, Huntington Beach, California 92647 and its telephone number is (714) 373-8300. For more information regarding Triad, see The Sponsor and Servicer in the accompanying prospectus.
Triad Financial Special Purpose LLC, et al. · 424B5 · On 11/20/07
Re:
Freedom Financial Group Inc. announced that it has signed a $15 million, two-year, revolving credit facility with the ReMark Capital Group LLC, an affiliate of the Goldman Sachs Group Inc. The agreement was signed January 31, 2008. The facility is secured by automobile receivables originated by FFG in the Midwest. The credit facility will pay off an existing Heartland Bank loan while allowing expansion of FFG activities. The Company is the successor of Stevens Financial Group Inc., which filed for Chapter 11 bankruptcy in March, 2001 and emerged as a public corporation in January 2003. Falconbridge Capital Markets of Dallas Texas, advised FFG in connection with this transaction.
Lumpinvestor:
Yeah. Can't believe they're building even ONE new home up in Oregon or Washington. I have two small infill developments on my wooded street, cleared.... and now stalled.
Half a mile away in Lake Oswego (posh), two, million dollar home sites cleared, but now up for sale. No more construction. About 2.5 miles south, Wilsonville West Linn border, a farm site, couple hundred homes planned... site half levelled, terraced (on a hill), pipe laid... construction trailer offices there.... chain link fence, gate now locked.
In between, ten acre development still building ... they had to throw out the old people who lived in trailers, to build this mcmansion neighborhood ... still building... until oblivion, I guess. God, I can't wait for these guys to go out of business.
And an idiot bought the 750k Mcmansion next door to me. Turns out (at least feign surprise) .. he's a mortgage broker!
It gets better. I looked up where this place was, exactly. Look up the nearby town of Orting, WA in wikipedia. Not a grand endorsement for a safe place to live.
Howdy... I'm on the West Coast and on vacation tomorrow... what's your excuse? Trying to figure out if California legislators are really serious about closing the "loophole" of the mortgage interest deduction, and why I haven't seen Rob Dawg harp on it lately. I also can't sleep because of the hypocrisy of the head of California Senate saying, "we need your tax money to help school the children!". Hey buddy, I have children, what about them?!? At least this guy had the decency to suggest raising taxes as his solution to the budget problem... basically saying "We have a money problem, we need more money... raise taxes... that's the solution... there I said it." Free country my 88!
I'm in Georgia. I've been getting up at 3:30 AM every day since 1998 to work on my crank in the basement project before going into my day-job. Saving the world damnit! (pissing into the coffee can)
First!!
Fraudster!
I have the assurance of the Canadian ambassador that we should take these reports with a grain of salt.
Ambac raises $1.5 billion
Or so says a "source".
Asia Stocks Set for Biggest Drop Since August
Asian Stocks Have Biggest Weekly Drop Since August; BHP Falls - Bloomberg.com
it is so totally not about a psychological shift away from risk because the FED and Govt and everyone are powerless against that.
It is contained, because the FED and gov and wall street can do something about that.
actually let me rephrase what I said it is contained to Ben Bernanke's pants as he sh*** himself realizing he is powerless and his whole study in academia on the reasons for the depression are fraud.
You have to love irony.
It was a psychological shift away from leverage and debt then that popped the bubble, and it is the same today. The austrian's have it right.
Woooooooooooooooops!
Just read about Citi and the Arabs comments that they have to come up with more cash (ri-i-i-g-ht). I think that they're enjoying this.
If Citi can cobble together enough cash for this, they'll probably want Rubin to take a fling at pole-dancing.
BTW, can somebody toss $16 billion California's way so Arnie doesn't have to fire all of our teachers? Kthxbai....
Kthxbai....
And that was what???
Rumor has it that Fannie Mae will have the mother of all writedowns soon.
Rumor also has it that the Federal Reserve is going to drastically increase the amount of money available through the TAF (Term Auction Facility.)
Rumor also has it that the Federal Reserve is going to drastically increase the amount of money available through the TAF (Term Auction Facility.)
Will T | 03.06.08 - 11:40 pm | #
They probably got more where that came from...
And that was what???
homedad43 | 03.06.08 - 11:38 pm | #
That's "LOL-speak"
TAF, a trillion here, a trillion there and someday it's a quadrillion...
