This is just more evidence of the power of the amazing american economy to provide for unlimited growth in all sectors forever. Housing will go back to 30% growth rates per year, and the Dow will be at 36,000 again soon! There was never a better time to invest, just max out those credit cards and buy some stuff, it's the american way!
More and more bad loans concentrating among fewer players, the consolidation in the industry will only concentrate risk among the remaining players. Either they tighten standards or they get more junk loans.
And yet, just as with Ownit, nobody cares, the financial markets don't even glance to look as they speed by. The scared permabears are once again standing around wringing their hands over a new "discovery", shocked, shocked! that the unnatural market doesn't appreciate their accumen. They are left irrelevant, triviaized once again.
Could it be thus because, unlike the past S&L crisis where every closure was a nationaly covered financial shock, the current closures are nothing more than an already-discounted EMPLOYMENT event? And in a full-employment economy, a couple thousand temporarily tossed out gen y and x'rs causes...well, not much concern to put it mildly.
This latest permabear "discovery" will no doubt keep them wringing their paws, ever more sure that the "sucker rally" is that much closer to the precipice.
Notice how they say "in the last two months" _ Yet they issued a press release on Dec 8 claiming all was well. LMAO
which reminds me of the President's statements about Rumsfeld shortly before the election and 1 day after.
And subsequent defence: the statements before were not lies but "aspirational" --not exactly the truth but, hey, with a little more promo and luck, it could happen.
Like the story of the levies, this was not tacked down on the examining board and denounced by the media --as if it were, say, a consensual affair.
So it appears that The President's m.o. is an example to be followed...possibly contributing to some "unhappiness" among the public who should be enjoying this growing economy and nearly-triumphant crusade for democracy.
What is totally amazing to me is the total disconnect between the stock market valuations of lenders NEW, LEND, CFC, DSL, FED and the private market value (zero) when no bidders are willing to step forward and take the going concern at any price.
There are no bidders for Ameriquest or Option One.
We are still in the early innings of this cataclysmic destruction of the mortgage business.
More warehouse fundings line cancellations are around the corner. The mortgage insurance lenders will not be immune. And we haven't begun to see the OUTRIGHT FRAUD that was perpetrated.
The problems are not just in the subprime market. The ALT A paper is wannabee subprime paper. And the Option Arm loans will lose its "refinance out."
This constriction of financing will push up interest rates for mortgage borrowers and reduce sales and increase defaults. None of this is good for residential real estate prices.
frank - I'm not surprised... there is no 'there' there.
The companies had no real assets - not even IP. They were the perfect ideal of a 'platform enterprise'... all high concept & marketing and little else.
So why buy'em? If another 'company' believes there is opportunity there - just replicate the platform... don't need to 'buy' worthless 'goodwill' to do that.
Merril Lynch paid $100 million for 20% of Ownit and then walked away from them and their investment.
Where did this $100 million infusion dissipate into?
If the #11 & #15 lenders ( Ownit & MLN) have no residual value. And the #5 & #7 -Ameriquest & Option One can't get a bid there is a huge disparity between private market value and public stock value.
What is not showing up on the balance sheet of the public companies is the hidden liabilities and overstated assets.
therox
ALT A paper is not A paper nor SubPrime. It is loans made without verification of income or verification of assets or both and is predominantly based on A FICO scores and obstensibly better credit history than subprimes borrowers.
What is not showing up on the balance sheet of the public companies is the hidden liabilities and overstated assets.
That is very possible.
On the point about the $100 million... that isn't that much to a company like M/L.
I currently sell parts for a firm that was bought for about $40 million by a private equity arm of a company similar to M/L... they are actively 'learning the ropes' now and expanding the biz model first into Asia and then later (in a year or so) into the EU (probably through a low cost eastern European site).
Their intent is to keep the US operation running but if in the end they shut down the US operation - they could care less. They got out of it what they wanted - a full grasp of the biz model & how to replicate it.
If the Asian & EU operations don't pan out - they might shut them all down too. That would be painful.
But they made it clear to all of us they do not double down on losing bets. They have so many bets running at once that they can afford to have a few - quite a few actually - fail.
Quite an eye opener for managers of the small company that was bought - more than a little scary.
