Am I not understanding this or are they actually giving people unsecured loans to try to stay current and 41% of the people are just pocketing the money.
The analogy to that story is a microcosm of the Govt bailout of Fannie and Freddie. We can't manage our business as evidenced by our failure so advance us more funds so we can continue not to manage our (your now) risk properly.
12th Percentile writes:
Am I not understanding this or are they actually giving people unsecured loans to try to stay current and 41% of the people are just pocketing the money?
I hope it's not that absurd. I think the loan proceeds must go to the bank servicing the loan.
But that's not much better, an unsecured loan to pay a mortgage you can't afford on a house worth less than your loan, would be even easier to walk away from the house or the mortgage. Pretty silly idea.
Could have been worse at least they can quantify these losses ahead of time for HELOCs you don't know how many were using those to pay off a first or second mortgage...What to the models for 100% delinquency losses look like?
China bought a lot of dollars. When the dollar goes up, oil drops proportionately. Wall Street sees the dollar/oil numbers and thinks the bottom is in. The market rallies.
That's China's way of reducing the chance of a crash at the start of the Olympics.
Its odd that they would default the second time. You'd think they'd be so excited about getting a second loan which effectively has no recourse that they would stay current....
When will they offer CreditCard Saver Advanced loans, so people can get more cash advances so they buy stuff they don't need and make them feel good about themselves?
Is it lunch yet? Let's face it, the recession is over, and gas will soon be back to $1.25 a gallon and the largest SUV ever to be engineered is about to be brought to consumer show in Vegas and it will get 4 mpg and cost $200,000; meanwhile, homes will rocket up 40% and stocks will will soar and and the good times will be on track just-in-time for halloween, while shopping malls and stores will have a supply shortage of toys, which will cause dissent from washington, where Obama will trip up in defending a bailout for XMAS venders and look like a grinch, as Mccain walks away with a stunning political victory as he sells America on the idea of dropping A neutron bomb on Iraq and Iran as the simple solution to end The bush War; the rest is just more of the same...
Yah, the question now is, who will look stupider in regard to energy policy, now that oil prices are crashing like a tsunami wave against a large pile of tiny boats, placed upon the sandy shore (at low tide)?
McCain always looked stupid, but now Obama looks dumb for suggesting like a panicked inexperienced pigtailed school girl that we, "Americans" have an energy crisis -- like hell we do Obama! What we have is a leadership crisis, because Bush had it all right, all along, as did Bernanke, who in his wisdom was very fast to see that a two week downtrend in oil prices has stopped inflation and chopped off the head of your recession monster. Wake up son, the good times are here and we need to party!
So.......after this orgy of delusion on Wall Street ends in a few minutes, who will be FDIC's newest stepchildren? After all it Friday afternoon. Place your bets.
friardaddy writes:
I guess that $40 billion bailout of the Big 3 automakers isn't necessary.
Write it down 70 billion for GM. alone. about 30 billion for Chrysler and Ford will be okay...I think...i know, they will never have to pay taxes... again... ever
This is just pure genius - the homeowner can't keep up with payments on the existing debt, so the answer was more debt. And for the taxpayers, the extra benfits of buying unsecured loans. Somebody just shoot these people - or else shoot me.....
Downey and Security Pacific are surely dead banks lending but I suspect either a day off so the markets get to anticipating the bank of the week or some small Florida thrift with condotel CRE loans.
You'd think they would have made it less obvious...they are going to close this up almost 400 points..
Subtlety is not this administrations style well with Paulson going on about his bazooka in his pants and how he is just itching to use it on the short sellers
Didn't tanta write a whole ubernerd post on why these loans were a good idea? This isn't an attack, I'm just wondering where things went wrong relative to her original post to what is happening in the modern day.
I'll take a look....I guess the mantra is we don't suck as bad as we thought we would. %41 is still terrible and I shudder to think what %70 does to it but I'm sure that's coming soon.
I dunno, maybe I'm looking at this the wrong way, but I'm thinking 6 out of 10 ain't bad. The other 4 presumably never should have been given a loan in the first place at all, so there's no concept of another loan fixing things.