I have a question for Tanta and others more knowledgeable than myself:
With all the talk about the new conforming limits today (just raised to $729k where I am!), I am left somewhat confused. Why does everyone seem to think that calling a loan "conforming" somehow magically changes the risk profile associated with that loan? Won't investors still demand whatever might be deemed the appropriate amount of compensation for the amount of risk? Does it really change anything to call these loans "conforming"? Or, does simply labeling these loans "conforming" actually require the GSEs to treat them somehow more favorably than they otherwise would?
...especially in light of what is going on in the credit/mortgage/debt markets. Honestly, I don't get it.
I rarely drink anymore, although the present circumstances are tempting.
I'm off to a large glass of water and two ibuprofen...all from one beer.
Boy, am I a lightweight.
Tomorrow, Hop Devil.
Charlie,mostly it gave realtors and loan brokers hope for a few months.I am sure some renewed their NAR memberships knowing that this would rescue the market...I have been assured by more than one broker that this is a certainty.and happily it WAS only a cold sore.
Kthxbai = OK. Thanks. Bye.
Oh and check out "The Institutional Risk Analyst" if your schadenfreude is wearing off.
New conforming limits are great! But did anyone notice that Fairfield County Connecticut, home of Greenwich, Darien, Westport, Weston and Wilton, gets a limit slightly lower than the maximum? This might be the wealthiest county in the whole USA!
Somebody in the government sure doesn't like Connecticut.
Credit is getting worse. But I wonder if housing has bottomed.
Credit is getting worse. But I wonder if housing has bottomed.
Come again?
Well, resales were flat to last month, not down. We'll see if next month is stronger or weaker than this month. All I can say is, it's a feeling.
Got gold or Euros? An interesting but disgusting quote from tomorrow's Grant's Interest Rate Observer:
"As long as you're pumping out money at a faster rate than demand for money is rising, you're going to stimulate spending", the then-president of the Federal Reserve Bank of Dallas gaily said in early 2003. "I think it would be kind of fund to fight deflation, actually."
Can you imagine a member of the ECB saying such a thing?
I've stopped reading the MSM "awakenings" re: the credit and price debacles.
For MSM, it's "news". For the longer term participants in the blogs on this topic, this is what was expected, and it's not all of what was expected.
I yet expect Citi to finally be recognized as BK (and earn my dinner).
We know what's coming next. CR continues to be conservatively pessimistic; he's off a few degrees, IMO.
It's not time to enjoy the "unhinged" malarky. There's yet much more to be destroyed, evaporated, and reaped from this debacle. We yet have years of this booked for the near term, and afterwards, there will be the long, flat, tapped out economic desert. It's ending needs to be considered. So does an assessment of what the markets will be like so those of us who will have plenty of our stores of value left at that time can make wise strategic decisions. The earliest to act, like in Defoe's book on the English plague, will likely become infected with the disease termed by all of us as "poor decisions" and they too will perish economically. When it ends, there will be plenty of opportunities for those who are exceedingly cautious today.
Fascinatingly, the reality of what's happening has not affected those who consider themselves immune. They're still at the bars cavorting, in places like Palo Alto and La Jolla, and probably the Big Apple. When the credit freeze blows in, the partying will drop to only those in the top few percent whose wealth can't be impacted enough for the party to stop; but for those of us who are economic men, the weather will support our self-protective posturing.
Oh, BTW, rant over.
Sorry, no bottom in sight. The "recession" hasn't even really hit yet. You think housing's going to stabilize just as the economy's turning vengefully south?
GaudiaRay,
Nice rant.
Wonder if the Fed is going to increase money supply, or the TAF injections will continue to be sterilized by corresponding tightening Open Market Operations?
This transfer of generally circulating money to the banks is a straight prop-up of those banking businesses. Much more of this and Congress should have a look at it.
Oh, and that Dallas Fed president was Bob McTeer, who appears on Kudlow with some regularity.
Behold the Beast...
Bernanke vs. The Credit Monster
Run, Ben, Run!
tj the financial companies are in trouble like they haven't seen since the 30's. But the industrial sector (excluding neologisms like the "financial industry") is doing OK, even better with USD depreciation. They have enough cash on average to erase the liability side of their balance sheets!
As Consumers Struggle to Save, Companies Are Piling Up Cash - NY Times
artichoke,
Yes, read that article a day or so ago. Highly unlikely the industrial sector's going to be buying houses, though.
Companies are stockpiling cash to survive a downturn, not to expand hiring or capex.
