C'mon folks! This is how business is done in today's "screw 'em and ask questions later" economy. How long does any of these real estate booms last? I flipped a few times, made some nice money but now find myself unable to unload any of my condos (i have four). I'm a grown adult and made my own choices.
.
Yes, I made some spectacular money in the last three years. I'm gonna end up losing it all back, probably before 2007 is over. I learned a lot and I hope you did, too.
Email from Southstar Mortgage (these are the guys who were threating the implode-o-meter) from BO:
"This is an extremely difficult time in the mortgage industry and it appears the Sub-Prime woes have extended to several other segments of the market. We have been forced to make decisions far more rapidly than would have been acceptable in years past. Please know the changes are not undertaken lightly, but rather with much debate and concern for our correspondents. The market has become irrational in many cases and the decisions are made for the long term and not the short. Therefore, the following becomes Effective Monday, March 12th: "
Sad times for those illegal aliens, those "material movers", [I can get over it people, I can. Those Mexican dears who donated their time and yes, sweat (endangering their very lives with that, no?) to this enterprise...gone (unreported of course, just like their arrival) to the next employer willing to look the other way.], those contributors to spectacular productivity.
CFC is notorious for cutting back operations and laying off people faster than most. I don't know that I'd assume it means they're leaving the business. That may be, but I'd be more inclined to think they're just hunkering down to ride out the storm in the particularly brutal way CFC has of doing that. They've certainly done it before.
I must say I expect our friends at LEND must be glad today is over: closed down 28% to $11.40. That makes NFI (down 19%) and FMT (down 17%) look like downright winners. Bet there's some major unhappiness in the bar at Mos Eisely.
I talked with my neighbor yesterday, who bought with her husband two years ago at the height of the market. Sadly, things aren't working out so well between them, and now she's worried they will have to sell. Two kids, 5 and 2, and the house with a half-demoed kitchen and bath.
If they sold today, they would lose about $100,000. God, I feel for her....
"New Century Financial Corp. said Monday all of its lenders have cut funding or announced their intent to halt financing after the subprime mortgage lender failed to make payments, pushing the company further toward bankruptcy."
Tanta, I usually avoid rumors, but the Grapevine has been early - and correct - so I thought I'd post this today. I doubt CFC is exiting subprime, but it does sound like they are cutting back substantially.
Brooklynite, here is the memo. NEW does seem to be trading in the after hours market - down by about 50%.
Could someone please explain/speculate where the losses for all of this are going to ultimately end up (well, one stop short of the government bailout that we'll all end up paying for)?
I understand why the subprime lenders (and brokers) themselves are going down in flames.
Why are Goldman and Merrill being punished? Why not much mention of the mortgage insurers?
Could someone please explain/speculate where the losses for all of this are going to ultimately end up (well, one stop short of the government bailout that we'll all end up paying for)?
I understand why the subprime lenders (and brokers) themselves are going down in flames.
Why are Goldman and Merrill being punished? Why not much mention of the mortgage insurers?
I can't confirm the firing/lay-offs at Countrywide - but my rep was in here this morning saying the max LTV for all matricies would be 90% starting very soon.
"but my rep was in here this morning saying the max LTV for all matricies would be 90% starting very soon."
ALL matricies. Wow, talk about driving a stake through the housing market's heart. How soon will the bulk of all other lenders follow suit? How many folks in CA have 50K laying around for a down payment on the median house?
"How many folks in CA have 50K laying around for a down payment on the median house?"
I do - but it's so much better to rent. Even with the 12% price deflation (and counting), this abode I'm in would still cost me, rough estimate, at least $3k a month to 'own', versus the mere $2k I throw away worry free.
The WSJ did a great piece this morning on how YOUR HOUSE IS NOT AN INVESTMENT. The first thing people tell me (we sold in summer 2005) is how I'm missing out on the mortgage deduction. Boo hoo. Add it all up and renting is cheaper in most metropolitan areas.
