Silly analysts. Silly Bernanke. Silly Mozilo. Silly Greenspan. Silly Lereah.
It's not just subprime, and they know it. Here comes The Great Alt-A Meltdown (needs a sexier name, eh?)
Wall Street Journal: Mortgage Defaults Start to Spread
The mortgage market has been roiled by a sharp increase in bad loans made to borrowers with weak credit. Now there are signs that the pain is spreading upward.
At issue are mortgages made to people who fall in the gray area between "prime" (borrowers considered the best credit risks) and "subprime" (borrowers considered the greatest credit risks).
A record $400 billion of these midlevel loans -- which are known in the industry as "Alt-A" mortgages -- were originated last year, up from $85 billion in 2003, according to Inside Mortgage Finance, a trade publication. Alt-A loans accounted for roughly 16% of mortgage originations last year and subprime loans an additional 24%.
The catch-all Alt-A category includes many of the innovative products that helped fuel the housing boom, such as mortgages that carry little, if any, documentation of income or assets, and so-called option adjustable-rate mortgages, which give borrowers multiple payment choices but can lead to a rising loan balance. Loans taken by investors buying homes they don't plan to occupy themselves can also fall into the Alt-A category.
Data from UBS AG show that the default rate for Alt-A mortgages has doubled in the past 14 months. "The credit deterioration has been almost parallel to what's been happening in the subprime market," says UBS mortgage analyst David Liu.
Investor concerns about Alt-A loans are rising, according to Walter N. Schmidt, a mortgage investment strategist at FTN Financial Capital Markets in Chicago. A report from mortgage analysts at Barclays Capital in New York this week pointed to fraud as one reason for early defaults on Alt-A loans.
The mortgage industry is battling a rash of cases in which borrowers, loan officers and appraisers collude in providing false information to induce lenders to advance more money than homes are worth.
March 08, 2007
FLASH: Mortgage Defaults Spread Beyond Sub-Prime Loans
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40 comments:
I luv it!!! It just keeps getting better. I can't wait to read whats next ,and next after that, and next after that.....
Alt-A apocalypse?
Alt-A armageddon?
BaaaaaaaaaaaaaaaaaaaaaaaaD!
How many trillions of bad loans are there out there?
Yo! Suzie! Now look girl, youz got us all messed up in this dump. Now youz gonna go and push that white ass or I'z gonna push it for ya. Who's my bitch? Now be a good girl and go do what your daddy say.
I know a bank loan officer who says that the meltdown is well known among lending institutions. While the Alt-A has been off the radar it now looms large and the consensus is that the S&L crisis will be eclipsed by the size of this debacle.
NikKei up 2%
I luv it
no.. I think it's "Alt-A Apocollapse"
Of course its going to spread ...
Your identica neighbor's house is sub prime ... its got defaulting owner resident, and a mortgage company that has caved in, and it is in the process of being tossed from one to the other as they decide what to do. That is what we call fake estate.
Now You are super super prime ... you are made of gold, and your credit score is 999, you house is the Real estate. So ... your house is worth ... exactly as much as your neighbors ... Like I have said before ... fake estate will destroy real estate ... because they are indistinguishable from one another.
Cool.
Cow_tipping.
It's already priced into the market! The risks are diluted away! Buy buy buy!
Prime is next. Because prime in 2006 would have been junk in 1986. Nobody buys houses with 20% down and no other major debts anymore....who the hell can save 20% for a house anymore? For a median home of $200k? That means $40k! Who the hell walks in a plops down $40k in cash anymore? (Unless they got a cash advance off their credit card!) And if the powers that be don't recognize that already, then we're in for a world of hurt.
finally, an honest assesment:
Speaking at an investor conference in New York, D.R. Horton CEO Donald J. Tomnitz said he expects to get more pricing power in 2008 but not before home prices continue their decline this year as builders try to sell the glut of houses currently on the market.
http://biz.yahoo.com/ap/070307/dr_horton_outlook.html?.v=3
From now on the law needs to be 20% down min, 3x income max on all mortgages. 20% down min, 5 year loan max on all cars would be good as well. The cycle of debt must be ended.
