As if everyone had an average amount of equity. If 1/3 own outright, want to guess how the averages for those with mortgages are distributed....I'm guessing some portion of that "safe" 66% LTV average is above 80%.
The number that jumped out to me was the $43.3b in 2nd lien Home Equity/HELOCs. Is there any reason to believe they were more conservative with these than with the rest? They could be SOL on a lot of these...
I was in my small town bank today doing business and asked if they had any foreclosures. We never loan money like that, was the answer. It amazing who did and didn't get caught up in this.
jo6pac
The race to the bottom continues.
Look at the growth rates in the 2nd mortgage portfolio from 2006 to 2007, they were writing less low LTV and more high LTV. Just like from 2005 to 2006, just looking at those numbers alone one would have thought nothing bad happened in 2007
Apologies if this has been commented upon--I've been following via Google reader and missing the comments, mea culpa--but am I to understand from this LA Times article that the nation's largest mortgage lender, Countrywide, no longer offers any non-conforming (i.e., $417K +) loans???
The LA Times. Countrywide Financial Corp., stuck with tens of billions of dollars in alternative mortgages it cant sell, is pushing customers to refinance into traditional loans that can be easily unloaded by the struggling lender.
The home-loan giant seeks to have $12 billion of these exotic loans refinanced into uncontroversial mortgages and has told its sales force to pull out all the stops to get borrowers to go along, internal documents show.
Its unclear exactly what kinds of loans are in the $12-billion refinance mix, except that they are for less than $417,000 the limit for purchase by Fannie Mae and Freddie Mac.
A senior Countrywide loan officer described them as a hodgepodge that includes many adjustable-rate mortgages with optional ultralow payments made to borrowers with good credit who obtained them on a stated income basis without documenting their earnings.
Countrywide is desperate to dump them to recoup the capital by refinancing them into marketable loans, the loan officer said. Its the equivalent of a manufacturer who gets stuck with a ton of unsold merchandise after the Christmas season. So he says, Lets liquidate the inventory.
The documents describing the program make clear that the replacement loans must be conforming adhering to the standards of Freddie Mac and Fannie Mae or government loans, the highly documented mortgages that can be backed by the FHA or VA.
You must figure out how to originate every loan as a Conforming or Government loan! the instructions read. Ineligible Loan Types: Do not originate!!!
MTHood,excellent question.In the body of the text CLTV is clearly distinguished from LTV.I suspect that is a clue.And I would also bet the legal team had some advice on how to say things.Carefully.
The best thing about today. CongressKritter Kaptur confusing Hank & Ben. Ohio's out migration may eliminate the need for a CongressKritter some day. I've never been to Ohio and hope I never do. YouTube - Marcy Kaptur Gets Real Confused
I was listening to Kudlow on the radio on the drive home.
They had that Wayne Angel, an ex Fed governor who I hate on the show.
His remarks: that the Fed should have cut at least 100bps more by now, with another 100 coming...
his rationale: we "need" to drive safe investment yields so low that investors are FORCED to look elsewhere for more attractive yields. That elsewhere being the MBS market.
Nice work on the spreadsheet. You keep this up and you might be able to get your foot in the door at some local web dev shop, and that is no small task.
Of course you may have to compete with the 100 or so former mortgage brokers and agents who claim they are top notch designers with strong database backgrounds. good luck.
Tin Foil Hat...Security settings pretty high..custom...I'll have to poke around. I don't use Internut Exploder, so I'll have to compare notes from a completely insecure browser to one I've got.
CR - Now on Row 3400 and Col 69 in cell 129090 you will note that
hehe
You should be able to import FDIC history nums into excell and select periods for presentation reasons rather good stuff indeed. Have you access to their archive data? If not let me know.
Nice. These are the people who are supposed to be charged with Defending the People. We need more Regulations So PURE GOV'T officials can PROTECT us from the EEEVILS of th4e free market.
That is hoot - we just seem to do it larger in TX, no? - down here in the Houston area the DA who is quoted in the article got his tit caught in the wringer with an email trail that came out in discovery...ah sweet schadenfreude.
Spreadsheet looks fine in Swiftfox for Ubuntu. The hard part was poring over the numbers in the sheet, and disbelieving how awful some of the numbers looked.
let me be more clear - my mouse when rolled over the ss will scroll it up and down, but there is no way to get it to show the columns to the right of what is initially visible.
So much is happening all at once. Aren't there like six separate phenomena, that all worked together to run this damn thing up, and now working together to run it down? What's the total tab going to be?
Real estate wealth effect (about 10% of increased asset prices, or $200 billion)
Stopped, and possibly even reversed mortgage equity withdrawal: $?? billion
Securitized mortgages: $200 (???) billion
Bond insurers: $?? billion
Credit default swaps: normal corporate default rates on $45Tn of CDS's = $250Bn
Housing sector's direct impact on the economy: about $?? (100?) billion per year reduced.
No, the mortgage market would be a disaster if it relied on ongoing LTV, not to mention the appraisal issues involved. Everything is done as a function of original LTV, and original balance. The value of the home basically matters when the mortgage is over (i.e. refi or FC)
Geoff - a similar thing happens to me if resize my Firefox window. CR may be missing a tag, or it may be a fundamental flaw of the program. Try making the Firefox window larger if you can (perhaps close a sidebar).
"Foreclosure rates may be a kind of barometer for whats ahead. Lawmakers at all levels of government local, state, and national will look to take additional action if foreclosures keep rising, and the economic fallout continues, Blair suggested. This is the simple reality. Congress is already considering a number of proposals.
I very much believe in the market. But if market solutions fail to solve the problem, government will step in.
.
F. F - my problem is likely due to the fact that my monitor blew up recently, I haven't yet chosen a new one, and Im working the last two days on a laptop, at 14" screen size (diag.) (Painful...)
If there is a significant increase in payment when the loan recasts, the LTV at recast should be important--if it is over 80, then it will be difficult for the borrower to refi into another loan.
