Mortgage market mess gets worse

[thorshammer 0]

Stock market takin' it in the can, mortgage lender First Magnus croaks, the #1 lender Countrywide talking about filing for bankruptcy status......

 

today is total hell in the mortgage world......and of course I own a mortgage brokerage

 

I need phillybear to give me some options on how to off myself...

[Cdub100 3,474]

Choke on your spurs hat?

[thorshammer 0]

Choke on your spurs hat?

and let you drape a Pissons flag over my lifeless body afterward.....

 

 

:alsodidyouhearthatSpursarechamps:

[mobb_deep 919]

Without going into specifics, I work for a major title insurance co. Things aren't looking too pretty over here either.

[TimmySmith 2,782]

The fact that American Home Mortgage, which holds one of my mortgages, declared bankruptcy, and it is NOT a sub-prime lender is sort of frightening. And the only reason it went belly up is because underwriters got skittish and called in their markers. Throwing out the baby with the bathwater.

[NorthernVike 2,081]

the #1 lender Countrywide talking about filing for bankruptcy status......

 

 

Link? seriously, please.

 

I have not seen anything on this.

 

S&P lowered it rating on them to A-/A-2 but that hardley indicates bakruptcy, no?

[SigEp316 0]

Link? seriously, please.

 

I have not seen anything on this.

 

S&P lowered it rating on them to A-/A-2 but that hardley indicates bakruptcy, no?

 

 

they were having severe liquidity issues as is IndyMac bank....

[thorshammer 0]

Link? seriously, please.

 

I have not seen anything on this.

 

S&P lowered it rating on them to A-/A-2 but that hardley indicates bakruptcy, no?

Im going to paste part of the story here. Its from Forbes but i have seen a bizzillion other sources inside my industry saying the same thing:

 

Financial Services

Countrywide, Markets On The Ropes

Liz Moyer, 08.16.07, 1:53 PM ET

 

The credit crisis is threatening to take down one of the biggest U.S. mortgage lenders, Countrywide Financial, which Thursday rocked financial markets by disclosing that it had to tap all of an $11.5 billion credit line because of ongoing funding problems.

...........

 

"If enough financial pressure is placed on Countrywide, or if the market loses confidence in its ability to function properly, then the model can break, leading to an effective insolvency," wrote Merrill Lynch research analyst Kenneth Bruce in a report Wednesday that brought up the "b" word in the context of Countrywide. "If liquidations occur in a weak market, then it is possible" for Countrywide "to go bankrupt."

 

http://www.forbes.com/home/business/2007/0...ountrywide.html

[thorshammer 0]

Here is info on the stock downgrade from the same Forbes article:

 

......Two major credit ratings agencies, Fitch and Moody's (nyse: MCO - news - people ), downgraded their ratings for Countrywide sharply on Thursday......Fitch downgraded Countrywide two notches, to BBB+ from A, putting it just two notches above junk grade. The ratings firm lowered Residential Capital to BB+ from BBB, making it officially junk grade.

 

My quick take: This thing is going to get alot worse in the next 15 days. Mark my words. I think people will have a hard time doing any loans, including A paper. This virus that started with the subprime market has spread to the Alt-A and 2nd lien markets and could even hurt the real players; Fannie Mae & Freddy Mac! Here are 2 shocking facts: In the last year over 70 Big lenders have shut down. Since Nov. 2006, over half the loans available to the public have ceased to exist.

[kutulu 1,564]

If countrywide goes belly up, do I get my house for free.

[Cdub100 3,474]

If countrywide goes belly up, do I get my house for free.

 

:hyper:

[edjr 5,784]

RLLD?

[RLLD 3,588]

RLLD?

 

What?

 

This is all the sh!t I have been trying to tell people for months, coming to pass. When I tried to warn everyone all I got was sanctuary dumbsh!ts coming over with their simpleton versions of supply and demand. I told you this was coming.

 

The best part, this isnt the worst of it, the next sequence is going to be twice as bad as this summer; but hey, once I start explaining it people will b!tch and cry....

 

Next year....is going to be dicey....

[Ravens 03 0]

Link? seriously, please.

 

I have not seen anything on this.

 

S&P lowered it rating on them to A-/A-2 but that hardley indicates bakruptcy, no?

 

This may actually happen.

 

Their paper has been downgraded to junk and that will cost them plenty.

[RLLD 3,588]

This may actually happen.

 

Their paper has been downgraded to junk and that will cost them plenty.

