October is here, the next round of mortgage failures are coming

[RLLD 3,539]

The losses so far amount to about 10 percent of the forecast of $100 billion in losses.

 

"The disturbing number here isn't 10 percent ... but the $100 billion," Pomboy said.

 

With nearly $700 billion in ARMs in negative equity facing interest-rate resets, "depending on how much lenders can ultimately recover, this implies (bank) losses will be more like $210 billion to $346 billion," she said.

 

"And that's assuming the situation doesn't get worse."

 

In July, Federal Reserve Chairman Ben Bernanke had estimated the losses at $100 billion at the most.

 

But it appears Bernanke had underestimated those figures and their effects on the consumer.

 

In September, the Fed took the benchmark

 

Rink

 

 

If the employment numbers tomorrow indicate another drop in Sept then we can certainly expect the market, and the fed, to enter a moderate panic mode and react strongly. If this situation does not push them over the edge, Countrywide declaring for bankruptcy near the end of the year certainly will (my current prediction).

 

Remember, the subprime debacle that brought us to this present situation was just about half of what we are now going to enter.....stew on that for a few minutes...

 

I highly reccomend keeping an eye on your mortgage company, if they get into a problem area make sure your escrow is handled. Alot of people almost got screwed by American Home Mortgage on this crap.

[Franknbeans 46]

admit it, you're lubed up

[RLLD 3,539]

admit it, you're lubed up

 

Totally....

 

You realize, this all means that I actually learned something in college, and managed to apply it to a real-life scenerio....

[swirvenirvin 25]

My arm went up from 6.5 to 7.25 or something.. Not awful another $90 a month or so

[edjr 5,656]

My arm went up from 6.5 to 7.25 or something.. Not awful another $90 a month or so

 

 

How much was your condo? 100k?

[Cdub100 3,437]

My arm went up from 6.5 to 7.25 or something.. Not awful another $90 a month or so

 

 

dumb. there's a house for sale right across the street from me.

[TheNewGirl 1,057]

Another problem is that these houses that are vacant due to the defaulting look like sh!t on the outside...making the neighborhood look crappy. A nice house next to a crappy house. Great.

 

Dead lawn, over grown brushes, etc.

 

Another link you might be interested in RLLD:

 

I don't have the direct link, but it came fro Yahoo News yesterday:

 

 

 

FDIC Shuts Down NetBank Due to Defaults

Friday September 28, 6:27 pm ET

By Alan Zibel, AP Business Writer

 

 

FDIC Shuts Down NetBank Because of Excessive Level of Mortgage Defaults

WASHINGTON (AP) -- NetBank Inc., an online bank with $2.5 billion in assets, was shut down by the government on Friday because of an excessive level of mortgage defaults.

It was the largest savings and loan failure since the tail end of the industry's crisis more than 14 years ago. Federal regulators appointed the Federal Deposit Insurance Corp. as a receiver for Alpharetta, Ga.-based NetBank.

Customers with less than $100,000 deposited with NetBank will be protected by FDIC insurance.

While dozens of mortgage companies have closed due to soaring defaults of home loans made to borrowers with weak, or subprime, credit, those problems previously had occurred among non-bank lenders such as New Century Financial Corp. NetBank, in contrast, is federally regulated.

Loose mortgage standards in recent years -- especially among lenders catering to subprime borrowers -- have resulted in a spike in home loan defaults.

Bert Ely, a banking consultant based in Alexandria, Va., said NetBank was in "deep trouble" before the subprime mortgage market's woes accelerated this year. Regulators, he said, "should have closed it a long time ago."

While some Internet-only banks are successful, he said, operating one without retail branches can be a difficult strategy to maintain.

The FDIC said Friday that $1.5 billion of NetBank's insured deposits will be assumed by ING Bank, also a major online bank that is part of Dutch financial giant ING Groep NV. ING will pay $14 million for the deposits and receive 104,000 new customers.

NetBank, which had no physical branches, sustained significant losses last year "primarily due to early payment defaults on loans sold, weak underwriting, poor documentation, a lack of proper controls, and failed business strategies," the Office of Thrift Supervision said in a statement.