As customer feedback - the spreadsheet shows up fine in FireFox 2.0.0.11 ( With all ad blocker plugins enabled) - scrolls up and down fine but no scroll bars. no scroll left and right but I suppose that's because there are no further columns on the right.
The spreadsheet is a great addition in that it provides an easy means of reviewing the data within the confines of the article. Thanks!
FWIW: It displays, for all practical intents, the same in IE7, Firefox 2.0.0.11, and Safari 3.0.4 running under Vista Ultimate. YMMV
OT: I noted a vote of confidence for ex-FED Chairman Paul Volcker a few threads back. That reminded me of a widely published speech he gave at Stanford back in February 2005 - that went perty much unnoticed at the time. While I refreshed my memory I was dazed by the notion that words of this nature could be so easily ignored (dismissed) when delivered by a well respected and knowledgable expert. Around the same time there was recognition that a housing bubble was clearly forming in local markets the likes of San Diago. Therefore I find it difficult to accept the notion that the CEOs of those firms that were raking in record breaking profits had no knowledge that the models might be broke or that this thing could implode when the consumer ran out of $$. Just my opinion.
If there is a significant increase in payment when the loan recasts, the LTV at recast should be important--if it is over 80, then it will be difficult for the borrower to refi into another loan.
AH. there you go, you used one of the magic words i mentioned: refi.
Someone needs to say something about this! http://www.fakepaycheckstubs.com IS THIS LEGAL? No wonder why we have the subprime mess we have when lenders USE FAKE DOCUMENTATION to help PUSH the loan through Quickly SO THAT EVERYONE DOWN THE FOOD CHAIN (from loan processor to the loan officer to the actual lender) can make the commissions they "WERE" making during the booming 90's! Now we are BAILING OUT THESE CROOKS....SOUNDS LIKE the good ol' 1980's Savings and Loan BAILOUT DAYS to me! http://www.fakepaycheckstubs.com see it with YOUR OWN EYES!
Nice. These are the people who are supposed to be charged with Defending the People. We need more Regulations So PURE GOV'T officials can PROTECT us from the EEEVILS of th4e free market.
Which is ironic because Federal Reserve government officials and regulations to keep employment up at all costs were the cause of all this mess.
We could do what ever we wanted and didn't think through the consequences because we had regulations and regulators to protect us and do the thinking for us.
"let me be more clear - my mouse when rolled over the ss will scroll it up and down, but there is no way to get it to show the columns to the right of what is initially visible.
Geoff"
I find your wisdom an anchor in this storm. And I thank you for agreeing with my friggin sarcasm. Sorry I'm in a mood now...but appreciate the backing.
And what I mean I'm in a mood now... puhhhlleeeaze...angs are out...as long as they last tonight.
Someone asked about second liens over the 80% LTV option ARMs, and here's what they said:
"With regard to second liens on Option ARMs, it is very difficult for us to know which customers have second liens on an individual loan so it is quite difficult for me to give you a perspective on that."
I don't really buy his answer, because if they made the option ARM and did the HELOC they full well should know all about it! I certainly know my "90% financing" was an 80% first lien and a 10% HELOC! I'm no Tanta, but when they bucket my loans one is an 80% LTV and the other is an 80-90% HELOC. Or am I wrong?
I only have ~200 rounds for the Glock, ~100 rounds for the Browning shotgun, and 60 rounds for the rifle...and 2 months food. I am WAY behind the curve here...Thanks for the accounting. Gonna make the ammo makers happy on Saturday.
"Lawmakers and aides involved in the talks said the White House is pressing for tax rebates of $800 for individuals and $1,600 for married couples. Lawmakers were likely to settle on a $500 rebate for individuals, said an aide involved in the talks, with details for couples and people with children still being negotiated.
The rebates would likely be limited to individuals with incomes of $85,000 or less and couples with incomes of $110,000 or less, the aide said, speaking on condition of anonymity because no final decisions had been made."
If you are going to use my money to fund stupidity at least give me some of it.
"Foreclosure rates may be a kind of barometer for whats ahead. Lawmakers at all levels of government local, state, and national will look to take additional action if foreclosures keep rising, and the economic fallout continues, Blair suggested. This is the simple reality. Congress is already considering a number of proposals.
I very much believe in the market. But if market solutions fail to solve the problem, government will step in.
I think nationalizing mortgages is almost a sure bet at this point. At the very least I would expect the government to buy bad debt near par and to offer default insurance for new mortgages at little or no cost.
Otherwise we're looking at a complete collapse of housing and mortgage lending, not just a serious downturn.
People should still be mad as hell if this happens. This mess was absolutely forseeable and avoidable.
Also understand that one way or another this is coming out of your pocket. Either through taxation, or more likely, devaluation of your savings.
We may also pay the price in terms of long-term loss of freedom in markets and financial matters. And those loss of freedoms may lead to a less dynamic and competitive economy.
We could languish for years in a morass of regulation and distrust while we see opportunity, influence, and fulfillment slip through our hands into others who've maintained more flexible economies.
Lots of loans would move from over80% LTV category to under70% category if inflation spikes 20-30% over the next few years and housing follows suit (on average). Seems the obvious solution.
I wonder what will get WaMu first: credit losses or a criminal indictment from the eAppraiseIT disgrace?
The dumb sonsabitches wrapped it in a nice bow for the DOJ with their email chains.
As an aside, eAppraiseIT is a corporate name straight out of a Dilbert cartoon. You need both the "e" and the "IT" to make Goddamned sure everyone knows the process is automated, streamlined and forward-thinking.
Did just that in the Seattle Seahawks vs Pitt Steelers Super Bowl a few years ago. Drew $250,000 on my BofA HEL for a week. Bet it mostly on Super Bowl Props made a 10% return and put the $250,000 back in the bank.