Effe the Olympics......if that's what they want they can have them all IMO.
handing over an international sporting event to a bunch of fascists (that's what they really are) made me not care about them any longer.
I can't believe they will hold all that paper forever.....I don't make investments to hold for an indeterminate period of time. People investing based on that are going to get a rude awakening.
But I have some nachos to go eat....I'll be back around 5pm PST for you know what.
The seas are rough. The ship is bobbing up and down, rolling right and left. The rudder is broken, and the caption is drunk. Oh, there is also a hole in the bottom and we're taking on water...
Is it party time yet?
So over 10,000 families are now making it because of this program? So far at least? While 41% failures sounds sounds pretty shocking, that's a better impact than most expected.
Yep, you are probably right, e-, that the banks and broker/dealers will just put the 'insured' assets on ice/Level 3.
Terrible and embarrasing, that my accounting brethren have empowered the schmucks via isolating problems in Level 3 and recognizing writedowns in liabilities as income.
When I was an undergrad accounting major at U.T. Austin back in the early '80s, the watchword was 'conservative,' 'lower of cost or market,' highlight liabilities and do not overstate assets.
My, how easy money has softened minds and loosened ethics.
OT: Can someone explain to me the psychology of the current market? Why is it so bi-polar recently, going up 200+ points one day, down 300 the next? Also, why does the market go up when the news is bad and go down when the news is good? I am a newbie, so be kind to me!
Thanks
Switched over to March '09 IYR puts. Better for my sanity I think.
Or your stomach lining, at the least. Though one of my old bosses was of the opinion that a little blood in your stool was a good thing; built character.
From Tanta's Feb post (Thanks Shnaps!!)
HomeSaver Advance is documented by a borrower-signed promissory note, payable over 15 years at a fixed rate of 5% with no payments or interest accrual for the first six months.
From CR's post today "...[HomeSaver] started five months ago to offer the debt to cover borrowers' missed payments ... Of the loans made through May 30, only 59 percent resulted in the associated mortgages being current on June 30 ..."
WOAH!! NO PAYMENTS WERE DUE YET!
And 41 % didn't bring the mortgage current????
Even when one is a lowly intern and the other is the leader of the free world? If it isn't important then why all the denials? Any public servant that will go to great lengths to cover up such things can be blackmailed, and that IS a matter of public concern.
I love short mild recessions, that bear no relation to the extent of economic weakness. Those that are conveniently over before they are even declared! Doesn't even matter if the economy gets much worse, because... the sun will come out tomorrow!!
These results are comparable to past history on such workouts. From Tanta's previous post -
Fannie Mae reported in the 10-K that of the loans it has done modifications on that have a 2-year history since the modification was put in place, going back to 2001, 60% were performing or paid in full 24 months later, and 9% had been foreclosed 24 months later (the rest were still on the books but had become delinquent again, just apparently not delinquent enough to mean foreclosure yet).
Sometimes the delay is more important than the prevention.
These programs are created with good intentions, but, in the end, it may be helping the lender in delaying their write-downs rather than helping the borrowers.
Out of 59% who are current, I wonder what their vintages are like from the time they got HomeSaver loans.
Thanks for the link to the old Tanta post, Shnaps. She did a quick calculation based on:
20% cured
10% paid off the first loan but stiffed Fannie on the unsecured second
50% foreclosed after one year
20% foreclosed after two years
and the program would be a net plus for Fannie.
I don't see that the current results are so horribly worse than that, so I'm not ready to say this was a terrible idea on Fannie's part, and even if it turns out wrong it certainly wasn't "idiotic". It really comes down to the number who are truly cured, and we won't know that for a while.
Nigel -
I'm not so sure.
Per Tanta's piece, 60% were current 24 months later. Here, 59% are current after less than 5 months.
The default rate appears much higher on this program than previous ones.
Wow. So, 41% of "qualified" homeowner-borrowers who had their arrearages wiped out were still unable to keep their mortgages current? Some, no doubt, did not even make the first payment due after receiving the new loan. I wonder how many of the 59% will become past due after June 30.
But it was understood at the outset that this program would perform much worse than previous programs, You don't need a 60% cure rate to come out ahead.
