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My sources report that several small Orange County, CA based lenders who specialize in prime mortgage financing are facing an exceptional amount of loan repurchases that could severely cripple their ability to operate.
My sources report that Opteum, a mid-size reseller of mortgage debt has repurchase notices out to American Sterling Bank for approximately $25 million. American Sterling focuses primarily on A-paper (prime) mortgages.
Another source reports that Stearns Lending (not affiliated with Bear Stearns); another regional lender is also facing a large number of buy-backs, primarily on its second mortgage products.
If these reports are true it would represent a spread of the mortgage backlash from the subprime market in to the prime mortgage market. On February 28th Ben Bernanke stated that the weakness in the subprime market had "no indication" of spreading to the greater prime market in general.
Last 3 posts by Morgan
- Subprime Bananas - June 28th, 2009
- Roubini: No confidence in government exit strategy - June 24th, 2009
- Goldman bonuses largest in firm's 140-year history - June 21st, 2009
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