But I am a professional gambler and wouldn't recommend this for you.
just in time for a Super Bowl Pool too...
now there's an idea. I am going to take out a 100 LTV HELOC so that I can go long on the PACKERS!
Shnapster | Homepage | 01.17.08 - 9:54 pm | #
If you don't think the high-end in the Bay Area is in trouble, read this ad from Craigslist for a house in the Santa Cruz mountains. As I said in earlier posts, more rentals at 2X the going rental rate are popping up. This one is truly amazing, and very revealing... I especially marvel at how they are trying to rent out different parts of the house separately! It is not a typo, they are asking $12,000 per month... (Note: emphasis added is mine).
"$12000 / 6br - Los Gatos Mountains, Estate Living (los gatos)" Enter the world of luxury and have it all. Gated estate on the best street in the Los Gatos Mountains, circle driveway with fountain, 8000sf+ home, pool/spa, pool house decking and BBQ area. Wine cellar with room to set and sip wine. One car attached garage. Close to all schools and store. Master bedroom has fireplace & steam shower. So many wonderful thing about this property, must see it. Rental price is for main house,pool house,pool and surrounding area. Additional areas & structures may also be rented. 1200sf, garage/workshop for $1200. 1 Bedroom guest house for $1500. 4 stall horse barn with paddocks & riding arena for $1500. Must see it to believe it.
Since a few things on this thread are about browsers, let me sneak this in: One of my computers (not this one!) uses the lynx browser, supposedly for security reasons. Is there any way to view the comments section with it? I just want the plain-vanilla text comments, could struggle on without graphics or spreadsheets.
Mortgage Pig hasn't been around for a while. I suggest it could be used to flag major BK's or resignations.
I think nationalizing mortgages is almost a sure bet at this point. At the very least I would expect the government to buy bad debt near par and to offer default insurance for new mortgages at little or no cost.
It would be pretty easy to re-nationalize or de-privatize Freddy & Fannie... just a couple roll call votes & a presidential signature... cut the checks & buy out the 'stockholders'.
Or just expand FHA... to the size of the defense dept.
As for the buying bad loans they don't have to reinvent the wheel here either - just copy & supersize the RTC model.
My guess is we see some of this if it gets bad and all of it if it gets real bad.
Billy Hill - you should be able to navigate to the haloscan links in lynx (have fun with that) - CR has configured them nicely so they old-fashioned URLs instead of javacript popups.
SC - nice pad. Looks like some silly.con exec has fallen on hard times.
"With regard to second liens on Option ARMs, it is very difficult for us to know which customers have second liens on an individual loan so it is quite difficult for me to give you a perspective on that."
Thanks bode for that.
Tanta,
If you're out there, can you give this a look? Is this true -- it's difficult for a lender to know how many 2nd liens are out there on their portfolio of 1st mortgages?
I'm guessing one or two responses:
Yeah, it is tough. You could compile that information, but it would be expensive. SOP. No big deal.
or
They're full of it. It's easy to find this out. They don't want to know.
(Now that I think about it, it's probably #3 - somewhere in between. It's complicated.)
((Now that I think about it more, it's not easy being an ill-informed rube. What I wouldn't give for a smidge of knowledge. And a better fashion sense. Free cash flow would be nice. A villa . . . ))
I bet it wasn't an exec, but rather somebody with way too little income to afford that place at bubble prices. I bet they have increased their loan size to 115% of principal on their Option Arm.
Billy Hill - since I am bored I installed lynx, and now see that I was wrong. The haloscan links show up as plain URLs in Firefox but are loaded via scripts in the html. Don't see a way around that...
SC - ok, here is the owner. More Detroit than dot.con.
It appears from the info above that Google is hosting the site. As they provide only the infrastructure and not the content, a strongly-written letter to them stating that one of their clients is running a website promoting fraud and possibly in violation of OTS regs as well as IRS/ICE law is one option. It might get the site shut down.
Another thought is that this is a honeypot set up by google to catch hackers, and not even a legitimate site.
BTW I'm being nice and assuming that you aren't the owner of the site promoting it through blog spam ...
Registrant Contact:
Whois Privacy Protection Service, Inc.
Whois Agent ()
+1.4252740657
Fax: +1.4256960234
PMB 368, 14150 NE 20th St - F1
C/O fakepaycheckstubs.com
Bellevue, WA 98007
US
It's true. Usually lenders don't know whether or not there are second liens unless they issue them simultaneously. Same things goes for MBS where investors do not know CLTVs, just OLTVs.
Those HELs WAMU is holding are absolute toxic waste. Might as well just write them off now with 100% severity. If they are only geting 70 to 75 cents on the dollar for prime loans, imagine what they are going to get out of subprime McMansions one year from now. 50 cents?
The Option ARMs haven't quite reached the point of explosion...yet. Most have a NegAm cap of 115, but many are already nearing the point of being underwater if you take into account negative home price depreciation.
o mention of closing commercial lending operations in the dc / mid-atlantic area?
Who is this Brian...
And how does he get around so fast?
Certainly not me.
As if everyone had an average amount of equity. If 1/3 own outright, want to guess how the averages for those with mortgages are distributed....I'm guessing some portion of that "safe" 66% LTV average is above 80%.
Anyone hazard a guess on the number of WaMu employees surfing Dice.com or Monster during the call?
All, I wanted to try embedding a spreadsheet - and this gave me an excuse. WaMu clearly has some issues as prices fall!
Best to all.
Does Wamu have a buyback risk?
The number that jumped out to me was the $43.3b in 2nd lien Home Equity/HELOCs. Is there any reason to believe they were more conservative with these than with the rest? They could be SOL on a lot of these...
All, I wanted to try embedding a spreadsheet - and this gave me an excuse.
Pretty cool... and just in time for a Super Bowl Pool too...
I was in my small town bank today doing business and asked if they had any foreclosures. We never loan money like that, was the answer. It amazing who did and didn't get caught up in this.
jo6pac
The race to the bottom continues.