THey never should have been making less than 90% CLTVs in the first place. We should thank/reward them because they stopped swinging a baseball bat on our children?
THey never should have been making less than 90% CLTVs in the first place. We should thank/reward them because they stopped swinging a baseball bat on our children?
Have you ever looked at CFC's REO operation, ReconTrust? CHeck it out. Their REO numbers have rocketed in the past couple of months(perhaps not all their own listed on ReconTrust). AT any rate, they have firsthand experience with mounting losses. I am surprised they only want 10% down given the expense of disposing of these albatrosses and how the pain will do nothing but increase going forward.
Some years back when I and many of my friends were buying houses the $50k+ down payment was pretty much required thing. It was just a temporary condition when you could purchase a home without that, but it was just about 3 years and we are back to normal.
I remember very well scratching my pockets for down payment and borrowing few $k from friends to make my bank statement look better. But no down at all? Too good to be true to hold for more than a moment.
Paul Muolo said that HSBC is going to unload its portfolio, one would think if they and others do so, it would dry up some secondary market funding for todays market loans. It could cause even more of a liquidity crunch.
does anybody have a figure for the average "saved" up and available for downpapyment, not the "rate" of savings in a given population? i'm really curious now how much our competitions (for buying a house!) in our area have...
Seriously, its amazing how panicked they are over 90% CLTV's max. As if that would end the US economy. Nope, just their business.
Oh, I believe a doozy of a recession is coming. But I also have met HUNDREDS of people ready to jump in with large $100k+ savings ready.
So prices will have a bottom. The question is only how fast we get to that bottom? I say any buying before Fall of 2008 is silly. I think the bottom will come quick and hard and be here by 2009. Others disagree and say later.
But no one I know who is plugged in thinks that we'll see anything but a downturn in 2007. And this is before layoffs. Ouch... that will come quick and painfully.
I feel for the hard workers who will be looking for work. But I don't think that Monster will do any good for 90% of the applicants in 2007.
" If they are offering 90% LTV, then they must be thinking the value of homes will drop another 10% before stabilizing"
CFC didn't indicate they would stop at 10% forever. It's just the first increase. They can't afford to go to 25% yet, since they still need to write new loans.
I am quite certian that in bubble area we will see 40% declines before the slide is all over - perhaps more.
Sad thing about this is the poorest people took the bait last and signed up for the most overpriced obligations. They will be defaulting in huge numbers - 10% will go to 40% and then higher, as prices tumble...
Countrywide has an advertising blitz going on in my area,and has for about 2 weeks.they are pushing refi's of arms to fixed.it is interesting that that ditech's are no longer on the air every 5 minutes,and even more interesting that countrywide is.i'm in sonoma county,it's different here.
The question: "How many people have 50K laying around for the downpayment on a median priced house?"
Probably should be stated : "How many people who DO have 50K laying around would actually be willing to put it down on what is currently considered a '500K house' ?"
That's the way I'm framing the question with my hard - earned DP money.
That money is going towards a REAL HOUSE! Not some broken down piece of crap that is currently on the market for hundreds of thousands of dollars.
The WSJ did a great piece this morning on how YOUR HOUSE IS NOT AN INVESTMENT
Sure it's an investment. An investment is any asset that yields income. The yield from a house is the value of the shelter it provides (rent equivalence).
The problem is that a lot of people seem to think that "investment" means "something that is guaranteed to make money".
I have a current CFC California rate sheet right here. 100% and 80/20's are on page 2. The rates are so high that nobody could possibly afford them. They are all full-doc products, so no shaky-shaky games with the income will "circumvent" that high rate.
How does 11% at FICO 620 and 9.45% at FICO 680 sound?
I have a current CFC California rate sheet right here. 100% and 80/20's are on page 2. The rates are so high that nobody could possibly afford them. They are all full-doc products, so no shaky-shaky games with the income will "circumvent" that high rate.
How does 11% at FICO 620 and 9.45% at FICO 680 sound?
