The real estate agent population is being thinned now too. The difference is they’re not being laid off, they’re just looking for the regular paycheck you’ve been receiving all along.

The consequences for the lending industries lax underwriting will be paid. In a free enterprise, capitalistic economy, it’s inevitable.

You will find a job soon, as there is always work for people like yourself. My prayers are with your family.

I think we’ve seen the limit of what will hapen with regard to tightening restrictions. I think that, over time, we’ll start to see some of the “make-sense” products come back, but the majority of the risky products won’t be seen again for some time.

I don’t think we’ll see 20% down become the new standard. I think zero down is gone, and won’t come back for at least several years. I think that borrowers with high scores will still be able to do 5% down, but it won’t be in conjunction with any other layered risk factors. I don’t think this is bad. It’s about time people came to the realization that, if you want to buy a house, you have to come to the table with SOMETHING. At the very least, the cost to sell the property (6% realtor commission) should be covered by equity.

As for how much the market will drop, I think early estimates in the 30-40% range are a bit high. These are based off of auction sales in the grossly oversold Southern California market. Nationwide, a drop of 10-15% is more realistic, with the understanding that 5-10% of that drop has probably already occured, but just isn’t yet reflected in the statistics (which report only year-over-year numbers). Certainly some markets will be more affected than others, and some markets will enjoy a surge in value as displaced homeowners move out of areas like California and the Northeast. Overall, it’ll be a low pressure system, not a killer hurricane.

RE: Moody’s downgrade

I think it makes sense. It’s a modest downgrade and the language that accompanied it was far less critical than what you’re seeing with others like Merrill’s downgrade of Countrywide, that basically said, “we think they’re going to go bankrupt”.

I think NCM’s strategy in this market is a sound one. They’re certainly erring on the conservative side. While that may mean the loss of some origination business in the short term the idea is to limit exposure to loss down the road. They want to be a going concern, and the goal is to emerge near the top of the heap when it’s all said and done.

I take issue with the accusation that NCM’s operations are inept. Any organization has sub-par people in it, and NCM is no different. But if your impression is bases solely on what is happening on the wholesale side, you’re only seeing a part of the picture. NCM is stepping up and standing behind retail lending in a big way. It makes sense when you consider how rife with fraud the broker world has been. If you want to ensure that you are writing only quality loans, you need to control the whole process from beginning to end.

I wouldn’t be surprised if, in the next few months, you saw NCM lop off the wholesale division all together. This will generate negative press, but will actually be a positive strategic move to improve the quality of their originations, and serve to actually strengthen the company as a whole.