All, I wanted to try embedding a spreadsheet - and this gave me an excuse.
Worked well for me, even on my antique version of Firefox. Thanks, CR!
"The last category is option ARMS. Option ARM loans with original LTV> 80% totaled $3.4 billion, or 6% of the total option ARM portfolio."
But what percentage of those loans have a 2nd? So, maybe LTV>80% is only 6%, but what is CLTV>80%?
Does anyone know if that was addressed?
Maybe I'm just being overly suspicious, but . . .
Spreadsheet is very cool, a whole new dimension added to the wonderful graphs and commentary. Hope to see more of them in the future
Look at the growth rates in the 2nd mortgage portfolio from 2006 to 2007, they were writing less low LTV and more high LTV. Just like from 2005 to 2006, just looking at those numbers alone one would have thought nothing bad happened in 2007
just in time for a Super Bowl Pool too...
now there's an idea. I am going to take out a 100 LTV HELOC so that I can go long on the PACKERS!
Welease Brian!!!
Nice work there. And damn well glad to see someone ask about CA concentration.
"Can you tell us what percentage of your portfolio is newer vintages and what percentage is California?"
I assume they are not talking about wine, or it must have been a very bad year.
Coolio on the spreadsheet.
Apologies if this has been commented upon--I've been following via Google reader and missing the comments, mea culpa--but am I to understand from this LA Times article that the nation's largest mortgage lender, Countrywide, no longer offers any non-conforming (i.e., $417K +) loans???
The LA Times. Countrywide Financial Corp., stuck with tens of billions of dollars in alternative mortgages it cant sell, is pushing customers to refinance into traditional loans that can be easily unloaded by the struggling lender.
The home-loan giant seeks to have $12 billion of these exotic loans refinanced into uncontroversial mortgages and has told its sales force to pull out all the stops to get borrowers to go along, internal documents show.
Its unclear exactly what kinds of loans are in the $12-billion refinance mix, except that they are for less than $417,000 the limit for purchase by Fannie Mae and Freddie Mac.
A senior Countrywide loan officer described them as a hodgepodge that includes many adjustable-rate mortgages with optional ultralow payments made to borrowers with good credit who obtained them on a stated income basis without documenting their earnings.
Countrywide is desperate to dump them to recoup the capital by refinancing them into marketable loans, the loan officer said. Its the equivalent of a manufacturer who gets stuck with a ton of unsold merchandise after the Christmas season. So he says, Lets liquidate the inventory.
The documents describing the program make clear that the replacement loans must be conforming adhering to the standards of Freddie Mac and Fannie Mae or government loans, the highly documented mortgages that can be backed by the FHA or VA.
You must figure out how to originate every loan as a Conforming or Government loan! the instructions read. Ineligible Loan Types: Do not originate!!!
http://www.latimes.com/business/la-fi-countrywide17jan17,1,4131267.story?coll=la-headlines-business&ctrack=6&cset=true
There's more fun in the article, which I hope I haven't over-quoted.
But does this language mean 1) don't refinance unless it's conforming! or 2) don't finance ANYTHING unless it's conforming!
?
MTHood,excellent question.In the body of the text CLTV is clearly distinguished from LTV.I suspect that is a clue.And I would also bet the legal team had some advice on how to say things.Carefully.
The best thing about today. CongressKritter Kaptur confusing Hank & Ben. Ohio's out migration may eliminate the need for a CongressKritter some day. I've never been to Ohio and hope I never do.
YouTube - Marcy Kaptur Gets Real Confused
Not really on topic but somewhat related:
I was listening to Kudlow on the radio on the drive home.
They had that Wayne Angel, an ex Fed governor who I hate on the show.
His remarks: that the Fed should have cut at least 100bps more by now, with another 100 coming...
his rationale: we "need" to drive safe investment yields so low that investors are FORCED to look elsewhere for more attractive yields. That elsewhere being the MBS market.
Made me want to puke.
MTHood,
Yeah, what percentage of those 80%LTV's have a second to make up the rest.
CountryFried was sooo 2007...
WaMu is 2008. I take Wells to buy 'em out but heard rumors that Morgan may be sniffing around this corpse.
BTW CR...I'm just seeing some logo what's my house worth. No spread sheet.
Will try another browser, but I have the most recently updated Firefox...
Dunno.
Cheers,
No spread sheet here either.
Good heavens, what does this mean:
"Given home price declines in key states like California , Florida , the severity rates for home equity can approach 100%, for example."
CR,
1) just very quickly, how do you embed spreadsheets?
2) please thank this Brian character on behalf of us all
Again, on days like today, we say thanks for this blog.
CR,
Internut Exploder works.
Not sure what's missing in Firefox. Not seeing a plugin for GoogleDocs. I'll work on it tommorow. Tired of IT problems today.
Cheers,
"I wanted to try embedding a spreadsheet"
hot damn! Never seen this before...!
"drive safe investment yields so low that investors are FORCED to look elsewhere for more attractive yields"
Well, so far a 3-handle on the 10-year hasn't managed to cut it. I'm inclined to bet that a 2-handle wouldn't either.
Hell, wasn't the raison d'etre of these products the reach for yield?
Texas Supreme Court Justice Charged in Home Arson Case / Mortgage Co. sued in June 2006 to foreclose after Judge missed Five Payments
- NY Times
Wamu has bigger pronlems: RATIOS
Citi goes fo another 2B. Someone at well somebody gots some explaining to do unless it was a call
Nice work on the spreadsheet. You keep this up and you might be able to get your foot in the door at some local web dev shop, and that is no small task.
Of course you may have to compete with the 100 or so former mortgage brokers and agents who claim they are top notch designers with strong database backgrounds. good luck.
The spreadsheet works in my Firefox.
MTHood,
Tin Foil Hat...Security settings pretty high..custom...I'll have to poke around. I don't use Internut Exploder, so I'll have to compare notes from a completely insecure browser to one I've got.