The new rate sheet still shows 80/20 and 100% 1 loans, its just the rates are "pay day loan" level for full doc only.
http://www.cwbc.com/PdfFiles/WLDBC%20CA.pdf
Basically, if anyone qualified, why would they take it.
C'mon folks! This is how business is done in today's "screw 'em and ask questions later" economy. How long does any of these real estate booms last? I flipped a few times, made some nice money but now find myself unable to unload any of my condos (i have four). I'm a grown adult and made my own choices.
.
Yes, I made some spectacular money in the last three years. I'm gonna end up losing it all back, probably before 2007 is over. I learned a lot and I hope you did, too.
Sleepless,
Thanks for being honest and giving us the other side of the coin. Good luck.
It's funny. I use to get asked why we don't buy a house at least once a week. I just realized it hasn't happened for months.
We had other reasons besides the bubble but my wife is so glad I keep up on what's happening in the world of finance and economics.
More rumors from Mortgage Grapevine on CFC:
I just spoke to an AE who works out of the Anaheim center.
His sales manager and all AE´s on his team were fired. He is putting his resume up on Monster.
He was told by the big SVP that the Op´s cuts are already in the works.
Sad times...
by WholesaleSolutions March 12, 2007
Sad times indeed for those working in the mortgage / housing industries.
Best Wishes to all.
"It's funny. I use (sic) to get asked why we don't buy a house at least once a week. I just realized it hasn't happened for months."
(laugh out loud)
Same here.
Other guideline pullbacks were Option One, Argent, Southstar. I missed a couple.
Email from Southstar Mortgage (these are the guys who were threating the implode-o-meter) from BO:
"This is an extremely difficult time in the mortgage industry and it appears the Sub-Prime woes have extended to several other segments of the market. We have been forced to make decisions far more rapidly than would have been acceptable in years past. Please know the changes are not undertaken lightly, but rather with much debate and concern for our correspondents. The market has become irrational in many cases and the decisions are made for the long term and not the short. Therefore, the following becomes Effective Monday, March 12th: "
"The market has become irrational"
NO. This market WAS irrational for 4 years!!
Sad times for those illegal aliens, those "material movers", [I can get over it people, I can. Those Mexican dears who donated their time and yes, sweat (endangering their very lives with that, no?) to this enterprise...gone (unreported of course, just like their arrival) to the next employer willing to look the other way.], those contributors to spectacular productivity.
CFC is notorious for cutting back operations and laying off people faster than most. I don't know that I'd assume it means they're leaving the business. That may be, but I'd be more inclined to think they're just hunkering down to ride out the storm in the particularly brutal way CFC has of doing that. They've certainly done it before.
I must say I expect our friends at LEND must be glad today is over: closed down 28% to $11.40. That makes NFI (down 19%) and FMT (down 17%) look like downright winners. Bet there's some major unhappiness in the bar at Mos Eisely.
I didn't get the memo, and haven't been paying much attention, but when did they suspend trading in NEW?
From Google finance, looks like they haven't traded today at all.
And yes, the cantina, wretched hive that it is, must have a pretty sullen atmosphere about now.
Back to selling vacuum cleaners for a lot of these mortgage brokers.
It is a little late to shut the barn door after all the horses escaped.
I talked with my neighbor yesterday, who bought with her husband two years ago at the height of the market. Sadly, things aren't working out so well between them, and now she's worried they will have to sell. Two kids, 5 and 2, and the house with a half-demoed kitchen and bath.
If they sold today, they would lose about $100,000. God, I feel for her....
http://www.novastarmortgage.com/pdf-bin/monthly_production_reports/mpr_2007_02/MPR_2007_02.pdf
Novastar monthly production report, next months report should be interesting, if they are still around.
http://www.novastarmortgage.com/pdf-bin/monthly_production_reports/mpr_2007_02/MPR_2007_02.pdf
Novastar monthly production report, next months report should be interesting, if they are still around.