Or your stomach lining, at the least. Though one of my old bosses was of the opinion that a little blood in your stool was a good thing; built character.
You have absolutely nailed what SRS holders have felt over the last two weeks. Nailed.
It's not official yet from FNMA but I heard from my contact on the inside that the plan is to continue the Home Saver Advance with a 59% success rate to asymptotically approach a zero default rate.
barely and Doggy, SRS below 85 seems like a bargain to me. Buy and just forget about it until after the elections and you could be very happy. Watching it everyday is really bad for you, though.
As we all know, SRS/URE, TWM/UWM, SKF/UYG are analogs of each other ( double short/long pairs ) - not identical analog though.
Has anybody tried closing a long losing position in SKF, opening a short position of equal value in UYG ( which comes good in due course ) and claiming a capital on the SKF position when reporting it to the IRS.
I'm sort of discussing the wash rule - substantially similar assets aspect.
I know I know I don't take advice in blogs, especially tax advice but I'm curious a while back.
FWIW - I switched to shorting the long doubles rather than buying the double shorts - the math persuaded me.
Editing my own post:
Has anybody tried closing a long losing position in SKF, opening a short position of equal value in UYG ( which comes good in due course ) and claiming a capital LOSS on the SKF position when reporting it to the IRS.
The Chinese Olympics remind me of those films of the Berlin games...all those massive numbers of volk moving in extreme choreography...a fascist fandango.
And Edwards is a cad to use his wife in his campaign while cheating...but when caught to announce publicly that he never "loved" the other woman is to plumb new depths, even for a pol.
OT: Can someone explain to me the psychology of the current market? Why is it so bi-polar recently, going up 200+ points one day, down 300 the next? Also, why does the market go up when the news is bad and go down when the news is good? I am a newbie, so be kind to me!
MiTurn--Look at the schizophrenic large percentage swings in the Dow in Sept 1929 and draw your own conclusions.
first
contained
the high oil prices did their job-destroyed the car companies and the airlines
I sure hope those second loans were at 100% interest rates otherwise those are losing money.
Am I not understanding this or are they actually giving people unsecured loans to try to stay current and 41% of the people are just pocketing the money.
The analogy to that story is a microcosm of the Govt bailout of Fannie and Freddie. We can't manage our business as evidenced by our failure so advance us more funds so we can continue not to manage our (your now) risk properly.
but it worked! 59% of the time!
This MAY be due to the fact that home values continue to fall, and the job marktet is getting worse.
I don't think there's money to pocket; I think the past due payments are simply declared current or the lender due the payments is given the money.
I've represented some people who have their past due payments stuck at the end of the loan, and that doesn't work either.
59% of the time it works every time!
Can we have the following inscribed permanently on the foreheads of these idiots?:
"Liquidity does not address solvency."
12th Percentile writes:
Am I not understanding this or are they actually giving people unsecured loans to try to stay current and 41% of the people are just pocketing the money?
I hope it's not that absurd. I think the loan proceeds must go to the bank servicing the loan.
But that's not much better, an unsecured loan to pay a mortgage you can't afford on a house worth less than your loan, would be even easier to walk away from the house or the mortgage. Pretty silly idea.
Could have been worse at least they can quantify these losses ahead of time for HELOCs you don't know how many were using those to pay off a first or second mortgage...What to the models for 100% delinquency losses look like?
Rob Dawg: Can we have the following inscribed permanently on the foreheads of these idiots?:
Rob, they're not thinking with THAT head. Incribe it on their butt and it might get seen.
"Liquidity does not address solvency."
Yeah but it makes us feel better...
Stuck in the ditch? Drive farther off the road.
What could go wrong with such a brilliant idea?
I think the moral to the story is HomeSaver Advance loans was a good way for 41% of the people to live rent free in their home for awhile longer.
China bought a lot of dollars. When the dollar goes up, oil drops proportionately. Wall Street sees the dollar/oil numbers and thinks the bottom is in. The market rallies.
That's China's way of reducing the chance of a crash at the start of the Olympics.
Historians will note these efforts alongside those of the Soviet Union and vodka.
Consumer Descretionary ETF (watches and $500.00 shoes - like McCains - are up over 5% today. Wheeeeee.