The FDIC said NetBank had $2.5 billion in total assets and $2.3 billion in deposits as of June 30.

The OTS oversees about 830 savings and loan institutions, or thrifts, ranging in size from giants like Seattle-based Washington Mutual Inc. to small community banks. By law, thrifts must have at least 65 percent of their lending in mortgages and other consumer loans.

The last major thrift to be closed by regulators was Superior Bank of Hinsdale, Ill. It had total assets of $1.9 billion and was shut down in July 2001. Its failure has so far cost the FDIC's insurance fund an estimated $273 million.

In June 1993, regulators shut down Western Federal Savings and Loan Association, which had total assets of $3.8 billion. That thrift's owners included former Treasury Secretary William Simon and former Federal Reserve Board Vice Chairman Preston Martin.

NetBank had reached a deal to sell its deposit accounts and other assets to privately held EverBank of Jacksonville, Fla., but EverBank announced this month that the deal fell through.

EverBank in July completed its acquisition of NetBank's mortgage servicing business, and the FDIC said Friday that EverBank will purchase about $700 million in mortgage loans.

"Customers of NetBank should have confidence and security knowing that they will have access to their insured funds in a timely and orderly manner," FDIC Chairman Sheila Bair said in a prepared statement.

The FDIC insures bank deposits of up to $100,000.

NetBank had $109 million in deposit accounts that exceeded the FDIC limit. Those customers will become creditors in NetBank's receivership, the FDIC said.

[RLLD 3,539]

Some of you gave me grief for assailing realtors, brokers, lenders and the greedy mf-ing sellers. Is it getting ANY clearer yet as to why I have been so pissed off by this all these months?

[Evil number 0]

Some of you gave me grief for assailing realtors, brokers, lenders and the greedy mf-ing sellers. Is it getting ANY clearer yet as to why I have been so pissed off by this all these months?

 

Greedy sellers? You get what the market says. Who would sell their house for a below market price? Realtors are paid to get the best price for their clients.

 

Lenders are the main culprit. Lending to people who realistically could not afford their homes. I know when i bought my condo a few years ago, they were really pushing ARMs but I was wary that the interest rates could not stay at historic lows forever and tied into a fixed rate.

[Strike 4,073]

Some of you gave me grief for assailing realtors, brokers, lenders and the greedy mf-ing sellers. Is it getting ANY clearer yet as to why I have been so pissed off by this all these months?

 

I made a LOT of money selling my house last year.

[TheNewGirl 1,057]

Greedy sellers? You get what the market says. Who would sell their house for a below market price? Realtors are paid to get the best price for their clients.

 

Lenders are the main culprit. Lending to people who realistically could not afford their homes. I know when i bought my condo a few years ago, they were really pushing ARMs but I was wary that the interest rates could not stay at historic lows forever and tied into a fixed rate.

 

 

I tend to agree with RLLD to an extent. Sellers are VERY greedy. STILL. While you do get what the market says, the market is also kind of powered by what the offers are, and what buyers are willing to pay.

 

When we first started looking for a home in 2001, we would put an offer on a house, and by that afternoon, it was another 30K higher than the full price offer. Sellers started to say..."Wow. Neighbor's house sold for full price, plus 30K. I am going to list mine at 20K MORE than what his sold for..." and they would sell. The greed continues, because sellers are now saying, "I paid $$$ for my house, I am not selling for less than $$$." Their house either sells (after being on the market for more than 90 days) or sits and sits. Housing prices will go down, because some people will take what they can get.

 

If you're willing to pay up to $500 for an iPhone, well, Apple is going to sell them for $600 - because what's another $100? Right? If people aren't willing to pay $500, and Apple knows this, they will sell them for $400.

[RLLD 3,539]

Greedy sellers? You get what the market says. Who would sell their house for a below market price? Realtors are paid to get the best price for their clients.

 

Lenders are the main culprit. Lending to people who realistically could not afford their homes. I know when i bought my condo a few years ago, they were really pushing ARMs but I was wary that the interest rates could not stay at historic lows forever and tied into a fixed rate.

 

We can agree to disagree; I submit that using the excuse that "hey, everybody was doing it" is not acceptable. Participation in a moral hazard is bad enough, attempting to somehow justify it is simply pathetic.

