Comments on: A Quick Recap: The Day The Credit Died http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/ #1 Free Home Loan Modification & Debt Relief Help For US Home Owners - Truths, Facts & News About the Mortgage Industry Sat, 21 Nov 2009 12:13:18 -0700 http://wordpress.org/?v=2.8.3 hourly 1 By: Crisis and Opportunity « The Cocoa Beach Condo Market http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-7289 Crisis and Opportunity « The Cocoa Beach Condo Market Tue, 27 Nov 2007 14:44:56 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-7289 [...] 4, 2007 · No Comments August 3rd will likely go down as the definitive “line in the sand” day for mortgage lending in [...] [...] 4, 2007 · No Comments August 3rd will likely go down as the definitive “line in the sand” day for mortgage lending in [...]

]]> By: The Death Of Credit Is Forcing Your Options Out One By One - How To Fight Back And Boost Your Credit Score In 15 Seconds | The Arizona Housing Bubble | Watching The Arizona Real Estate, Credit, Lending, And Mortgage Crisis From A Consumer's Point Of View http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-2431 The Death Of Credit Is Forcing Your Options Out One By One - How To Fight Back And Boost Your Credit Score In 15 Seconds | The Arizona Housing Bubble | Watching The Arizona Real Estate, Credit, Lending, And Mortgage Crisis From A Consumer's Point Of View Thu, 16 Aug 2007 18:19:16 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-2431 [...] Morgan Brown points out on BlownMortgage - recent events have lead to what many are calling the Death of Credit. This of course meaning that [...] [...] Morgan Brown points out on BlownMortgage – recent events have lead to what many are calling the Death of Credit. This of course meaning that [...]

]]> By: Containment?? Subprime mess goes global at Blown Mortgage http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-1591 Containment?? Subprime mess goes global at Blown Mortgage Thu, 09 Aug 2007 20:04:37 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-1591 [...] Not to go all Cramer on you - but it?s a joke that Bernanke was allowed to sit in front of Congress and testify that things were contained; it?s a joke to think that things are getting better anytime soon; it?s a joke to think the global economy will not be affected. [...] [...] Not to go all Cramer on you – but it?s a joke that Bernanke was allowed to sit in front of Congress and testify that things were contained; it?s a joke to think that things are getting better anytime soon; it?s a joke to think the global economy will not be affected. [...]

]]> By: Bill Lyons http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-1335 Bill Lyons Mon, 06 Aug 2007 18:29:04 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-1335 Its getting ugly out there... Its getting ugly out there…

]]> By: Mary Ann http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-1331 Mary Ann Mon, 06 Aug 2007 16:30:22 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-1331 Right on MM. If the lender creates the program the rep will sell it. The broker will place a borrower into it. 20% down or more equals good payment history. 25% or more equals the best loan on the planet. No subordinate financing. I think the My Community loans prior to 2006 will not be a problem. They were "targeting" particular people and those people are educated budgeting type people. They did not "take" what the broker offered. They "told" the broker what they were willing to pay monthly and adjusted their sales price from there. Those are the loans that will continue to bond out/sell. I train all my people to DONT ASK DONT TELL. Make sure you take the application from credit report, to asset, then to employment/income. DO NOT ASK because if you ask, and end up in a NO DOC or NO RATIO, you are going down with them. When you are done, have the borrower sign a form that lets them know how much someone has to net each month to afford this purchase. Keep it in the file. Now I am exhausted! Right on MM. If the lender creates the program the rep will sell it. The broker will place a borrower into it. 20% down or more equals good payment history. 25% or more equals the best loan on the planet. No subordinate financing. I think the My Community loans prior to 2006 will not be a problem. They were “targeting” particular people and those people are educated budgeting type people. They did not “take” what the broker offered. They “told” the broker what they were willing to pay monthly and adjusted their sales price from there. Those are the loans that will continue to bond out/sell. I train all my people to DONT ASK DONT TELL. Make sure you take the application from credit report, to asset, then to employment/income. DO NOT ASK because if you ask, and end up in a NO DOC or NO RATIO, you are going down with them. When you are done, have the borrower sign a form that lets them know how much someone has to net each month to afford this purchase. Keep it in the file. Now I am exhausted!

]]> By: Brian Brady http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-962 Brian Brady Sun, 05 Aug 2007 22:26:55 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-962 Jim Cramer: "Bill Poole needs to keep his mouth shut; he's not inspiring confidence" Fast Forward 3 minutes after a temper tantrum begging Bernanke for a rate cut: Jim Cramer: "This IS Armageddon. I know too many people. 7 million people will lose their homes" Brian Brady: THAT is why Jim Cramer is not Fed Chairman Jim, you just can't prevent stupidity, no matter how hard you try. Scoreboard: 7 million lost homes would be a 7% foreclosure rate; terrible but tolerable. Jim Cramer: “Bill Poole needs to keep his mouth shut; he’s not inspiring confidence”

Fast Forward 3 minutes after a temper tantrum begging Bernanke for a rate cut:

Jim Cramer: “This IS Armageddon. I know too many people. 7 million people will lose their homes”

Brian Brady: THAT is why Jim Cramer is not Fed Chairman

Jim, you just can’t prevent stupidity, no matter how hard you try. Scoreboard: 7 million lost homes would be a 7% foreclosure rate; terrible but tolerable.