Happy Days are here again....
Its odd that they would default the second time. You'd think they'd be so excited about getting a second loan which effectively has no recourse that they would stay current....
/end snark
....................
When will they offer CreditCard Saver Advanced loans, so people can get more cash advances so they buy stuff they don't need and make them feel good about themselves?
Well, I read a lot of explanations on today's market action. Mine is simpler, thus probably closer to being correct: It has to do with 08/08/08.
11th +/-
Is it lunch yet? Let's face it, the recession is over, and gas will soon be back to $1.25 a gallon and the largest SUV ever to be engineered is about to be brought to consumer show in Vegas and it will get 4 mpg and cost $200,000; meanwhile, homes will rocket up 40% and stocks will will soar and and the good times will be on track just-in-time for halloween, while shopping malls and stores will have a supply shortage of toys, which will cause dissent from washington, where Obama will trip up in defending a bailout for XMAS venders and look like a grinch, as Mccain walks away with a stunning political victory as he sells America on the idea of dropping A neutron bomb on Iraq and Iran as the simple solution to end The bush War; the rest is just more of the same...
Neutron bomb - Wikipedia, the free encyclopedia
Ok, so they are just basically agreeing to pay the rent to the bank on the house that these people are underwater on and can't afford.
Usually free rent incentives are for the beginning of a contract.
Something tells me the defaults might have more to do with the size payment.
I think they would have been way better off renegotiating the terms of the note to run say 40 years and have a lower monthly payment....
Has anyone seen reasons why they didnt try this in lieu of this second loan mumbo jumbo....
..............
Ring. Ring.
"Hello?"
"Yes. This is Hank Paulson with the US Treasury."
"Who the F&*^ are you?"
"It doesn't matter. I'm here to give you money."
"Yo, what is the catch?"
"There is no catch. I just give you free money until the elections and you spend it and tell everyone that times are still good."
"OK. But what are elections?..."
"A rolling loan gathers no loss"
Ok, that's a gem. I just cracked up two of my analysts with that one. The third, well, she has no sense of humor.
Wamu can't get it together today... C'mon breath...
"A rolling loan gathers no loss"
I just cracked up two of my analysts with that one. The third, well, she has no sense of humor.
Tanta has an evil twin?
"Fannie Mae's initial attempts to restore delinquent homeowners to on-time payments with unsecured second loans failed 41 percent of the time."
Yah, borrow more. . . that'll solve all of your problems!
Thank goodness gas is only going to be $3.60/gallon. Prius prices are going to plunge.
"A rolling loan gathers no loss" Died:))
What the hell does the rolling stone gathers no moss Mean anyways???
Being delinquent has never been so profitable.
It means that Kate Moss doesn't date old rock stars.
Yah, the question now is, who will look stupider in regard to energy policy, now that oil prices are crashing like a tsunami wave against a large pile of tiny boats, placed upon the sandy shore (at low tide)?
McCain always looked stupid, but now Obama looks dumb for suggesting like a panicked inexperienced pigtailed school girl that we, "Americans" have an energy crisis -- like hell we do Obama! What we have is a leadership crisis, because Bush had it all right, all along, as did Bernanke, who in his wisdom was very fast to see that a two week downtrend in oil prices has stopped inflation and chopped off the head of your recession monster. Wake up son, the good times are here and we need to party!
Putting fires out with gasoline...
So.......after this orgy of delusion on Wall Street ends in a few minutes, who will be FDIC's newest stepchildren? After all it Friday afternoon. Place your bets.
I guess that $40 billion bailout of the Big 3 automakers isn't necessary.
Paulson can use that for the GSE's.
This FNMA program is just like those PIK/toggle bonds the Street was selling last year: can't pay in cash so we'll just give you some more debt.
There's a possibility, surely a slim one, that the CBO undershot the cost of the new housing/lender bailout bill by a buck or two.
YessireeBob
OOH, ooh I know Downey financial!
friardaddy writes:
I guess that $40 billion bailout of the Big 3 automakers isn't necessary.