Cheers,
CR - Now on Row 3400 and Col 69 in cell 129090 you will note that
hehe
You should be able to import FDIC history nums into excell and select periods for presentation reasons rather good stuff indeed. Have you access to their archive data? If not let me know.
FFDIC,
Nice. These are the people who are supposed to be charged with Defending the People. We need more Regulations So PURE GOV'T officials can PROTECT us from the EEEVILS of th4e free market.
Good luck with that.
Cheers,
FFDIC,
That is hoot - we just seem to do it larger in TX, no? - down here in the Houston area the DA who is quoted in the article got his tit caught in the wringer with an email trail that came out in discovery...ah sweet schadenfreude.
The spreadsheet works well even in Safari
If you want to review the call here you go
Washington Mutual Q4 2007 Earnings Call Transcript -- Seeking Alpha
Here's the embed code. I think. Replace [ and ] with -lt and -gt.
[iframe width='650' height='400' src='http://spreadsheets.google.com/pub?key=pvl3zkDR6eEPBa0cr0k_EMw&output=html&gid=0&single=true&widget=true']
Spreadsheet looks fine in Swiftfox for Ubuntu. The hard part was poring over the numbers in the sheet, and disbelieving how awful some of the numbers looked.
bZb
Yep, working in safari and opera. I've got some setting ef'd up in Firefox.
Cheers,
My firefox mostly works, but I cant get a left right scroll bar. Just up and down...
let me be more clear - my mouse when rolled over the ss will scroll it up and down, but there is no way to get it to show the columns to the right of what is initially visible.
I missed WaMu because of no interest but got some of C and MER in May - happy, happy!
Now neutral on gold but very interested (more so!) on silver.
WaMu misses ratios. MER takes on more debt. C has unknown issues..I follow this puppy but it is acting strange to me so I'm completely out.
Am busy looking at BMO me thinks this is a short bus and worth some attention.
Barley,
I'm buying physical silver tomorrow. Maybe a lump or to of gold.
Cheers,
Bloody hech...see the media spin on emergency measures for tax relief...spinners must be on the phones for hours..
"drive safe investment yields so low that investors are FORCED to look elsewhere for more attractive yields"
Now I may be a dumb Rube
but is the .015% I made in the last 2.5 preferable to -10%?
Moderately OT:
So much is happening all at once. Aren't there like six separate phenomena, that all worked together to run this damn thing up, and now working together to run it down? What's the total tab going to be?
Real estate wealth effect (about 10% of increased asset prices, or $200 billion)
Stopped, and possibly even reversed mortgage equity withdrawal: $?? billion
Securitized mortgages: $200 (???) billion
Bond insurers: $?? billion
Credit default swaps: normal corporate default rates on $45Tn of CDS's = $250Bn
Housing sector's direct impact on the economy: about $?? (100?) billion per year reduced.
Doesn't all this add up to a whopping bill?
In the case of the option arms, isn't the LTV at the recast more important than the LTV at origination?
physical silver? man if this continues i'm buying freakin' gun powder! and hiring skilling to safeguard my assets!
GS builds another 7B hedge fund.?
paranoidandroid,
No, the mortgage market would be a disaster if it relied on ongoing LTV, not to mention the appraisal issues involved. Everything is done as a function of original LTV, and original balance. The value of the home basically matters when the mortgage is over (i.e. refi or FC)
Geoff - a similar thing happens to me if resize my Firefox window. CR may be missing a tag, or it may be a fundamental flaw of the program. Try making the Firefox window larger if you can (perhaps close a sidebar).
"Foreclosure rates may be a kind of barometer for whats ahead. Lawmakers at all levels of government local, state, and national will look to take additional action if foreclosures keep rising, and the economic fallout continues, Blair suggested. This is the simple reality. Congress is already considering a number of proposals.
I very much believe in the market. But if market solutions fail to solve the problem, government will step in.
.
F. F - my problem is likely due to the fact that my monitor blew up recently, I haven't yet chosen a new one, and Im working the last two days on a laptop, at 14" screen size (diag.) (Painful...)
If there is a significant increase in payment when the loan recasts, the LTV at recast should be important--if it is over 80, then it will be difficult for the borrower to refi into another loan.
"I'm buying physical silver tomorrow"
I'm selling silver tomorrow and buying cattle. Ya gotta eat.
Whew,I am now reassured that WaMu is as solid as the ground I am standing on,and as safe as houses (rogers creek fault,-18% YoY).
As customer feedback - the spreadsheet shows up fine in FireFox 2.0.0.11 ( With all ad blocker plugins enabled) - scrolls up and down fine but no scroll bars. no scroll left and right but I suppose that's because there are no further columns on the right.
And, of course,thx, Brian and CR.
-K
The spreadsheet is a great addition in that it provides an easy means of reviewing the data within the confines of the article. Thanks!
FWIW: It displays, for all practical intents, the same in IE7, Firefox 2.0.0.11, and Safari 3.0.4 running under Vista Ultimate. YMMV
OT: I noted a vote of confidence for ex-FED Chairman Paul Volcker a few threads back. That reminded me of a widely published speech he gave at Stanford back in February 2005 - that went perty much unnoticed at the time. While I refreshed my memory I was dazed by the notion that words of this nature could be so easily ignored (dismissed) when delivered by a well respected and knowledgable expert. Around the same time there was recognition that a housing bubble was clearly forming in local markets the likes of San Diago. Therefore I find it difficult to accept the notion that the CEOs of those firms that were raking in record breaking profits had no knowledge that the models might be broke or that this thing could implode when the consumer ran out of $$. Just my opinion.
The Mess That Greenspan Made:
There's a Housing Jobs Bubble In San Diego
By Tim Iacono
Tuesday, July 12, 2005
The Mess That Greenspan Made: There's a Housing Jobs Bubble In San Diego
An Economy On Thin Ice
By Paul A. Volcker
Sunday, April 10, 2005; Page B07
An Economy On Thin Ice
paranoidandroid
If there is a significant increase in payment when the loan recasts, the LTV at recast should be important--if it is over 80, then it will be difficult for the borrower to refi into another loan.