I am sure that is how M/L looks at Ownit. They bought in to assure a supply of product & it didn't work out. So be it - move on. Lessons learned.
They could replicate the model over again in the future if they wanted. We aren't talking the Apollo project from scratch.
Being one of the last employees left sucks, It is just like a slow suicide, I just want them to say FIRED and get it over with and screw themselves with the false hope!
MLN is making a comeback. Lehman is not purchasing their wholesale operations. Just a huge chunk of the portfolio. I am told MLN will be up and running by feb 1st.Including wholesale, I am an A/E for MLN. This was just communicated to all employees.
I knew Mitch (owner) Would not go down without a fight. He is definately a scrapper.
I too am an MLN rep. Let's face it. They made bad decisions and the owners, Mitch and Jim, turned the company over to a couple of idiots and didnt keep a good enough eye on things when they should of. Then they string their workforce along for three weeks telling them not to worry that they were bringing us back. The bottom line is: we're done. No one is getting paid and we just took a royal FITA. AE's will find jobs but operations staff is screwed. So much for the fight. right now Mitch is a joke.
I am a business writer for the Record-Journal looking for employees that care to discuss what happened at MLN.The layoffs, the commissions and talk of bankruptcy filings.
If interested on the record or off the record, you can contact me at 203-317-2255./
It is amazing the speed of the turn from expansion to disolving.
Subprime lending is dead.
The heart has stopped beating, only the limbs are convulsing.
The credit event still has not happened yet.
How many more major subprimes will bite the dust before we get cross-defaults?
Only time will tell. Any predictions CR?
John Doe
There's a rumor today they're negotiating with Lehman Brothers.
About 200 sub-prime lenders, per HUD, 2005. Look out below!
Notice how they say "in the last two months" _ Yet they issued a press release on Dec 8 claiming all was well. LMAO
Any thoughts on Countrywide? Mozilo sold another 14,000 shares last week.
Maybe they can house all their "furloughed" employees in their soon to be completed campus.
Own-it issued the same kind of crap press release then filed for BK.
This is just more evidence of the power of the amazing american economy to provide for unlimited growth in all sectors forever. Housing will go back to 30% growth rates per year, and the Dow will be at 36,000 again soon! There was never a better time to invest, just max out those credit cards and buy some stuff, it's the american way!
This is eerily reminiscent of late 2000 / early 2001 for me.
I remember looking at that f--dcompany website with all my co-workers waiting for the layoffs and closings to come.
Fortunately, this time around I'm not working for a sub prime lender.
And we just bought a house in scenic Wallingford, CT. At the peak. I guess our local economy just turned up the suck.
More and more bad loans concentrating among fewer players, the consolidation in the industry will only concentrate risk among the remaining players. Either they tighten standards or they get more junk loans.
And yet, just as with Ownit, nobody cares, the financial markets don't even glance to look as they speed by. The scared permabears are once again standing around wringing their hands over a new "discovery", shocked, shocked! that the unnatural market doesn't appreciate their accumen. They are left irrelevant, triviaized once again.
Could it be thus because, unlike the past S&L crisis where every closure was a nationaly covered financial shock, the current closures are nothing more than an already-discounted EMPLOYMENT event? And in a full-employment economy, a couple thousand temporarily tossed out gen y and x'rs causes...well, not much concern to put it mildly.
This latest permabear "discovery" will no doubt keep them wringing their paws, ever more sure that the "sucker rally" is that much closer to the precipice.
LK-
lay off the crack pipe, I think you've had a bit too much "holiday cheer..."
LK,
Its comical that you think the OWNIT and MLN closures are about the meaningless few thousand people they employ(ed). Its not.
Its about the 1.5-2 trillion $ sub-prime ponzi scheme that has "already" begun to unravel.
2006 vintage originations are ALREADY showing delinquencies approching the mid-teens in many securitizations.
Stay Tuned.
I am distracted by crispy's
which reminds me of the President's statements about Rumsfeld shortly before the election and 1 day after.
And subsequent defence: the statements before were not lies but "aspirational" --not exactly the truth but, hey, with a little more promo and luck, it could happen.
Like the story of the levies, this was not tacked down on the examining board and denounced by the media --as if it were, say, a consensual affair.