Write it down 70 billion for GM. alone. about 30 billion for Chrysler and Ford will be okay...I think...i know, they will never have to pay taxes... again... ever
So will we get a surprise rate cut on Monday since inflation is dead?
at this point it doesn't matter who gets hitched to the FDIC.
curious-er:
You'd think they would have made it less obvious...they are going to close this up almost 400 points...
I guess the CHinese are pissed that FNM and FRE are so good at managing money.
Ciao
MS
This is just pure genius - the homeowner can't keep up with payments on the existing debt, so the answer was more debt. And for the taxpayers, the extra benfits of buying unsecured loans. Somebody just shoot these people - or else shoot me.....
This &$%# is starting to piss me off. My poor SKFIOs barely have another month on this mortal coil.
No, Mr. Bank, I want you to die!
Tim - The Fed can print $70B before breakfast. NP.
Downey and Security Pacific are surely dead banks lending but I suspect either a day off so the markets get to anticipating the bank of the week or some small Florida thrift with condotel CRE loans.
CORS? BKUNA?
You'd think they would have made it less obvious...they are going to close this up almost 400 points..
Subtlety is not this administrations style well with Paulson going on about his bazooka in his pants and how he is just itching to use it on the short sellers
For those who are wondering how this program works, Tanta wrote this post about HomeSaver back in Feb.
This isn't that much worse than I would have expected them to perform.
Poor old WAMU and Fat Ass Fanny getting an ass spanking and everyone else partying like it's 1999. Speaking of banks blowing up theis Friday.
Didn't tanta write a whole ubernerd post on why these loans were a good idea? This isn't an attack, I'm just wondering where things went wrong relative to her original post to what is happening in the modern day.
Cal-
I don't think a 41% default rate was factored into that. No mater how "great it seems" you can't stay in business with that sort of return.
But we have Hank to bail them out so I guess they can. For a little while longer.
Ciao
MS
OT -- I presume that ACA's stepping away from its contractual obligations on $65B in credit default swaps will result in some additional write downs:
ACA Terminates $65 Billion of Credit-Default Swaps (Update1) - Bloomberg.com
No wonder the market is up.
Anon -- read the old post. She looked at a 70% default rate and it still didn't look awful. Not great, sure, but not awful.
Yet another headline of the day:
"appeals court rejects suit against fannie mae directors"
Yes because I'm sure they operated above board and the suit was totally without merit. They were just doing their job.........
Ciao
MS
I'll take a look....I guess the mantra is we don't suck as bad as we thought we would. %41 is still terrible and I shudder to think what %70 does to it but I'm sure that's coming soon.
Ciao
MS
Here is an article that reinforces the CMBX index of late.
Commercial Mortgage Bond Spreads Soar on Retail Woes
Commercial Mortgage Bond Spreads Soar on Retail Woes (Update2) - Bloomberg.com
Yields on commercial real estate securities relative to benchmark rates rose to the highest since March on concern that retailers won't be able to repay debt as consumers cut spending.
I dunno, maybe I'm looking at this the wrong way, but I'm thinking 6 out of 10 ain't bad. The other 4 presumably never should have been given a loan in the first place at all, so there's no concept of another loan fixing things.
MS The hits they just keep coming...
barely writes:
Massive on-air orgasm day for Ms Bartiromo. Looks like Mr Radigan has a woody too!
She must be loud...
%70 does to it but I'm sure that's coming soon...
end of the year? China wants to dump that mortgage paper bad...The US better let them win those gold medals or else...
YEs! we managed somehow to close exactly above 300 and 30! Mission accomplished
jg,
Right! See, now they can take their no bid asset and shovel it into level 3!
Booyah! Cowbell! I'd buy that for a dollar!
MoT,
Yes which explains the 5% bounce in cosumer discretionary today...no, wait a sec...
Effe the Olympics......if that's what they want they can have them all IMO.
handing over an international sporting event to a bunch of fascists (that's what they really are) made me not care about them any longer.
I can't believe they will hold all that paper forever.....I don't make investments to hold for an indeterminate period of time. People investing based on that are going to get a rude awakening.
But I have some nachos to go eat....I'll be back around 5pm PST for you know what.
Ciao
MS
OT: Damn, what we need is for the Enquirer to start running a section on RE. Those $%^&#$@ are always a day early!