 

Countrywide is in very real danger right now, but they have good liquidity from which to fight. It's only going to get worse so to be very frank, they are merely delaying in the hope that the market will rebound. If the fed doesnt call an emergency session pretty soon, its going to be too late for Countrywide and many others.

[joneo 537]

Without going into specifics, I work for a major title insurance co. Things aren't looking too pretty over here either.

 

 

Hey focker, maybe you can explain something for me. WHY THE FOCK DO I HAVE TO PAY TITLE INSURANCE? If the title company focks up, they should have to pay, not me. That is total bu11sh1t. Title company gets paid to do a job and if they don't do it right, BAMM... It's my ass hanging out. BS BS BS BS BS BS BS BS BS B S B S

[RLLD 3,588]

Hey focker, maybe you can explain something for me. WHY THE FOCK DO I HAVE TO PAY TITLE INSURANCE? If the title company focks up, they should have to pay, not me. That is total bu11sh1t. Title company gets paid to do a job and if they don't do it right, BAMM... It's my ass hanging out. BS BS BS BS BS BS BS BS BS B S B S

 

[thorshammer 0]

RLLD, what do you think about the next 12-18 months? I hate to be the predictor of doom N gloom, but this does not look good. I dont think the Fed wants to lower because the inflation numbers are just barely in their comfort range but if they dont do something, this whole bag could come unraveled. Im not sure what it will take to lure investors back into the mortgage relm but if they dont come soon, Fannie/Freddy could get into trouble.

[Yer mom 2]

I must first extend props to RLLD for his very accurate perspectives, I knew it was coming but not quite to this extent or what it may soon become...

 

 

Stock market takin' it in the can, mortgage lender First Magnus croaks, the #1 lender Countrywide talking about filing for bankruptcy status......

 

today is total hell in the mortgage world......and of course I own a mortgage brokerage

 

I need phillybear to give me some options on how to off myself...

 

 

I run a shop myself. If your not doing it already id highly recommend getting familiar with and doing FHA loans. I've done a pretty heavy 180 turn from refis to purchases (although you can refi with FHA as well). Homes are getting harder to sell with lending liquidity issues and guideline changes (as im sure your well aware) and im getting tons of purchase clients now since sellers are dropping prices a bit.

 

Guidelines/rates/closing costs for FHA loans are very favorable and keeping me slammed, as people flock in bunches out of the industry im on cruise control, at least for the time being...

[buffalobillsffl2003 0]

So when is the first boat to Chiner?

 

 

I reave you behind....you go watsh Amerikan Ider before Repo Man Reaper take away Talmudvision.

 

[RLLD 3,588]

RLLD, what do you think about the next 12-18 months? I hate to be the predictor of doom N gloom, but this does not look good. I dont think the Fed wants to lower because the inflation numbers are just barely in their comfort range but if they dont do something, this whole bag could come unraveled. Im not sure what it will take to lure investors back into the mortgage relm but if they dont come soon, Fannie/Freddy could get into trouble.

 

OK...here goes....

 

We are now feeling the pain of the fed raising rates and holding them there, which forced up a bunch of BS ARM's which exist at roughly twice the cost of the intrinsic value of the homes to which they cover. over the last few months about $1.5 trillion worth of these ARM's died, people stopped paying, foreclosures resulted. Now, allllll those people who have been through forclosure are out of the market-done-not going to buy for another 10-15 years....

 

An entire segment of the lowest part of the market has been obliterated. What is worse, a large number of lenders have either disappeared, stopped lending, or are making very-very tough to borrow at all. This is debilitating for first time buyers, even with money and good credit. So you have very small movement at the lower (poor people) end of the market. The only thing selling well right now is more expensive homes, people still have money and good jobs.... this is skewing the "median" house prince up, giving a false impression of health

 

Here is where is gets juicy. In November almost $3 trillion in ARM's reset....that's right, almost twice as much as what we are now enduring.....By the time Feb, march and April roll around you are going to see financial armegeddon.... Then, if the fed wont reduce the rate we get another $1 trillion reset later in the year....I hope this is painting a clear picture....

 

In order to avert a recession, if not an outright depression, the fed will be forced to open the reate discount window, they simply HAVE to. When you hear about central banks pumping billions into the markets to improve liquidity its like pissing on a gasoline fire. They are pumping in just enough in the hopes that consumer confidence will come back, and the market will pickup some head winds. In the short term, it very well might too....only to be destroyed over the next 6-8 months. Keep in mind, if the fed drops rates, China drops $'s......