Zen and The Art of Fixed Income Trading Quote;
``There is a trend in all global credit markets for people to avoid buying credit''
said Mana Nakazora, chief credit analyst at JPMorgan Securities Japan Co. Hedge-fund closures may be prompting managers to repurchase credit-default swaps they previously sold, she said.
GaudiaRay, I especially like this part.\t
"When it ends, there will be plenty of opportunities for those who are exceedingly cautious today."
GaudiaRay
"Fascinatingly, the reality of what's happening has not affected those who consider themselves immune."
So true & sad.
Topher,
Sort of Dave Ramsey-ish:
Live like no one else right now,
so later you can live like no one else.
I particularly like this part:
We yet have years of this booked for the near term, and afterwards, there will be the long, flat, tapped out economic desert.
That's the American way.
NIKKEI diving in the final hour of trading, currently -429.42
Going to be an interesting day tomorrow for sure.
Just for fun what do you guess for the Dow & S&P by end of 2009?
Let's just say that you'll be able to buy the DOW with an Eagle.
You wonder why with more detail about foreclosure numbers percolating up.
Detroit Free Press:
"Michigan ranked second nationally with 8.97% of its home loans delinquent during the three months ended Dec. 31. Mississippi was first with 11% of delinquent loans and Georgia was third with 8.37%.
Michigan ranked third when it came to foreclosure inventory with 3.38% and third based on foreclosure starts with 1.29% during the quarter."
freep.com | | Detroit Free Press
Jobless Rate in U.S. Probably Rose...
Jobless Rate in U.S. Probably Rose to Two-Year High (Update1) - Bloomberg.com
Ill bet theyll be up, down or flat. Night all.
Next stop, DJIA 11,500.
CB,
That's just for tomorrow, right?
tj,
The DOW for an Eagle on 1/1/10? That's a bit over the top, don't ya think?
A few Eagles maybe...
Lot's of these interesting days for the U.S. stock market tomorrow never come. They start, they stop, they reverse to nearly neutral.
I am afraid that one days we start getting the 300, 400, 500 point drops.
The screaming then for bail-outs will be deafening.
I may be wrong, but I'm not changing my call.
Remember, they're both moving toward each other, at likely increasing speeds.
The screaming then for bail-outs will be deafening.
Yeah, but who do you save when everyone is screaming?
Could be more like "I Am Legend" where they decide to blow the bridges to try and contain the damage(d).
"Yeah, but who do you save when everyone is screaming?"
Yourself.
charlie,
If conforming loan amount limits are raised than the GSEs can buy jumbo "prime" loans.
If they buy those loans then those that own a ton of those loans can sell them and reduce their leverage in a more orderly fashion compared to a forced liquidation.
Buying and selling will increase in those loans (with GSEs buying) and pricing may be shored up.
Borrowers would be able to borrow and/or refinance.
Banks may not need to hoard as much capital in anticipation of taking write downs on the market value of such loans. That capital could then be lent out to small and mid size businesses that need it.
These jumbo loans however are just one flavor of an assortment of debt, IOUs that many parties, includes many large money center banks, are gorged on.
Think of the financial system as a body with fat deposits and blood clots.
Liquidity--money flowing freely--is blood.
Main Street are the extremities. If extremities can't get blood, they can die, starved of oxygen and nutrients.
Those lucky enough to have blood banks--the Buffets--are waiting for the right price. If prices fall far enough, someone will take a risk and spend their blood because the returns will look attractive.
Example: the Port Authority of NY/NJ could not roll over its debt at a monthly auction and it had to pay a steeper interest rate under a preexisting agreement. But that steeper rate lured fresh money (blood) buy its debt.
But if losses are not taken, if they are not forced to be taken, then prices will not fall, fresh money won't appear, and the market for ________ will stay...frozen.
blowncue,
Did you read the FNM jumbo guidelines? Highly unlikely they'll be buying much.
Geez, even the NIKKEI has it's last half hour pump monkeys, but it's still going to close nearly 400 down.
"Highly unlikely they'll be buying much."
Agreed. It's a waste of time.
Typical political move -- all show, no go. And you wonder why I'm so cynical...
Good Night and Good Luck.
GNAGL2U2. Say hi to mp for me!
Wait a minute ... I can nod at O-joe's assertions that things will be fine, and we're all crazy... I can shrug at Sebastian's sticking with his Wright Model B...
"a man believes what he wants to believe, and disregards the rest.."
BUT ... No way does Conjure Bag post by himself, without mp.
TJ & The Bear:
I was going for an oversimplified stab at the rationale. I shied away from going further than that.