Edwards told ABC News that he lied repeatedly about the affair with 42-year-old Rielle Hunter but said that he didn't love her.
Gee John why did you do then. Could have been about getting your rocks off?
The seas are rough. The ship is bobbing up and down, rolling right and left. The rudder is broken, and the caption is drunk. Oh, there is also a hole in the bottom and we're taking on water...
Is it party time yet?
Wondering who was throwing in the towel on SRS today? That was me!
Switched over to March '09 IYR puts. Better for my sanity I think.
So over 10,000 families are now making it because of this program? So far at least? While 41% failures sounds sounds pretty shocking, that's a better impact than most expected.
John Edwards is a disgrace. He should be crucified for the sake of cancerous wives the world over.
Yep, you are probably right, e-, that the banks and broker/dealers will just put the 'insured' assets on ice/Level 3.
Terrible and embarrasing, that my accounting brethren have empowered the schmucks via isolating problems in Level 3 and recognizing writedowns in liabilities as income.
When I was an undergrad accounting major at U.T. Austin back in the early '80s, the watchword was 'conservative,' 'lower of cost or market,' highlight liabilities and do not overstate assets.
My, how easy money has softened minds and loosened ethics.
OT: Can someone explain to me the psychology of the current market? Why is it so bi-polar recently, going up 200+ points one day, down 300 the next? Also, why does the market go up when the news is bad and go down when the news is good? I am a newbie, so be kind to me!
Thanks
In Joseph Mason's paper, didn't he say that more than 50% of modified loans default again eventually? I don't where he pulled that number out, though.
how about:
"I'm Tito?"
Liquidity does not address solvency."
Rob Dawg | Homepage | 08.08.08 - 3:25 pm | #
All pols are oily and I guarantee that they ALL cheat. Some are better at keeping it hidden, however....
Switched over to March '09 IYR puts. Better for my sanity I think.
Or your stomach lining, at the least. Though one of my old bosses was of the opinion that a little blood in your stool was a good thing; built character.
From Tanta's Feb post (Thanks Shnaps!!)
HomeSaver Advance is documented by a borrower-signed promissory note, payable over 15 years at a fixed rate of 5% with no payments or interest accrual for the first six months.
From CR's post today
"...[HomeSaver] started five months ago to offer the debt to cover borrowers' missed payments ... Of the loans made through May 30, only 59 percent resulted in the associated mortgages being current on June 30 ..."
WOAH!! NO PAYMENTS WERE DUE YET!
And 41 % didn't bring the mortgage current????
Am I reading this right?
Anonymouse writes:
John Edwards is a disgrace. He should be crucified for the sake of cancerous wives the world over.
why just for wives with cancer...lets "crucify" (your words) every man who ever had an extramarital affair
and how about women, let's do them in too, right ?..equality and all that
and hey cheating on your fiancee before tying the knot and even two timin your girlfriend...
do em all right anonymouse?
no promiscuity nor adulterous behavior allowed under penalty of death
sure glad the scandal news rag broke the story...im sure it was a great comfort to edwards wife to know the facts.
what edwards did was wrong, but what follows is worse...the sex police need to stop but-out of consensual adult sexual behavior.
"Liquidity does not address solvency."
That's true, but most solvents are liquids.
mock turtle,
That's why I'm voting for Nader; it's a good guess he's never had sex.
but-out of consensual adult sexual behavior
Even when one is a lowly intern and the other is the leader of the free world? If it isn't important then why all the denials? Any public servant that will go to great lengths to cover up such things can be blackmailed, and that IS a matter of public concern.
Fannie and Freddie are engaged in consensual adult relationship....
A loose Fannie policy?
I love short mild recessions, that bear no relation to the extent of economic weakness. Those that are conveniently over before they are even declared! Doesn't even matter if the economy gets much worse, because... the sun will come out tomorrow!!
Bottom's IN - NOW !
These results are comparable to past history on such workouts. From Tanta's previous post -
Fannie Mae reported in the 10-K that of the loans it has done modifications on that have a 2-year history since the modification was put in place, going back to 2001, 60% were performing or paid in full 24 months later, and 9% had been foreclosed 24 months later (the rest were still on the books but had become delinquent again, just apparently not delinquent enough to mean foreclosure yet).