[Strike 4,073]

I tend to agree with RLLD to an extent. Sellers are VERY greedy. STILL. While you do get what the market says, the market is also kind of powered by what the offers are, and what buyers are willing to pay.

 

When we first started looking for a home in 2001, we would put an offer on a house, and by that afternoon, it was another 30K higher than the full price offer. Sellers started to say..."Wow. Neighbor's house sold for full price, plus 30K. I am going to list mine at 20K MORE than what his sold for..." and they would sell. The greed continues, because sellers are now saying, "I paid $$$ for my house, I am not selling for less than $$$." Their house either sells (after being on the market for more than 90 days) or sits and sits. Housing prices will go down, because some people will take what they can get.

 

If you're willing to pay up to $500 for an iPhone, well, Apple is going to sell them for $600 - because what's another $100? Right? If people aren't willing to pay $500, and Apple knows this, they will sell them for $400.

 

So are you going to take below market value when you sell your house? If not, you can't be in agreement with RLLD.

[Strike 4,073]

We can agree to disagree; I submit that using the excuse that "hey, everybody was doing it" is not acceptable. Participation in a moral hazard is bad enough, attempting to somehow justify it is simply pathetic.

 

ROFLMAO at someone suggesting that a person maximizing their profit in a free market economy is somehow immoral

[TheNewGirl 1,057]

So are you going to take below market value when you sell your house? If not, you can't be in agreement with RLLD.

 

And take negative equity for myself? No. I am not saying that people should sell for below market value, as I think that creates a whole 'nother can of worms for sellers. I am saying that sellers WERE and ARE greedy. They aren't willing to price their homes AT market value. "I bought mine for $$$, I want $$$ for it (above market value." Many people don't think in terms of the fact that the market IS going down. It would go down faster if sellers would price their homes at market value and not try and inflate and get as much money as they can. I think, due to the prices going up so much 5 years ago, many sellers are still a tad jaded in the fact that they can't and they won't get offers priced 20K more than what they are asking. Chances are people will be low-balling like mad.

 

Personally, I would chose to simply wait to sell. If I abolsutely HAD to move, meaning that there was NO choices left, then yes, I would have to sell and take negative equity in my home. If that means waiting and staying in our current too-small home for another 5 years, then that's the risk that we took when we purchased our home.

 

Luckily, we have a 30 year fixed at 5% or something like that.

[TheNewGirl 1,057]

ROFLMAO at someone suggesting that a person maximizing their profit in a free market economy is somehow immoral

 

I want to agree with Stirke, I don't think that sellers are doing anything WRONG, per se...

 

Sheesh...

 

I dont' know what I am saying anymore, LOL.

 

Carry on, RLLD!!!

[Strike 4,073]

And take negative equity for myself? No. I am not saying that people should sell for below market value, as I think that creates a whole 'nother can of worms for sellers. I am saying that sellers WERE and ARE greedy. They aren't willing to price their homes AT market value. "I bought mine for $$$, I want $$$ for it (above market value." Many people don't think in terms of the fact that the market IS going down. It would go down faster if sellers would price their homes at market value and not try and inflate and get as much money as they can. I think, due to the prices going up so much 5 years ago, many sellers are still a tad jaded in the fact that they can't and they won't get offers priced 20K more than what they are asking. Chances are people will be low-balling like mad.

 

Personally, I would chose to simply wait to sell. If I abolsutely HAD to move, meaning that there was NO choices left, then yes, I would have to sell and take negative equity in my home. If that means waiting and staying in our current too-small home for another 5 years, then that's the risk that we took when we purchased our home.

 

Luckily, we have a 30 year fixed at 5% or something like that.

 

TNG,

 

I think a lot of the reason you're seeing people unwilling to budge on price isn't because they don't want to but because they can't. They bought their house with an interest only loan and haven't made any inroads on the principle. They didn't have any money for a down so they can't afford to sell below what they paid because they'd have to make up the difference to the bank. They're upside down. Do I feel for them? Yes. But it's their own fault. And it's a mess. And it's why I, like you, have a fixed mortgage within the parameters I can afford.