But it's not lost upon me that every player has the same plan: to sell to the GSEs. It struck me as being a variation of an overbuilt industry with every player saying that they will be the last man standing.
Plus the 2007 vintage Alt-a Option ARM delinquency rate rising.
I don't see how things improve without somebody large blowing up. American zombie banks a la Japan 1990s? I can't see it.
And I think the momentum of deleveraging has gathered steam, the fuse is lit.
Bernanke says lenders have to eat it w/r/t principal write downs?
Then how does he get capital to Main Street?
how does he get capital to Main Street?
He prints cash & sends it to the banks
Then how does he get capital to Main Street?
No offense, but I think that question demonstrates how far from reality we've gotten.
It's not the Fed's or the government's job to get capital to anyone. They're the problem, not the solution.
Now, as mp has noted, they can be part of the solution. Trust must be re-established, not through "backstops" but through regulatory-enforced transparency. Once everyone knows where they really stand, true money will find it's way where it's most efficiently employed.
NIKKEI closed -405.76 at 12,809.66; other Asian markets also off 2% to 3%. Next up, Europe!
No offense taken.
But I must get long sleep.
The 60 Minute Chart shows the Dow performed a textbook "Kiss of Death" pattern over the last two days, as the index broke the major triangle to the downside and then bounced higher to test the breakout point before dropping to new lows. This pattern can typically be a precursor to big weakness ahead, especially if the major 12,000 level is crossed. This level has held firmly over the last six weeks, meaning that a break could spark heavy selling ahead.
Collateral Call Goes Unanswered
An Alabama county rebuffed four banks' demands to pay $200 million to back a derivatives trade gone bad. A series of recent events has strained Jefferson County finances, triggering the banks to call for an increase in collateral related to the swap agreements.
Crunch, From Alabama to Stocks - WSJ.com
or
TinyURL.com - shorten that long URL into a tiny URL
They should do an Argentina and tell the banks "Can't pay! Won't pay!"
Since the financing was to pay for their sewer system, back up four dump trucks to their sewage plants, load 'em up, drive to NYC, and dump the contents in the bank HQ lobby, if the banksters want to play tough.
Is Countrywide offering these yet?
Definition of DCC and DSA
A debt cancellation contract ("DCC") or a debt suspension agreement ("DSA") is an agreement between a lender and a borrower, usually for a fee, which is typically separate from and in addition to interest or other charges, under which the lender agrees to either cancel or suspend for a specified period of time the borrowers obligation incurred under the debt instrument upon the happening of a specified event. A specified event may include death, disability, or involuntary employment of the borrower or other event that may reasonably be expected to affect the ability of the borrower to repay the loan.
This has been discussed here before and maybe is self evident but the plans to 'rework' existing mortgages into more favorable terms for the home owners - be they mortgage freezes, rate reductions, refinance, whatever - overlook the notion of who/how they will be processed.
Think about it. The troubled mortgages were, for the most part, processed 'in bulk' by originators utilizing a volume driven model. In effect many of the applications were in essence 'rubber stamped' with little regard to providing 'full documentation'. In the best of times - assuming that little work would be required in servicing these mortgages - the servicing capacity was spread thin. Many of the companies initially servicing those mortgages have gone BK. Over time the mortgages were consolidated into the hands of fewer qualified services. Now imagine that there is a sudden surge in requests to rework those mortgages into some semblance of shape such that they are acceptable to the mortgage holder - given the expectations of todays mortgage market. I just don't see it happening...
As for the GSE jumbo loans..well, I think that when all is said and done it boils down to business as usual for the borrower. By the time the GSEs are in a position to process the loans and have added on the appropriate uplift (depending on the borrowers qualifications) the borrower might as well have gone with a traditional jumbo.
Wow. Delusion runs rampant.
Cascadia buildiers unfazed by housing market slowdown |
KOMO News
- Seattle, Washington
| Local & Regional
PIERCE COUNTY, Wash. -- The housing market has taken a downturn, but the change isn't scaring developers of the state's biggest planned community.
The builders of Cascadia claim what they're building is unique and buyers will be willing to pay for it.
Patrick Kuo is the visionary behind the planned community of 6,500 homes with sweeping views of Mount Rainier.
"Throughout Cascadia all we are trying to do is create a sense of happiness," he said.
Cascadia? What's the name of the development in Weeds?
WSJ - Regulators Push the Banks to Seek Outside Capital
Regulators Push the Banks - WSJ.com
Cascadia. . .
haha
I've been expecting a TAF increase for about a week. We have over $50B sloshing on top of the TAFs. Makes sense given the situation.