New Century Creditors Cut Funding
Expired
"New Century Financial Corp. said Monday all of its lenders have cut funding or announced their intent to halt financing after the subprime mortgage lender failed to make payments, pushing the company further toward bankruptcy."
Tanta, I usually avoid rumors, but the Grapevine has been early - and correct - so I thought I'd post this today. I doubt CFC is exiting subprime, but it does sound like they are cutting back substantially.
Brooklynite, here is the memo. NEW does seem to be trading in the after hours market - down by about 50%.
Best to all.
Ouch. Thanks CR, and appreciate the frequent posting these days. These are interesting times.
Could someone please explain/speculate where the losses for all of this are going to ultimately end up (well, one stop short of the government bailout that we'll all end up paying for)?
I understand why the subprime lenders (and brokers) themselves are going down in flames.
Why are Goldman and Merrill being punished? Why not much mention of the mortgage insurers?
Thanks.
Could someone please explain/speculate where the losses for all of this are going to ultimately end up (well, one stop short of the government bailout that we'll all end up paying for)?
I understand why the subprime lenders (and brokers) themselves are going down in flames.
Why are Goldman and Merrill being punished? Why not much mention of the mortgage insurers?
Thanks.
I can't confirm the firing/lay-offs at Countrywide - but my rep was in here this morning saying the max LTV for all matricies would be 90% starting very soon.
"but my rep was in here this morning saying the max LTV for all matricies would be 90% starting very soon."
ALL matricies. Wow, talk about driving a stake through the housing market's heart. How soon will the bulk of all other lenders follow suit? How many folks in CA have 50K laying around for a down payment on the median house?
Last chance to take your blue pill.
I just want to clarify that the 90% comment came from our subprime rep, so I can't confirm that on the prime side.
"How many folks in CA have 50K laying around for a down payment on the median house?"
I do - but it's so much better to rent. Even with the 12% price deflation (and counting), this abode I'm in would still cost me, rough estimate, at least $3k a month to 'own', versus the mere $2k I throw away worry free.
The WSJ did a great piece this morning on how YOUR HOUSE IS NOT AN INVESTMENT. The first thing people tell me (we sold in summer 2005) is how I'm missing out on the mortgage deduction. Boo hoo. Add it all up and renting is cheaper in most metropolitan areas.
1: Horse gone. Check.
2: Lock barn door. Check.
3: Mozillo out. Check.
4: Address problems. Check.
THey never should have been making less than 90% CLTVs in the first place. We should thank/reward them because they stopped swinging a baseball bat on our children?
1: Horse gone. Check.
2: Lock barn door. Check.
3: Mozillo out. Check.
4: Address problems. Check.
THey never should have been making less than 90% CLTVs in the first place. We should thank/reward them because they stopped swinging a baseball bat on our children?
Have you ever looked at CFC's REO operation, ReconTrust? CHeck it out. Their REO numbers have rocketed in the past couple of months(perhaps not all their own listed on ReconTrust). AT any rate, they have firsthand experience with mounting losses. I am surprised they only want 10% down given the expense of disposing of these albatrosses and how the pain will do nothing but increase going forward.
winjr: "How many folks in CA have 50K laying around for a down payment on the median house?"
Yeah, I just can't follow the thinking of the sanguine, "it's just subprime" people.
In LA 28% of the mortgages were subprimes, and I think another 15-20% Alt-A.
Some years back when I and many of my friends were buying houses the $50k+ down payment was pretty much required thing. It was just a temporary condition when you could purchase a home without that, but it was just about 3 years and we are back to normal.
I remember very well scratching my pockets for down payment and borrowing few $k from friends to make my bank statement look better. But no down at all? Too good to be true to hold for more than a moment.
National Mortgage News - What We're Hearing
Paul Muolo said that HSBC is going to unload its portfolio, one would think if they and others do so, it would dry up some secondary market funding for todays market loans. It could cause even more of a liquidity crunch.
Hey, I just checked my zip code in Orange County, CA.
Median price is down 20% YOY.