[RLLD 3,539]

ROFLMAO at someone suggesting that a person maximizing their profit in a free market economy is somehow immoral

 

 

I know, Ken lay is DA BOMB!!

 

HINT: This wasn't a free market in action, it was just the opposite, as I have stated over, and over, and over....

 

I mean, it's not like anything bad resulted, right?

[Evil number 0]

RLLD,

please let me know the next time you are selling something at below market value. I might be interested.

[Evil number 0]

I know, Ken lay is DA BOMB!!

 

HINT: This wasn't a free market in action, it was just the opposite, as I have stated over, and over, and over....

 

I mean, it's not like anything bad resulted, right?

 

Ken lay comitted accounting fraud. selling your house at a price that someone is willing to pay is just plain old capitalism at work.

[RLLD 3,539]

RLLD,

please let me know the next time you are selling something at below market value. I might be interested.

 

Will do, providing you are a teacher, police officer, or fireman. I sold a house last year for half the "market price", but only to a teacher. Next time it comes around, I will post here.

[Strike 4,073]

I know, Ken lay is DA BOMB!!

 

HINT: This wasn't a free market in action, it was just the opposite, as I have stated over, and over, and over....

 

I mean, it's not like anything bad resulted, right?

 

So you think that the way to define whether it's a free market is whether something "bad" happened? How much did you pay for that college education that taught you this? It wasn't in any of the economics classes I took.

[RLLD 3,539]

Ken lay comitted accounting fraud. selling your house at a price that someone is willing to pay is just plain old capitalism at work.

 

Wrong.

 

Lay and Skilling committed fraud through the use of many tools, raptors etc....

 

The housing market was perverted by artificially low credit, speculation; corrupt realtors, brokers, appraisers and lenders. It was not a free market at all, the evidence is in the news everyday, it's not like I am, making it up.

 

The housing market of the last 5 years was a perversion of free market and capitalism, until you understand why, none of it will make sense I suppose, perhaps you should avoid the news in the coming months, it is going to get much worse...

[RLLD 3,539]

So you think that the way to define whether it's a free market is whether something "bad" happened? How much did you pay for that college education that taught you this? It wasn't in any of the economics classes I took.

 

Where did I say that, right, i didn't....that was a rather poor attempt at a strawman, even for you...

[Strike 4,073]

Where did I say that, right, i didn't....that was a rather poor attempt at a strawman, even for you...

 

Well you didn't offer any other justification. If you're gonna make a statement such as it wasn't a free market you should qualify it. If the only qualification is that something bad happened don't blame people for calling you on it. I don't know how you can say it wasn't/isn't a free market. Just because prices are exorbitant doesn't change that fact, even if you want it to be so.

[RLLD 3,539]

Well you didn't offer any other justification. If you're gonna make a statement such as it wasn't a free market you should qualify it. If the only qualification is that something bad happened don't blame people for calling you on it. I don't know how you can say it wasn't/isn't a free market. Just because prices are exorbitant doesn't change that fact, even if you want it to be so.

 

 

Since you have not been following all along, need to be spoon fed, cannot research, and cannot locate the search button:

 

Link

Link

Link

Link

Link

 

There is plenty more out there, the market was perverted, it was neither capitalism nor free market, it was a manipulated action with many participants, all of whom are culpable...

[itsjjw 0]

Since you have not been following all along, need to be spoon fed, cannot research, and cannot locate the search button:

 

Link

Link

Link

Link

Link

 

There is plenty more out there, the market was perverted, it was neither capitalism nor free market, it was a manipulated action with many participants, all of whom are culpable...

I think places like BoA and Countrywide should all be charged with whatever it was Lay and whomever else were charged with. They all defrauded the american people.

[RLLD 3,539]

I think places like BoA and Countrywide should all be charged with whatever it was Lay and whomever else were charged with. They all defrauded the american people.

 

Already under way actually, do a search for Countrywide in the news.

 

And check this out.

[Strike 4,073]

Since you have not been following all along, need to be spoon fed, cannot research, and cannot locate the search button:

 

Link

Link

Link

Link

Link

 

There is plenty more out there, the market was perverted, it was neither capitalism nor free market, it was a manipulated action with many participants, all of whom are culpable...

