Blowing the Lid Off the Mortgage Industry
From the monthly archives:
If you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting!Runaway gas and food prices are the most visible signs of inflation storming back in to the American economy. The specter of high inflation will certainly limit the Fed’s ability to stave of recession with further rate cuts. [...]
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Adjustable Rate Mortgage-holders rejoice, LIBOR not being redefined … for now. Housing Wire covered earlier how changes to the LIBOR could radically impact home mortgage payments for folks with loans whose interest rates are tied to the index. You can all breathe a sigh of relief for the meantime, until the BBA gets around to [...]
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Market Watch has the inevitable story of inflation now completely wiping out any gains that consumer’s have seen in income. Inevitable, why? Because the interest rate cuts and massive influx of capital in to the system have set inflation loose. Gas prices are increasing geometrically, food prices are up, and there was even a heart-rending [...]
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Struggling home builder Standard Pacific got a big-time private equity bailout today by investors who will gobble up a bunch of equity in exchange for a nice cash infusion. They’ve also been able to restructure about $13 billion worth of debt through MaitlinPatterson.
We’ve seen this with the banks taking on huge amounts of cash from [...]
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Bloomberg reports that Countrywide’s President Dave Sambol won’t stay after the merger goes through. Some head has to roll for the disastrous lending practices that have built up at Countrywide over the years. I guess that’s what you get for “protecting the house.”
Bloomberg on Sambol’s exit at Countrywide:
Countrywide Financial Corp. President David Sambol, who became [...]
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Countrywide shareholders are sure to approve the Bank of America takeover at a special meeting on June 25th. The real question is whether Bank of America’s due diligence and Countrywide’s deteriorating loan portfoliio will be enough to scare away the would-be suitor.
From Market Watch on Countrywide’s special meeting:
Countrywide Financial said late Wednesday that it will hold [...]
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Ambac, one of the top bond insurers in the country continued to hemorrhage cash on bad mortgage-related bets. Ambac reported a loss of $228 million in CDOs and its investment portfolio in April. Many of the CDOs include subprime mortgage debt.
From the Associated Press on Ambac’s subprime mortgage backed CDO losses for April:
Bond [...]
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AIG, who has taken a beating on mortgage-related insurance bets may need to raise an additional $10 billion in cash on top of the recently-raised $20 billion in order to keep its rating.
From Bloomberg on AIG’s cash needs:
AIG may seek $5 billion to $10 billion rather than let its credit ratings be cut again and [...]
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New home sales rose for the first time in sixth months but the sales gain was merely a rebound from the 11% loss reported in March – the lowest level in sales in nearly 20 years. Last month’s sales numbers were off 42% from the same time period in 2007 the biggest drop since 1981.
From [...]
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Bloomberg reports that consumer confidence is sinking with home values, reaching lows not seen since 1992. From the article on the lack of consumer confidence:
Confidence among American consumers fell in May to the lowest level since 1992 as the two-year housing slump showed no sign of bottoming.
The Conference Board’s confidence index declined more than forecast [...]
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