]]> By: Morgan Brown http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-939 Morgan Brown Sun, 05 Aug 2007 06:12:54 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-939 Jeff - Thanks for the comment. You are right. When Moody's announced the new evaluation method I posted that they had killed Alt-A. It took a few days for it to make its way through to the secondary market. I agree with you a .25% cut to the rate wouldn't do a thing. I think Cramer is just asking anyone who can do anything to do something. It's desperate and there really isn't anything anyone (the fed or otherwise) can do about it. I hope the government stays on the sidelines too - but history doesn't look promising in that regard. Jeff – Thanks for the comment. You are right. When Moody’s announced the new evaluation method I posted that they had killed Alt-A. It took a few days for it to make its way through to the secondary market.

I agree with you a .25% cut to the rate wouldn’t do a thing. I think Cramer is just asking anyone who can do anything to do something. It’s desperate and there really isn’t anything anyone (the fed or otherwise) can do about it.

I hope the government stays on the sidelines too – but history doesn’t look promising in that regard.

]]> By: Morgan Brown http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-935 Morgan Brown Sun, 05 Aug 2007 00:27:58 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-935 Dan - Any comment on Doug Norland's comments about the GSEs? http://www.safehaven.com/showarticle.cfm?id=8108 "And let's not forget the GSE "backstop bid." The GSE's ballooned their balance sheets $150bn to absorb speculative de-leveraging during the 1994 bond market rout - about double 1993's at the time record asset expansion. GSE balance sheets (largely holdings of mortgages and MBS) ballooned $305bn during tumultuous 1998, $317bn during 1999, $238bn in 2000, and $344bn during liquidity challenged 2002. Agency balance sheets grew $37bn last year. The GSE's are definitely in no position these days to aggressively create marketplace liquidity through the expansion of their balance sheets (issue debt to expand holdings of MBS). Wall Street must all of the sudden feel short of friends. Appearing this evening with Larry Kudlow, Larry Lindsey called upon Fannie and Freddie to loosen lending standards to help ameliorate the rapidly accelerating Mortgage Credit Crunch. I was immediately reminded of how Washington nurtured the $200bn (or so) S&L bailout from what should have been resolved years earlier at a fraction of the cost to taxpayers. The GSE tab is today running out of control. Keep in mind that Fannie and Freddie already have combined "Books of Business" (MBS holdings and guarantees) of almost $4.0 TN supported (in the best case) by stockholders' equity in the neighborhood of $60bn (current financial statements not available!). The thinly-capitalized Federal Home Loan Bank System has another $1.0 TN of assets. Before all is said and done, taxpayer GSE exposure will likely reach the trillions - to add to other untenable ballooning federal contingent liabilities." I'm still digesting but I'll have a post later on it. Dan – Any comment on Doug Norland’s comments about the GSEs?

http://www.safehaven.com/showarticle.cfm?id=8108

“And let’s not forget the GSE “backstop bid.” The GSE’s ballooned their balance sheets $150bn to absorb speculative de-leveraging during the 1994 bond market rout – about double 1993’s at the time record asset expansion. GSE balance sheets (largely holdings of mortgages and MBS) ballooned $305bn during tumultuous 1998, $317bn during 1999, $238bn in 2000, and $344bn during liquidity challenged 2002. Agency balance sheets grew $37bn last year. The GSE’s are definitely in no position these days to aggressively create marketplace liquidity through the expansion of their balance sheets (issue debt to expand holdings of MBS). Wall Street must all of the sudden feel short of friends.

Appearing this evening with Larry Kudlow, Larry Lindsey called upon Fannie and Freddie to loosen lending standards to help ameliorate the rapidly accelerating Mortgage Credit Crunch. I was immediately reminded of how Washington nurtured the $200bn (or so) S&L bailout from what should have been resolved years earlier at a fraction of the cost to taxpayers. The GSE tab is today running out of control. Keep in mind that Fannie and Freddie already have combined “Books of Business” (MBS holdings and guarantees) of almost $4.0 TN supported (in the best case) by stockholders’ equity in the neighborhood of $60bn (current financial statements not available!). The thinly-capitalized Federal Home Loan Bank System has another $1.0 TN of assets. Before all is said and done, taxpayer GSE exposure will likely reach the trillions – to add to other untenable ballooning federal contingent liabilities.”

I’m still digesting but I’ll have a post later on it.

]]> By: Morgan Brown http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-933 Morgan Brown Sat, 04 Aug 2007 23:26:44 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-933 Phil/Vicki - I agree. No rate cut, negative rxn for sure ... let's see who we lose this week... Phil/Vicki – I agree. No rate cut, negative rxn for sure … let’s see who we lose this week…

]]> By: Morgan Brown http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/comment-page-1/#comment-932 Morgan Brown Sat, 04 Aug 2007 23:25:20 +0000 http://blownmortgage.com/2007/08/03/a-quick-recap-the-day-the-credit-died/#comment-932 Schahrzad - That is a great insight. I imagine that the capital markets will continue to see value in conforming mortgages - the problem I have with it is that as I said above nearly 40% of the mortgage market is currently outside those guidelines. While money is not available right now in those markets I believe that it will come back slowly, just at a much higher premium. Global liquidity remains, money needs to be invested. Investors may be scared of our housing right now, but with a high enough yield I imagine they'll return (albeit in much smaller numbers). Schahrzad – That is a great insight. I imagine that the capital markets will continue to see value in conforming mortgages – the problem I have with it is that as I said above nearly 40% of the mortgage market is currently outside those guidelines. While money is not available right now in those markets I believe that it will come back slowly, just at a much higher premium.

Global liquidity remains, money needs to be invested. Investors may be scared of our housing right now, but with a high enough yield I imagine they’ll return (albeit in much smaller numbers).

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