 

Yeah, just as I thought. I took a look at your first link. These are all links to your chicken little, blame everybody and make up reasons, threads about the housing market. And not based on sound economic theory that you supposedly learned in "college". What economics book teaches that people speculating about the future of the economic market somehow makes the system no longer free? Please answer that question or I have no reason to waste time reading the rest of your drivel. Because if we listen to you the stock market is not a free market enterprise either.

[KSB2424 3,086]

I think places like BoA and Countrywide should all be charged with whatever it was Lay and whomever else were charged with. They all defrauded the american people.

What is wrong with Bank of Americas No Fee Mortgage loans?

[RLLD 3,539]

Yeah, just as I thought. I took a look at your first link. These are all links to your chicken little, blame everybody and make up reasons, threads about the housing market. And not based on sound economic theory that you supposedly learned in "college". What economics book teaches that people speculating about the future of the economic market somehow makes the system no longer free? Please answer that question or I have no reason to waste time reading the rest of your drivel. Because if we listen to you the stock market is not a free market enterprise either.

 

I have answered it, in link after link, but you refuse to accept it.

 

I spent two years researching and writing my thesis on this topic, I know you won't understand it in a single post, but the evidence is out there. Artificially low credit created afrtificially cheap credit which led to housing becoming a speculative commodity that fed an inflationary frenzy which forced housing prices from their traditional relationship with salaries and rents; appraisers created false values while under pressure from realtors, brokers and lenders; brokers and lenders compartmentalized loans they knew woul fail into CDO's and pawned them off on investors as AAA products.

 

It was a massive fraud on a massive scale and free market influence was eliminated, what we are now observing is the market returning to it's normally free state which is painful for some, but if the government lets it run the market will correct itself. They need to leave it be, and let the free market work.

[edjr 5,656]

I have answered it, in link after link, but you refuse to accept it.

 

I spent two years researching and writing my thesis on this topic, I know you won't understand it in a single post, but the evidence is out there. Artificially low credit created afrtificially cheap credit which led to housing becoming a speculative commodity that fed an inflationary frenzy which forced housing prices from their traditional relationship with salaries and rents; appraisers created false values while under pressure from realtors, brokers and lenders; brokers and lenders compartmentalized loans they knew woul fail into CDO's and pawned them off on investors as AAA products.

 

It was a massive fraud on a massive scale and free market influence was eliminated, what we are now observing is the market returning to it's normally free state which is painful for some, but if the government lets it run the market will correct itself. They need to leave it be, and let the free market work.

 

 

 

You really think a family of 4 making 50,000 combined with bad credit shouldn't have been allowed to purchase a 300,000 home with no money down?

[Strike 4,073]

I have answered it, in link after link, but you refuse to accept it.

 

I spent two years researching and writing my thesis on this topic, I know you won't understand it in a single post, but the evidence is out there. Artificially low credit created afrtificially cheap credit which led to housing becoming a speculative commodity that fed an inflationary frenzy which forced housing prices from their traditional relationship with salaries and rents; appraisers created false values while under pressure from realtors, brokers and lenders; brokers and lenders compartmentalized loans they knew woul fail into CDO's and pawned them off on investors as AAA products.

 

It was a massive fraud on a massive scale and free market influence was eliminated, what we are now observing is the market returning to it's normally free state which is painful for some, but if the government lets it run the market will correct itself. They need to leave it be, and let the free market work.

 

Did you actually get a passing grade on this "thesis"?

[RLLD 3,539]

Did you actually get a passing grade on this "thesis"?

 

Yeah, but it included an analysis of previous housing bubbles, along with historical bubbles in other market segments in history. Oddly enough, this has happened before...

 

Something more than a surface analysis based on things you heard in high school is required to truly appreciate the free market dynamics.

 

Banks taking a bath? You DO realize that the fed is capitulating to the banks right? Lower the rate only helps the banks, only hurts you and I....it devalues the dollar, it makes prices for sh!t go up....it does not help those trying to buy, no.....it actually causes the long term rates to rise....and then makes the cost of buying a house rise.... this is simple market dynamics.....