So it appears that The President's m.o. is an example to be followed...possibly contributing to some "unhappiness" among the public who should be enjoying this growing economy and nearly-triumphant crusade for democracy.
LMAO.
They removed the Dec 8 press release. Too bad its all over the net.
What is totally amazing to me is the total disconnect between the stock market valuations of lenders NEW, LEND, CFC, DSL, FED and the private market value (zero) when no bidders are willing to step forward and take the going concern at any price.
There are no bidders for Ameriquest or Option One.
We are still in the early innings of this cataclysmic destruction of the mortgage business.
More warehouse fundings line cancellations are around the corner. The mortgage insurance lenders will not be immune. And we haven't begun to see the OUTRIGHT FRAUD that was perpetrated.
The problems are not just in the subprime market. The ALT A paper is wannabee subprime paper. And the Option Arm loans will lose its "refinance out."
This constriction of financing will push up interest rates for mortgage borrowers and reduce sales and increase defaults. None of this is good for residential real estate prices.
frank - I'm not surprised... there is no 'there' there.
The companies had no real assets - not even IP. They were the perfect ideal of a 'platform enterprise'... all high concept & marketing and little else.
So why buy'em? If another 'company' believes there is opportunity there - just replicate the platform... don't need to 'buy' worthless 'goodwill' to do that.
Can anyone please explain what are "Alt A" papers? Saw this term few times, never knew...
dryfly
Merril Lynch paid $100 million for 20% of Ownit and then walked away from them and their investment.
Where did this $100 million infusion dissipate into?
If the #11 & #15 lenders ( Ownit & MLN) have no residual value. And the #5 & #7 -Ameriquest & Option One can't get a bid there is a huge disparity between private market value and public stock value.
What is not showing up on the balance sheet of the public companies is the hidden liabilities and overstated assets.
therox
ALT A paper is not A paper nor SubPrime. It is loans made without verification of income or verification of assets or both and is predominantly based on A FICO scores and obstensibly better credit history than subprimes borrowers.
What is not showing up on the balance sheet of the public companies is the hidden liabilities and overstated assets.
That is very possible.
On the point about the $100 million... that isn't that much to a company like M/L.
I currently sell parts for a firm that was bought for about $40 million by a private equity arm of a company similar to M/L... they are actively 'learning the ropes' now and expanding the biz model first into Asia and then later (in a year or so) into the EU (probably through a low cost eastern European site).
Their intent is to keep the US operation running but if in the end they shut down the US operation - they could care less. They got out of it what they wanted - a full grasp of the biz model & how to replicate it.
If the Asian & EU operations don't pan out - they might shut them all down too. That would be painful.
But they made it clear to all of us they do not double down on losing bets. They have so many bets running at once that they can afford to have a few - quite a few actually - fail.
Quite an eye opener for managers of the small company that was bought - more than a little scary.
I am sure that is how M/L looks at Ownit. They bought in to assure a supply of product & it didn't work out. So be it - move on. Lessons learned.
They could replicate the model over again in the future if they wanted. We aren't talking the Apollo project from scratch.
Being one of the last employees left sucks, It is just like a slow suicide, I just want them to say FIRED and get it over with and screw themselves with the false hope!
MLN is making a comeback. Lehman is not purchasing their wholesale operations. Just a huge chunk of the portfolio. I am told MLN will be up and running by feb 1st.Including wholesale, I am an A/E for MLN. This was just communicated to all employees.
I knew Mitch (owner) Would not go down without a fight. He is definately a scrapper.
I too am an MLN rep. Let's face it. They made bad decisions and the owners, Mitch and Jim, turned the company over to a couple of idiots and didnt keep a good enough eye on things when they should of. Then they string their workforce along for three weeks telling them not to worry that they were bringing us back. The bottom line is: we're done. No one is getting paid and we just took a royal FITA. AE's will find jobs but operations staff is screwed. So much for the fight. right now Mitch is a joke.
I am a business writer for the Record-Journal looking for employees that care to discuss what happened at MLN.The layoffs, the commissions and talk of bankruptcy filings.
If interested on the record or off the record, you can contact me at 203-317-2255./