It is a zip code that is coastal.
Damn it might be time to put in lowball offers (20% below asking).
I would be a buyer in OC at 40-45% discounts.
Woohoo!
Hey, how did you check it?
per winjr's comment above:
does anybody have a figure for the average "saved" up and available for downpapyment, not the "rate" of savings in a given population? i'm really curious now how much our competitions (for buying a house!) in our area have...
If they are offering 90% LTV, then they must be thinking the value of homes will drop another 10% before stabilizing. I would bet it will be 20%.
"Get ready, the whole US economy is standing on the railroad tracks with their back turned to the oncoming train while fidgeting with their Ipods."
I read that quote at:
Option One Just Announced...
Yes, a broker forum.
Seriously, its amazing how panicked they are over 90% CLTV's max. As if that would end the US economy. Nope, just their business.
Oh, I believe a doozy of a recession is coming. But I also have met HUNDREDS of people ready to jump in with large $100k+ savings ready.
So prices will have a bottom. The question is only how fast we get to that bottom? I say any buying before Fall of 2008 is silly. I think the bottom will come quick and hard and be here by 2009. Others disagree and say later.
But no one I know who is plugged in thinks that we'll see anything but a downturn in 2007. And this is before layoffs.
Ouch... that will come quick and painfully.
I feel for the hard workers who will be looking for work. But I don't think that Monster will do any good for 90% of the applicants in 2007.
Got popcorn?
Neil
" If they are offering 90% LTV, then they must be thinking the value of homes will drop another 10% before stabilizing"
CFC didn't indicate they would stop at 10% forever. It's just the first increase. They can't afford to go to 25% yet, since they still need to write new loans.
I am quite certian that in bubble area we will see 40% declines before the slide is all over - perhaps more.
Sad thing about this is the poorest people took the bait last and signed up for the most overpriced obligations. They will be defaulting in huge numbers - 10% will go to 40% and then higher, as prices tumble...
According to this link, NEW traded at $1.66 down $1.55 before the NYSE opened.
StockCharts.com
Countrywide has an advertising blitz going on in my area,and has for about 2 weeks.they are pushing refi's of arms to fixed.it is interesting that that ditech's are no longer on the air every 5 minutes,and even more interesting that countrywide is.i'm in sonoma county,it's different here.
Countrywide sent me some junk mail today, to scare me out of my adjusting ARM.
Except that... I don't have an ARM. I have a 15 year fixed at 5.5%.
Either their mailings are getting sloppy, or they're gunning everyone trying for leads!
The question: "How many people have 50K laying around for the downpayment on a median priced house?"
Probably should be stated : "How many people who DO have 50K laying around would actually be willing to put it down on what is currently considered a '500K house' ?"
That's the way I'm framing the question with my hard - earned DP money.
That money is going towards a REAL HOUSE! Not some broken down piece of crap that is currently on the market for hundreds of thousands of dollars.
Lordy I can't wait to see how this shakes out.
The WSJ did a great piece this morning on how YOUR HOUSE IS NOT AN INVESTMENT
Sure it's an investment. An investment is any asset that yields income. The yield from a house is the value of the shelter it provides (rent equivalence).
The problem is that a lot of people seem to think that "investment" means "something that is guaranteed to make money".
I have a current CFC California rate sheet right here. 100% and 80/20's are on page 2. The rates are so high that nobody could possibly afford them. They are all full-doc products, so no shaky-shaky games with the income will "circumvent" that high rate.
How does 11% at FICO 620 and 9.45% at FICO 680 sound?
I have a current CFC California rate sheet right here. 100% and 80/20's are on page 2. The rates are so high that nobody could possibly afford them. They are all full-doc products, so no shaky-shaky games with the income will "circumvent" that high rate.
How does 11% at FICO 620 and 9.45% at FICO 680 sound?
ugh. haloscan.
"But no down at all? Too good to be true to behold for more than a moment."
I think everyone, even in the "ownership
society" ought to pay in 20% down.