AH. there you go, you used one of the magic words i mentioned: refi.
Yes, in case of refi it matters.
"I'm buying physical silver tomorrow. Maybe a lump or to of gold."
Good luck. No supply.
WAMU.. proactive in correcting declining home value issues.
Appraisal Scoop: California Appraiser Sues WAMU, First American, eAppraiseIT, and LSI - Refused to check "Stable"
Hey.....
It messes up my scrolling when I use the scroll wheel on me mouse.
WaMu sent me a credit card offer this week. I'm subprime.
"Too many people spend money they haven't earned, to buy things they don't want, to impress people they don't like"
-Will Rogers
Someone needs to say something about this! http://www.fakepaycheckstubs.com IS THIS LEGAL? No wonder why we have the subprime mess we have when lenders USE FAKE DOCUMENTATION to help PUSH the loan through Quickly SO THAT EVERYONE DOWN THE FOOD CHAIN (from loan processor to the loan officer to the actual lender) can make the commissions they "WERE" making during the booming 90's! Now we are BAILING OUT THESE CROOKS....SOUNDS LIKE the good ol' 1980's Savings and Loan BAILOUT DAYS to me! http://www.fakepaycheckstubs.com see it with YOUR OWN EYES!
CR, Tanta
Can we get dennisdman on spamming. It's getting annoying.
Cheers,
come on Misean....
you cant actually be bitchin bout that, can you, MR you tube?
"You must figure out how to originate every loan as a Conforming or Government loan!"
Umm, isn't telling this to a Countrywide Loan Officer kind of like Lt. Calley telling his men to "take care of these people"?
Lenders walking away from home equity loans rather than foreclosing - BloggingStocks
Lenders walking away instead of foreclosing. The latter is too much trouble and likely to produce next to nothing.
FFDIC, thanks for the link.
As a Republican Texan Mexican 'Merican (stuck in SoCal), I'm embarrassed.
Fed Chief's Reassurance Fails to Halt Stock Plunge - NY Times
Enjoy. If one look could say it all...
puhhhlleeeaze,
Huh? This guys been posting this for days on end. I get requests.
Sheesh...
Cheers,
I get request's......LOL
nice counter punch
Nice. These are the people who are supposed to be charged with Defending the People. We need more Regulations So PURE GOV'T officials can PROTECT us from the EEEVILS of th4e free market.
Which is ironic because Federal Reserve government officials and regulations to keep employment up at all costs were the cause of all this mess.
We could do what ever we wanted and didn't think through the consequences because we had regulations and regulators to protect us and do the thinking for us.
Maybe we just didn't have enough regulations.
have you turned your mouse 90 degrees?
"let me be more clear - my mouse when rolled over the ss will scroll it up and down, but there is no way to get it to show the columns to the right of what is initially visible.
Geoff"
ac,
I find your wisdom an anchor in this storm. And I thank you for agreeing with my friggin sarcasm. Sorry I'm in a mood now...but appreciate the backing.
And what I mean I'm in a mood now... puhhhlleeeaze...angs are out...as long as they last tonight.
Cheers,
Funny funny. Yes, I turned it. No effect.
Perhaps it's time for this!
The End of the World | Flash Videos
anyone got an explanation for the nikkei -post-sake-bomb lunch 400 pt rally?
there must be kool aide in that sake
Someone asked about second liens over the 80% LTV option ARMs, and here's what they said:
"With regard to second liens on Option ARMs, it is very difficult for us to know which customers have second liens on an individual loan so it is quite difficult for me to give you a perspective on that."
I don't really buy his answer, because if they made the option ARM and did the HELOC they full well should know all about it! I certainly know my "90% financing" was an 80% first lien and a 10% HELOC! I'm no Tanta, but when they bucket my loans one is an 80% LTV and the other is an 80-90% HELOC. Or am I wrong?
Are Allen, Dryfly and the rest of the inflation-ista gang still in the inflate-out-of-this-mess camp?
stinky, I'm just guessing that the hedgies are attempting to prop up the Nikkei to stop the feedback loop (U.S. --> Asia --> U.S --> Asia).
No basis for an opinion, just a guess.
stinky,
Nope...4?yen ain't spectacular...gold off, $ index flat. Noting there.
Some news nugget methinks.
Cheers,
That 70-80% LTV range on the option arm is probably very optimistic. Good thing those borrowers only have to pay the interest.
stinky,
4?yen should be
dollar/yen
Cheers,
jg,
Possible...we have expirations Friday before us. Dunno where to lok these days for reliable indicators.
Cheers,
By request:
YouTube - woody guthrie-this land
.
OT -- I know that there is lots of weakness in the statistic, but it is fun to cite, anyway:
Median price for a resale home here in La Jolla peaked at $2.4MM in May '06.
It is now down to $1.3MM:
San Diego here
jg
To tired to read that chart. But I'll accept your analysis of it. But I get 46% down.
I'm getting ammo and canned food this weekend.
Cheers,
Ha, ha, M-!
I might look into the PepperBall SA-4 gun (http://www.pepperball.com) Wallop of a baseball bat, with lots of pepper spray.
Not every miscreant deserves my Mossberg:
http://www.mossberg.com/images/Mossberg_Guns/930/New/50450.jpg
Misean - "I'm getting ammo and canned food this weekend."
I used to think 2000 rounds and 3 months was enough but I'm not sure anymore :}
r0m30,
I only have ~200 rounds for the Glock, ~100 rounds for the Browning shotgun, and 60 rounds for the rifle...and 2 months food. I am WAY behind the curve here...Thanks for the accounting. Gonna make the ammo makers happy on Saturday.