 

This problem is much, much larger than anyone is letting on. Don't believe ANYTHING you hear from groups like NAR etc, they are outright lying and they know it. The only "safe" place for your money over the next few years will be something like a 10-year treasury bond.

 

Thank Alan Greenspan first for opening the spigot and not turning it off; then go thank your local realtor, broker and lender for being void of any sense of ethical standards, then thank those who sold in the last 4 years for not recognizing the moral hazard in which they were party to; lastly thank all those buyers who stupidly accetped poisonous loans they could not hope to repay just to feel big an important....

[edjr 5,784]

While I sit back having waited to buy a home and laughing.

 

[usurpers26 26]

Laughing? Why? 5-6% rates aren't good enough for you?

 

While I sit back having waited to buy a home and laughing.

 

[edjr 5,784]

Laughing? Why? 5-6% rates aren't good enough for you?

 

oh no.

 

but all the rich sanctuary people were trying to say I was poor and convince me I could only be cool if I bought a house (this started like 2 years ago)

 

If I had purchased a house that was over priced 2 years ago, I'd be pissed now.

 

The market has had a nice little correction, so it's good I didn't buy one.

 

Now that the fed cut the rate, now might be a great time to start seriously looking

[usurpers26 26]

Gotch'ya - was just curious at your reasoning

 

oh no.

 

but all the rich sanctuary people were trying to say I was poor and convince me I could only be cool if I bought a house (this started like 2 years ago)

 

If I had purchased a house that was over priced 2 years ago, I'd be pissed now.

 

The market has had a nice little correction, so it's good I didn't buy one.

 

Now that the fed cut the rate, now might be a great time to start seriously looking

[Cdub100 3,474]

oh no.

 

but all the rich sanctuary people were trying to say I was poor and convince me I could only be cool if I bought a house (this started like 2 years ago)

 

If I had purchased a house that was over priced 2 years ago, I'd be pissed now.

 

The market has had a nice little correction, so it's good I didn't buy one.

 

Now that the fed cut the rate, now might be a great time to start seriously looking

 

I'm pissed my house is worth 8k less then when I bought it in march and I thought that was a good time.

[usurpers26 26]

Yeah - but unless you planned on selling it within a couple of years, you can't worry about that.

 

I'm pissed my house is worth 8k less then when I bought it in march and I thought that was a good time.

[edjr 5,784]

Yeah - but unless you planned on selling it within a couple of years, you can't worry about that.

 

 

I guess, but I knew the market was horribly over priced, where I live.

 

It still is, it's focking crazy.

 

$315,000 for this?

[Cdub100 3,474]

Yeah - but unless you planned on selling it within a couple of years, you can't worry about that.

 

We are in this house for the long haul at least 15 years probable more.

[edjr 5,784]

We are in this house for the long haul at least 15 years probable more.

 

 

I could never be in the same house for 15 years, I would go out of my mind.

 

I've never lived in the same place for more than 3 years, EVER. I realize that was renting, but I still can't see myself in the same house/condo for more than 5 years, I'll go batsh!t.

[RLLD 3,588]

I'm pissed my house is worth 8k less then when I bought it in march and I thought that was a good time.

 

What area? Not all areas are being affected the same. You might be in a more stable market, you might be ok...

[edjr 5,784]

What area? Not all areas are being affected the same. You might be in a more stable market, you might be ok...

 

 

I live in Essex County, Massachusetts. Prices are still ridiculous.

[usurpers26 26]

Use to think the same thing until we bought our first place...something about owning your own place changed my ideals.

 

I could never be in the same house for 15 years, I would go out of my mind.

 

I've never lived in the same place for more than 3 years, EVER. I realize that was renting, but I still can't see myself in the same house/condo for more than 5 years, I'll go batsh!t.

[RLLD 3,588]

I live in Essex County, Massachusetts. Prices are still ridiculous.

 

OK, NE is getting hit relatively hard so far, Mass included. Still, plenty of money up there, and the area is considered desireable.

 

To put it in perhaps a better perspective; there is a historical relationship between salaries, rents, and mortgages. Salaries and rents have held to that historical relationship, but the mortgage levels deviated by more than 40% over the last 4-5 years. Hence, the "correction" you may have been hearing about will need to be between 30-40%.......yeah, take your home and lop off at LEAST 30% and you are starting to get a clearer picture.

 

Now, in your area that correction might only be 10-15%, but we just don't know right now, no one knows how hard each area will get hit, or how each area may affect another....

