Blown Mortgage

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I’ve talked before about how 2011 might not even be the end.  And with Bank Of America publicly predicting that increased awareness will lead to a further decline in prices, things should be interesting–especially the question: do we pray for ignorance?

I’ll start by saying that both Countrywide the brand, and Countrywide the business will close the year in existence.  I’m not saying that BOA won’t buy them, but I’ll say that they’ll continue to exist.   However, National City will be in grave danger, and it’s death will be imminent by the end of the year.   I’d guess that US BANK is in some trouble too, because they seem to have an appetite for risk that nobody currently enjoys.

The Industry–as we know it–will survive, but Brokers will no longer have more product availability than banks–they will generally be restricted to Fannie/Freddie stuff and commercial stuff.

The most troubling thing that I can see going on right now is seeing the "used car" brokers "Get into the Game" with people like Interbay.  Having main street businesses on the same lunatic 2/28 and 1/29 cycles that other folks are on is unsustainable, restrictive, and it will lead to Interbay holding a lot of commercial real estate, and another year of German cars for brokers.  This will come to a head in 2012, and the heretofore unregulated commercial world will come under the radar of Mr. Frank, causing more new problems.

Now, as far as resolutions go: Fannie and Freddie must stop adding bad loans to the pile, and must have some sort of First time Home Buyer financial commitment that exceeds a security deposit and first months rent, or else the problem will get worse.  With FHA still originating insane risks, it’s probably going to get bad anyway.

I’ll probably resume posting in a week or so.  Have been pretty much media free for 2 weeks.  I highly, highly recommend tuning out for a week or more.  You can do it with some easy assumptions:  Iraq sucks, we haven’t caught Osama,  the mortgage crisis is getting worse, but Lawrence Yun is lying about it.  Congress is trying to do something, but will get it wrong.  That’s your news for the next 6 months, more or less.

Chris Johnson runs the Ten Day Team, which  bails out Realtors that bit off on a crappy preapproval issued by a worthless mortgage broker.

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