Cheers,
The spreadsheet works well even in Safari
Yes it does (even tho google docs says Safari is not supported)
Tax rebates of $300-$800 weighed - USATODAY.com
"Lawmakers and aides involved in the talks said the White House is pressing for tax rebates of $800 for individuals and $1,600 for married couples. Lawmakers were likely to settle on a $500 rebate for individuals, said an aide involved in the talks, with details for couples and people with children still being negotiated.
The rebates would likely be limited to individuals with incomes of $85,000 or less and couples with incomes of $110,000 or less, the aide said, speaking on condition of anonymity because no final decisions had been made."
If you are going to use my money to fund stupidity at least give me some of it.
"Foreclosure rates may be a kind of barometer for whats ahead. Lawmakers at all levels of government local, state, and national will look to take additional action if foreclosures keep rising, and the economic fallout continues, Blair suggested. This is the simple reality. Congress is already considering a number of proposals.
I very much believe in the market. But if market solutions fail to solve the problem, government will step in.
I think nationalizing mortgages is almost a sure bet at this point. At the very least I would expect the government to buy bad debt near par and to offer default insurance for new mortgages at little or no cost.
Otherwise we're looking at a complete collapse of housing and mortgage lending, not just a serious downturn.
People should still be mad as hell if this happens. This mess was absolutely forseeable and avoidable.
Also understand that one way or another this is coming out of your pocket. Either through taxation, or more likely, devaluation of your savings.
We may also pay the price in terms of long-term loss of freedom in markets and financial matters. And those loss of freedoms may lead to a less dynamic and competitive economy.
We could languish for years in a morass of regulation and distrust while we see opportunity, influence, and fulfillment slip through our hands into others who've maintained more flexible economies.
"Lawmakers were likely to settle on a $500 rebate for individuals" sweet! beats that last one i got for like $43.
Who needs helicopters when you got the post office?
Lots of loans would move from >80% LTV category to
Lots of loans would move from over80% LTV category to under70% category if inflation spikes 20-30% over the next few years and housing follows suit (on average). Seems the obvious solution.
Got gold?
ac,
If that happens I'm outa here, and losing that once shiny US citizenship thingy. F this.
Oh yeah, I'm f'ing angry.
Cheers,
gn,
Yes, lots and silver.
Cheers,
I wonder what will get WaMu first: credit losses or a criminal indictment from the eAppraiseIT disgrace?
The dumb sonsabitches wrapped it in a nice bow for the DOJ with their email chains.
As an aside, eAppraiseIT is a corporate name straight out of a Dilbert cartoon. You need both the "e" and the "IT" to make Goddamned sure everyone knows the process is automated, streamlined and forward-thinking.
ac, with no possibility of wage inflation keeping up the brown shirts own the beltway.
err ,,, would own the beltway
easy there cal...
it's not really your money anyway, as we've been running massive deficits for years...
and it was'nt just the under 110 crowd that was part of the problem.
remember all those xotic trader's ....
Did just that in the Seattle Seahawks vs Pitt Steelers Super Bowl a few years ago. Drew $250,000 on my BofA HEL for a week. Bet it mostly on Super Bowl Props made a 10% return and put the $250,000 back in the bank.
But I am a professional gambler and wouldn't recommend this for you.
just in time for a Super Bowl Pool too...
now there's an idea. I am going to take out a 100 LTV HELOC so that I can go long on the PACKERS!
Shnapster | Homepage | 01.17.08 - 9:54 pm | #
Lenders walking away instead of foreclosing. The latter is too much trouble and likely to produce next to nothing.
That's insane. So what happens 20 or 30 years down the road when the homeowner dies... probate can't clear title unless the lien is paid ?
I hope the servicers can find all the documents after that many years.
If you don't think the high-end in the Bay Area is in trouble, read this ad from Craigslist for a house in the Santa Cruz mountains. As I said in earlier posts, more rentals at 2X the going rental rate are popping up. This one is truly amazing, and very revealing... I especially marvel at how they are trying to rent out different parts of the house separately! It is not a typo, they are asking $12,000 per month... (Note: emphasis added is mine).
"$12000 / 6br - Los Gatos Mountains, Estate Living (los gatos)"
Enter the world of luxury and have it all. Gated estate on the best street in the Los Gatos Mountains, circle driveway with fountain, 8000sf+ home, pool/spa, pool house decking and BBQ area. Wine cellar with room to set and sip wine. One car attached garage. Close to all schools and store. Master bedroom has fireplace & steam shower. So many wonderful thing about this property, must see it. Rental price is for main house,pool house,pool and surrounding area. Additional areas & structures may also be rented. 1200sf, garage/workshop for $1200. 1 Bedroom guest house for $1500. 4 stall horse barn with paddocks & riding arena for $1500. Must see it to believe it.
Here's the link:
craigslist | Page Not Found
Since a few things on this thread are about browsers, let me sneak this in: One of my computers (not this one!) uses the lynx browser, supposedly for security reasons. Is there any way to view the comments section with it? I just want the plain-vanilla text comments, could struggle on without graphics or spreadsheets.
Mortgage Pig hasn't been around for a while. I suggest it could be used to flag major BK's or resignations.
Sorry for the OT post just above. I posted on the Bay Area thread, but that thread is dead...and this was too good not to post!
I think nationalizing mortgages is almost a sure bet at this point. At the very least I would expect the government to buy bad debt near par and to offer default insurance for new mortgages at little or no cost.
It would be pretty easy to re-nationalize or de-privatize Freddy & Fannie... just a couple roll call votes & a presidential signature... cut the checks & buy out the 'stockholders'.
Or just expand FHA... to the size of the defense dept.
As for the buying bad loans they don't have to reinvent the wheel here either - just copy & supersize the RTC model.
My guess is we see some of this if it gets bad and all of it if it gets real bad.
Nite all, and don't think it hasn't been a little slice of heaven...cuz it hasn't.
Can't find it..use your imaginations.
