Nice post!!! The talking heads keep saying we are at or near the bottom---is there some real est. of when we could hit bottom from past cycles.

CNNMoney.com: 404 Page Not Found

Countrywide stops no-money-down lending-
The mortgage lender tells brokers to end offering the option of no down payment as delinquencies increase.

Just another day in paradise. I think the home is going to have be a place for people to live, not an atm for wall street and the middle class- oh well all's well that ends well.

Now on the main event- the Great Housing Crisis of '07- delayed but not stopped by the easing off of the fed from the great interest rate accelerator. Now the fed will no longer dictate subprime through the false connection to the ten year note with no cushion for people going splat. First the fraud gets washed out of the system- a thing which is starting now with Casey Serin's foreclosures, and then the investors bail, and then the specuvestors who walk away from the builder deposits, and then the homebuilders, and then mom and pop have nobody left to sell to but I, the vulture.

That is when you know the market is bottoming, when I start buying, and I don't think it will be for several years now...too much pain ahead.

The more I watch the subprime mess unfold and the guidelines changes taking place almost across the board, seemingly moving these lower tier players towards ALT-A and even conforming, I cannot dismiss the fact that this will create additional margin pressure on the conforming lenders in the near-intermediate term.

With margins already being squeezed by the yield curve and competition for deposits, it is inevitable that the tightening credit standards also apply earnings pressure.

We have already seen pre-packs involved in a couple deals, I believe that you will see two more in the near-term, the CA lawsuits prevent any other reasonable scenario as does the overcapacity.

I agree with Bies's latest statement, in that we are just getting started, the amount of qualified buyers being locked out will be felt, the HELOC extraction will show serious deterioration, and the ultimate result will be further pressure on an already weak economy.

My opinion is that this is not isolated to mortgage companies, banks will indeed fail/be taken over by the FED's. Widespread, no, but, enough to induce fear, absolutely.

The carnage in the high yield markets will likely be dramatic and create more concentrated damage.

If Morgan Stanley is buying NEW, it probably means they are taking over assets that NEW used as collateral for debts. The empty shell will bankrupt, buildings and people will work under MS. Maybe they will be assigned to some kind of debt collecting jobs? MS will provide hitmans on call - could be a good business together.

I think it's generally wishful thinking on the part of NEW AEs and those unwilling to cash in their chips on the stock.

Wish in one hand, shit in the other. See which fills up first.

Updated Reuters article says nothing about buying NEW . . . just bettering collateral position for the inevitable.

Morgan Stanley loan to New Century sound--analysts
| Reuters

OC,

I watch there rate sheets a lot, they often do weekend releases with the date set for the following monday, I'd look Sunday to see the new changes.

I think at the end of the day, it's the rating agencies that really caused this. By allowing the street to package this crap, stuff it into a cdo and give it a AAA rating, the investment seemed safe to many institutional investors. Ever wonder why the sell side makes 5x's what the buy side does?

S&P just lowered NEW to CC;

http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/ratings_ra/2,1,1,3,0,0,0,0,0,0,0,0,0,0,0,0.html

I think I figured how the Bear Stearns guy comes to 1.1million number, he figures $280 billion out of the mortgage market and divides it by the avg price of homes (268k) last year. Which gives approx 1.044 million.

Now there are several problems with this approach, but regardless it shows what we know, the pool of qualified buyers is shrinking. Add in all the motivated sellers, vacant homes, and the fact that we are at an all time high for home ownership (even fewer available buyers). Kind of paints a bleak picture, I think we have some more time before the stress really shows on the market, another 8-12 months at least.

OK, back in December when I was blissfully going along looking at houses, thinking of buying (blissfully as in ignorance is bliss) I contacted a couple of mortgage companies looking to get pre -approved.... (since then, of course, I've come to my senses). So today two of the folks I talked to back in December called within an hour of each other asking if I still needed to get a mortgage. In both cases I politely declined, but in the 2nd case I asked the caller how things were going in mortgage-land. She replied that things have been kind of crazy in the last couple of weeks. Subprime gone ("you might have heard about that", she says), Requirements tightening, etc. She also mentioned that 80/20s are basically gone because while you can easily get the 80, nobody wants to fund the 20. But she told me, I could still get an 80/15 given my FICO... "and the PMI is now tax deductable!"

Anyway, it would seem that it was a slow Friday afternoon in the mortgage biz.

It looks as if the changes being announced are across the board and effective Monday.