 

I have an opinion that this correction gains momentum and carries a bit beyond the expected change; once it goes down hard enough it will take time before people are confident enough to restore upward momentum. The good news it it WILL come back, as it has when housing bubbles occurred in the past. The bad news is that this bubble, and the resulting market, is unlike any other historical occurence here in the US. The closest measure we have is the Japanese RE implosion-which, by the way, they are still recovering from 10 years after...

[Cdub100 3,474]

What area? Not all areas are being affected the same. You might be in a more stable market, you might be ok...

 

SE Michigan, Shelby Twp. The housing market here has gone to sh!t. Which was great for me and the wife. First time home buyers with 20% to show we "could" put down and a credit score in the 800's got a great house in March on a 80/20 at 6.125% 30 year fixed and 10% 15 year fixed.

 

Like I said we don't plan on selling the house for a long time. It's plenty big for kids... when they come (4 br 2.5 bath 2400sqf) and a big back yard. So I'm not really worried about the price of the house now.

[Cdub100 3,474]

I could never be in the same house for 15 years, I would go out of my mind.

 

I've never lived in the same place for more than 3 years, EVER. I realize that was renting, but I still can't see myself in the same house/condo for more than 5 years, I'll go batsh!t.

 

You know I've moved just about every year. Up until now. I'm ready to live in one place for a while.

[NorthernVike 2,081]

Definate props to RLLD.

 

Now a quick ? for you. With the Fed easing do you see an upswing in the market? Say get back the 10% we've lost this last couple of weeks? or could it possibly go higher into the fall? Basicly I'm looking for and exact date to sell my mutual funds that are not tied to any retirement account.

 

PS: Any way to avoid the tax on investments I've held for over 10yrs?

[RLLD 3,588]

SE Michigan, Shelby Twp. The housing market here has gone to sh!t. Which was great for me and the wife. First time home buyers with 20% to show we "could" put down and a credit score in the 800's got a great house in March on a 80/20 at 6.125% 30 year fixed and 10% 15 year fixed.

 

Like I said we don't plan on selling the house for a long time. It's plenty big for kids... when they come (4 br 2.5 bath 2400sqf) and a big back yard. So I'm not really worried about the price of the house now.

 

You are in good shape. Ride this out. Also, the fed dropped rates by a half a point this morning. They finally "get it".

[TD Ryan2 315]

oh no.

 

but all the rich sanctuary people were trying to say I was poor and convince me I could only be cool if I bought a house (this started like 2 years ago)

 

If I had purchased a house that was over priced 2 years ago, I'd be pissed now.

 

The market has had a nice little correction, so it's good I didn't buy one.

 

Now that the fed cut the rate, now might be a great time to start seriously looking

 

Ed, I've been in your corner the whole time here.

 

With the rates being cut, now really IS the time to buy. What bothers me is your statement that, "now is a great time to seriously start looking."

You SHOULD have been looking since this past spring. If you are seriously consider buying a home, you SHOULD know exactly what's on the market, how long it's been there, when and how much the prices have dropped, etc. In order to be a "smart" buyer, you should have at least 6 months of data/information tracked. Some homes prices are being absolutely obliterated because owners don't have any other choice.

 

Ed, if you have the money to put down and no contingency, you are an absolutely SEXY buyer right now and you can practically make your own price on a house. If you're serious, get your head in the game because the opportunity is going to pass you by.

[RLLD 3,588]

Definate props to RLLD.

 

Now a quick ? for you. With the Fed easing do you see an upswing in the market? Say get back the 10% we've lost this last couple of weeks? or could it possibly go higher into the fall? Basicly I'm looking for and exact date to sell my mutual funds that are not tied to any retirement account.

 

PS: Any way to avoid the tax on investments I've held for over 10yrs?

 

Make no mistake, the fed cut the rates due to pressure from big business. They did not do this to help the people being hurt. This stops the bleeding(for now) but doesn't fix the underlying problem. Countrywide, Walmart, Home Depot et al will benefit from this; but the people holding poisonous loans are not likely to get relief.

 

What this does is save the economy, not fix the fact that trillions in more loans will default. The housing market will show improvement in the next 2-3 months before the next barrage hits.

 

Lenders, those who are left and willing to loan, are still struggling; Buyers are going to have to come armed with cash, and be ready to meet tougher standards.

 

It's not over yet, don't be fooled; the only thing "saved" is your 401k and stock investments. Which are going to get mauled again come February and March.