Cheers,
Billy Hill - you should be able to navigate to the haloscan links in lynx (have fun with that) - CR has configured them nicely so they old-fashioned URLs instead of javacript popups.
SC - nice pad. Looks like some silly.con exec has fallen on hard times.
Gonna make the ammo makers happy on Saturday.
Ammo prices have gone even crazier than house prices over the last couple of years. Even bargain basement 9mm and .38 are expensive to shoot now.
"With regard to second liens on Option ARMs, it is very difficult for us to know which customers have second liens on an individual loan so it is quite difficult for me to give you a perspective on that."
Thanks bode for that.
Tanta,
If you're out there, can you give this a look? Is this true -- it's difficult for a lender to know how many 2nd liens are out there on their portfolio of 1st mortgages?
I'm guessing one or two responses:
or
(Now that I think about it, it's probably #3 - somewhere in between. It's complicated.)
((Now that I think about it more, it's not easy being an ill-informed rube. What I wouldn't give for a smidge of knowledge. And a better fashion sense. Free cash flow would be nice. A villa . . . ))
F. Frederson,
I bet it wasn't an exec, but rather somebody with way too little income to afford that place at bubble prices. I bet they have increased their loan size to 115% of principal on their Option Arm.
Billy Hill - since I am bored I installed lynx, and now see that I was wrong. The haloscan links show up as plain URLs in Firefox but are loaded via scripts in the html. Don't see a way around that...
SC - ok, here is the owner. More Detroit than dot.con.
Ok, my netscraping is done for the night. Laters.
ShortCourage- If you don't think the high-end in the Bay Area is in trouble, read this ad from Craigslist...
It looks like he's also selling his golf shoes
craigslist | Page Not Found
and an entertainment armoire
craigslist | Page Not Found
and a saddle
craigslist | Page Not Found
He's also selling a lot of cars but, unfortunately, no ponies.
Conjure Bag says, "Damn it, will someone please find a pony for mp?"
CB never heard the story of the little boy shoveling a barn full of horse manure? "There's gotta be a pony in there!"
Browsers, the spreadsheet and comments:
Konqueror -- has access to comments, shows spreadsheet, has scrollbars
Firefox 2.0.0.4 -- has access to comments, shows spreadsheet, no scrollbars
OffbyOne -- No comments, No spreadsheet
Lynx -- No comments, No spreadsheet
Links (text mode) -- No comments, No spreadsheet (can't remember how to start framebuffer video mode).
If I have any other browsers on this machine, I've forgotten about them.
In answer to others, spreadsheet looks to have six columns total
Firefox 2.0.0.4 -- has access to comments, shows spreadsheet, no scrollbars
Mose over the spreadsheet, right click. Select "This Frame" then "Open Frame in New Window" to see the entire sheet.
On the embedded sheet I only see about two thirds of the sheet. I can scroll up and down but not side to side.
/spatch
Dennisdman:
nslookup http://www.fakepaycheckstubs.com
Server: 68.87.68.162
Address: 68.87.68.162#53
Non-authoritative answer:
canonical name = ghs.google.com.
http://www.fakepaycheckstubs.com
ghs.google.com canonical name = ghs.l.google.com.
Name: ghs.l.google.com
Address: 64.233.179.121
Dennisdman,
It appears from the info above that Google is hosting the site. As they provide only the infrastructure and not the content, a strongly-written letter to them stating that one of their clients is running a website promoting fraud and possibly in violation of OTS regs as well as IRS/ICE law is one option. It might get the site shut down.
Another thought is that this is a honeypot set up by google to catch hackers, and not even a legitimate site.
BTW I'm being nice and assuming that you aren't the owner of the site promoting it through blog spam ...
more:
Whois Server Version 1.3
Domain names in the .com and .net domains can now be registered
with many different competing registrars. Go to InterNIC | The Internet's Network Information Center
for detailed information.
Domain Name: FAKEPAYCHECKSTUBS.COM
Registrar: ENOM, INC.
Whois Server: whois.enom.com
Referral URL: eNom - domain name, internet services, dns hosting
Name Server: DNS1.NAME-SERVICES.COM
Name Server: DNS2.NAME-SERVICES.COM
Name Server: DNS3.NAME-SERVICES.COM
Name Server: DNS4.NAME-SERVICES.COM
Name Server: DNS5.NAME-SERVICES.COM
Status: clientTransferProhibited
Updated Date: 04-mar-2007
Creation Date: 04-mar-2007
Expiration Date: 04-mar-2008
Registrant Contact:
Whois Privacy Protection Service, Inc.
Whois Agent ()
+1.4252740657
Fax: +1.4256960234
PMB 368, 14150 NE 20th St - F1
C/O fakepaycheckstubs.com
Bellevue, WA 98007
US
mp,
Ask and ye shall receive...
A pony for Conjure
Pony For Sale
The description is well - you read it..
"This pony must go! Totally bombproof. He has no vices and is a great little project pony."
What kind of vices can a pony have??
Hello,
Does anyone have an accurate read on the total volume of home equity loans outstanding and the delinquency rate.
According to the link below ( scroll down to line 45), outstanding volume in 2006 was $1,1019.2 bln. Any guesstimate on write-offs for 2008?
FRB: FEDS paper 2007-2007-20--Data, screen reader format--April 2007
MTHood,
It's true. Usually lenders don't know whether or not there are second liens unless they issue them simultaneously. Same things goes for MBS where investors do not know CLTVs, just OLTVs.
Those HELs WAMU is holding are absolute toxic waste. Might as well just write them off now with 100% severity. If they are only geting 70 to 75 cents on the dollar for prime loans, imagine what they are going to get out of subprime McMansions one year from now. 50 cents?
The Option ARMs haven't quite reached the point of explosion...yet. Most have a NegAm cap of 115, but many are already nearing the point of being underwater if you take into account negative home price depreciation.
mp,
Thanks for those other Craigslist links. This site is an awesome source of information!