And did y'all see this?
A new way to get equity out of your home |
KOMO News
- Seattle, Washington
| Consumer News
Where are these guys getting their money? How can they be willing to wait 50 yrs for a payback?
American ingenuity keeps on rolling. Where, I'm not always sure.
Best,
Goldman strikes gold with subprime auto loans (no docs?)
THE SERVICER AND SPONSOR
Triad Financial Corporation is a California corporation, wholly-owned by Triad Holdings Inc. Certain affiliates of Goldman, Sachs & Co., GTCR Golder Rauner, L.L.C. and Hunters Glen/Ford Ltd., which we collectively refer to as the equity sponsors, are indirect equityholders of Triad Holdings Inc. Triad was incorporated in California on May 19, 1989. Triad originates or purchases and services automobile loans. Triads executive offices are located at 7711 Center Avenue, Suite 100, Huntington Beach, California 92647 and its telephone number is (714) 373-8300. For more information regarding Triad, see The Sponsor and Servicer in the accompanying prospectus.
Triad Financial Special Purpose LLC, et al. · 424B5 · On 11/20/07
$598,330,000 Asset Backed Notes
Triad Automobile Receivables Trust 2007-B
Issuing Entity
Triad Financial Special Purpose LLC
Depositor
Re:
Freedom Financial Group Inc. announced that it has signed a $15 million, two-year, revolving credit facility with the ReMark Capital Group LLC, an affiliate of the Goldman Sachs Group Inc. The agreement was signed January 31, 2008. The facility is secured by automobile receivables originated by FFG in the Midwest. The credit facility will pay off an existing Heartland Bank loan while allowing expansion of FFG activities. The Company is the successor of Stevens Financial Group Inc., which filed for Chapter 11 bankruptcy in March, 2001 and emerged as a public corporation in January 2003. Falconbridge Capital Markets of Dallas Texas, advised FFG in connection with this transaction.
"Throughout Cascadia all we are trying to do is create a sense of happiness," he said."
Sounds like a cult to me.
India's Sensex Is Presently Losing 826 Points
Lumpinvestor:
Yeah. Can't believe they're building even ONE new home up in Oregon or Washington. I have two small infill developments on my wooded street, cleared.... and now stalled.
Half a mile away in Lake Oswego (posh), two, million dollar home sites cleared, but now up for sale. No more construction. About 2.5 miles south, Wilsonville West Linn border, a farm site, couple hundred homes planned... site half levelled, terraced (on a hill), pipe laid... construction trailer offices there.... chain link fence, gate now locked.
In between, ten acre development still building ... they had to throw out the old people who lived in trailers, to build this mcmansion neighborhood ... still building... until oblivion, I guess. God, I can't wait for these guys to go out of business.
And an idiot bought the 750k Mcmansion next door to me. Turns out (at least feign surprise) .. he's a mortgage broker!
Delusional is not quite adequate, in my book.
It gets better. I looked up where this place was, exactly. Look up the nearby town of Orting, WA in wikipedia. Not a grand endorsement for a safe place to live.
2 Visitors Online in the wee hours, while tomorrow I bet we finally break through 500 around 2PM EST. Just me and you. Hello!
Howdy... I'm on the West Coast and on vacation tomorrow... what's your excuse? Trying to figure out if California legislators are really serious about closing the "loophole" of the mortgage interest deduction, and why I haven't seen Rob Dawg harp on it lately. I also can't sleep because of the hypocrisy of the head of California Senate saying, "we need your tax money to help school the children!". Hey buddy, I have children, what about them?!? At least this guy had the decency to suggest raising taxes as his solution to the budget problem... basically saying "We have a money problem, we need more money... raise taxes... that's the solution... there I said it." Free country my 88!
I'm in Georgia. I've been getting up at 3:30 AM every day since 1998 to work on my crank in the basement project before going into my day-job. Saving the world damnit! (pissing into the coffee can)
Carlyle Capital suspended after getting more margin calls and default notices.
Carlyle Capital Suspended; Lenders Force Asset Sales (Update3) - Bloomberg.com
Did wetzel really say he has been waking up early for the last 10 years to work his crank?
I like 'Cascadia'. It gives me that happy feeling of cross-defaults.
ROFL!!
Futures up a little on TAF increase
announcement to $100b, lengthening maturities from 1 month to 6 months (as I predicted).