 

So, if you think that all these events are only hurting banks I suggest you turn a blind eye to the current employment measures, commodities performance and your investments. This BS will hurt each and every one of us, instead of battling inflation the fed is now feeding it, so Countrywide and their ilk dont fold....and FOCKING ME in the process......yeah, only hurting the banks, focking priceless.....

[Strike 4,073]

Yeah, but it included an analysis of previous housing bubbles, along with historical bubbles in other market segments in history. Oddly enough, this has happened before...

 

Something more than a surface analysis based on things you heard in high school is required to truly appreciate the free market dynamics.

 

Banks taking a bath? You DO realize that the fed is capitulating to the banks right? Lower the rate only helps the banks, only hurts you and I....it devalues the dollar, it makes prices for sh!t go up....it does not help those trying to buy, no.....it actually causes the long term rates to rise....and then makes the cost of buying a house rise.... this is simple market dynamics.....

 

So, if you think that all these events are only hurting banks I suggest you turn a blind eye to the current employment measures, commodities performance and your investments. This BS will hurt each and every one of us, instead of battling inflation the fed is now feeding it, so Countrywide and their ilk dont fold....and FOCKING ME in the process......yeah, only hurting the banks, focking priceless.....

 

ROFLMAO. So maybe we should stop dumbing down our schools so we don't have people buying sh1t they can't afford, and then whining that their lender would "never do this to them" to quote one of your articles. I'm gonna assume she has a decent job yet couldn't understand the risks of the POS loan she took so she could afford a 500k house. Whatever. The bigger risk in all of this is people such as yourself using this as an excuse for our gov't to further make decisions for us on the assumption that we're not capable of doing it ourselves.

 

But WTF do I know. I'm just a guy with no morals willing to take advantage of the situation to enrich myself. God, I'm as big a doosh as Edjr, huh?

 

[AirRam 3]

I'd just like to add that I bought the house I'll close on this month below market value. Seller would have made above market value and close 45 days earlier if they took my initial offer. They bought new (now 7 years old) and unless they paid for a raging coke habit on a HELOC they would have stood to make $14k more if they took the first offer. Moral to the story: don't be a greedy biatch when selling your house. You ain't gonna retire early cause you sold for list price.

[BiPolarBear 476]

I made a LOT of money selling my house last year.

 

You and me buddy.

[Strike 4,073]

I'd just like to add that I bought the house I'll close on this month below market value. Seller would have made above market value and close 45 days earlier if they took my initial offer. They bought new (now 7 years old) and unless they paid for a raging coke habit on a HELOC they would have stood to make $14k more if they took the first offer. Moral to the story: don't be a greedy biatch when selling your house. You ain't gonna retire early cause you sold for list price.

 

Congrats man. Bear in mind that the market has changed though, and you live in Denver where the market has NEVER spiked as it did in many other cities. I moved to Denver after selling my house in LA. I bought about 2 and a half times the house here for 2/3's what I sold my house in LA for. Where in Denver are you BTW?

[TD Ryan2 315]

 

You really think a family of 4 making 50,000 combined with bad credit shouldn't have been allowed to purchase a 300,000 home with no money down?

 

 

kills me to admit it but, I'm proud of you edjr.

 

this is EXACTLY the problem.

 

 

blame lenders all you want.

blame realtors all you want.

But the fact is that the American People can't be defrauded if they aren't so focking stupid that they don't understand what they can and can not afford.

 

The MAJORITY of these real estate sob stories I read about have homeowners who's finances are similar to the numbers you posted above. ($50k per year/$300k mortgage)

The stories gloss over these very lopsided numbers and focus on how these poor people were duped and lied to and now their ARMS have adjusted.

NEWSFLASH! YOU COULDN'T AFFORD A $300K HOME TO BEGIN WITH!

 

it's all secondary that the lenders lied, the the Realtors lied, that the market is artificially inflated... these stories start (and could have ended) right at the simple fact that buyers could not afford these homes to begin with.

[swirvenirvin 25]

dumb. there's a house for sale right across the street from me.

 

 

Cool can you save it for me, we'll buy it as soon as we sell this POS condo