Sometimes the delay is more important than the prevention.
Maybe, Bill Poole is right this time around.
These programs are created with good intentions, but, in the end, it may be helping the lender in delaying their write-downs rather than helping the borrowers.
Out of 59% who are current, I wonder what their vintages are like from the time they got HomeSaver loans.
Thanks for the link to the old Tanta post, Shnaps. She did a quick calculation based on:
20% cured
10% paid off the first loan but stiffed Fannie on the unsecured second
50% foreclosed after one year
20% foreclosed after two years
and the program would be a net plus for Fannie.
I don't see that the current results are so horribly worse than that, so I'm not ready to say this was a terrible idea on Fannie's part, and even if it turns out wrong it certainly wasn't "idiotic". It really comes down to the number who are truly cured, and we won't know that for a while.
Russ,
Quality. Can I use that one?
Nigel -
I'm not so sure.
Per Tanta's piece, 60% were current 24 months later. Here, 59% are current after less than 5 months.
The default rate appears much higher on this program than previous ones.
Wow. So, 41% of "qualified" homeowner-borrowers who had their arrearages wiped out were still unable to keep their mortgages current? Some, no doubt, did not even make the first payment due after receiving the new loan. I wonder how many of the 59% will become past due after June 30.
But it was understood at the outset that this program would perform much worse than previous programs, You don't need a 60% cure rate to come out ahead.
Or your stomach lining, at the least. Though one of my old bosses was of the opinion that a little blood in your stool was a good thing; built character.
You have absolutely nailed what SRS holders have felt over the last two weeks. Nailed.
Doubled up my SRS today. The HUGE intra day move made zero sense. Almost uncomfortable with the overweighting in SRS in my account...
barely,
Maybe you should change your handle to Iron-Gut Man.
"Maybe you should change your handle to Iron-Gut Man. :)"
I won't keep it that disproportionately high. May pare back as soon as Monady...
Yeah, barely, that's exactly what happened to me... kept hitting my lower and lower limit orders. And then kept going lower.
Bad for me psychologically. So I'll probably just sit on those March IYR puts until exercise and try not to worry about it.
It's not official yet from FNMA but I heard from my contact on the inside that the plan is to continue the Home Saver Advance with a 59% success rate to asymptotically approach a zero default rate.
The discount window is now open.
Liquidity is insolvency.
Liquidity means the ability to turn illiquid assets into liquid ones, i.e., cash.
That's what they do at bankruptcy court.
barely and Doggy, SRS below 85 seems like a bargain to me. Buy and just forget about it until after the elections and you could be very happy. Watching it everyday is really bad for you, though.
As we all know, SRS/URE, TWM/UWM, SKF/UYG are analogs of each other ( double short/long pairs ) - not identical analog though.
Has anybody tried closing a long losing position in SKF, opening a short position of equal value in UYG ( which comes good in due course ) and claiming a capital on the SKF position when reporting it to the IRS.
I'm sort of discussing the wash rule - substantially similar assets aspect.
I know I know I don't take advice in blogs, especially tax advice but I'm curious a while back.
FWIW - I switched to shorting the long doubles rather than buying the double shorts - the math persuaded me.
-K
Editing my own post:
Has anybody tried closing a long losing position in SKF, opening a short position of equal value in UYG ( which comes good in due course ) and claiming a capital LOSS on the SKF position when reporting it to the IRS.
I meant capital loss..
-K
The Chinese Olympics remind me of those films of the Berlin games...all those massive numbers of volk moving in extreme choreography...a fascist fandango.
And Edwards is a cad to use his wife in his campaign while cheating...but when caught to announce publicly that he never "loved" the other woman is to plumb new depths, even for a pol.
OT: Can someone explain to me the psychology of the current market? Why is it so bi-polar recently, going up 200+ points one day, down 300 the next? Also, why does the market go up when the news is bad and go down when the news is good? I am a newbie, so be kind to me!
MiTurn--Look at the schizophrenic large percentage swings in the Dow in Sept 1929 and draw your own conclusions.
cd
Once a delinquent....pretty much always a delinquent.