Okay, so Subprime and AltA combined = 40% of last year's mortgage originations. I wonder how soon we'll stop hearing that this mess is confined to a small, isolated segment of the market.
If standards do indeed tighten on 40% of the buying pool, watch out below. And how many Prime borrowers are just itching to get into this market?? My guess is, not a lot.
This seems like a good reason for the market to rally.
Alt-A = ctrl/alt/delete
jj,
I like that,
Alt-ARM-ageddon
or
Alt-A-ARMageddon
The Great Mexi-Melt.....yum!
Democrats don't care much who votes in national elections. Illegals, convicts..anyone can vote and don't you dare try to check ID.
Now they have taken that same thinking to votes on unionization. They passed a bill that would make secret ballots a thing of the past. If they are so sure workers really want unionization, why are they afraid of a secret ballot? Simple answer of course. So that union goons can intimidate those who dare go against their directive.
http://newsbyus.com/more.php?id=
7442_0_1_0_M
Any of you "I love American workers and don't shop at Walmart" types see anything wrong with this?
DOW UP!!
NASDAQ UP!!
CFC UP!!
MER UP!!
DHI UP!!
TOL UP!!
GOLD...DOWN!!
SILVER...DOWN!!
Is the panic starting yet HPers?
Time for CLT-ALT-DELETE more like it.
Alt-A Atrocity?
we better start thinking of a good prime name also.
Maybe something Shakespearian..."The Plummet of the Prime"
Palatine Il
02-2006 sold 67 mp $247,000.00
01-2006 sold 113 mp $239,000.00
02-2007 sold 34 mp $224,000.00
01-2007 sold 50 mp $234,000.00
Listed on Zipreality.com 786 properies
That is 12 months supply !
What they are thinking?
Pit
Alt-A = Ctrl+Shift+Del
haha get it?? get it????? compooter jokes!
How about this - the lenders send their own appraisers for $300? Nah, that would be too expensive on an $800K loan.
Hey, I think Casey might have finally got it... or forgot to pay his bill again.
IM A RENTING
Nice to see the slimeballs ( I-Bankers, Hedgees, nar, realtors, mtg brokers, builders, appraisors) getting it up the @$$ with these scummy loans.
The housing market-slumbloan market in meltdown.
YEAH!
That's because many people with otherwise good credit borrowed more money than they should have to purchase their houses. As my brother pointed out; "Anyone making $30K a year should NOT be buying a $400K house".
Rule of thumb: A house should be only 2-3 times your income and no more than 25% of your monthly bills. Anything else spells trouble.
"...providing false information to induce lenders to advance more money than homes are worth."
False information is a serious problem for all industries.
>> From now on the law needs to be 20% down min, 3x income max on all mortgages. 20% down min, 5 year loan max on all cars would be good as well. The cycle of debt must be ended.
Q: But, but, but - how will people be able to afford homes and cars?
A: They won't. Fuck 'em.
>> No one IN THE WORLD was smart enough to see this coming.
I think most teenagers saw it coming. Afterall, don't they know everything?
year-to-date (as of yesterday):
nasdaq down -2%
dow down -2%
DHI down -7%
TOL down -9%
MER down -12%
CFC down -13%
...and just for fun
NEW down -84% (not counting the -25% savaging it had today)...
Anon said:
"Democrats don't care much who votes in national elections. Illegals, convicts..anyone can vote and don't you dare try to check ID."
Doesn't the democrat saying go "Vote early and often"?
HAHAHA, I have been lowballing (actually using time and tested true market values given inflation, etc. to arrive at a fair price) a local RE whore. She NEVER EVER even tells the clients the offers I am making, she says her clients may not like it, and expect more. Fucking cunt!! Anyway, she tells me that appearently I do not understand the market and that she would like me to come in. This is what I reply to her:
"Oh, I think I understand the market quite well. In fact I have a friend who is an RE agent, in Phoenix who has told me the sad conditions of that city and the plethora of unsold vacant homes. I will just keep checking back periodically, but I you can rest assured that by 4q 2007 things won't be rosy and your clients will (if not already) be desperate to sell. 'Till then. Look forward to when cash is king in a sane non-bubblicious market - as I'm sure you are quite aware of the sub prime meltdown in housing and its overall future banking and market affects.
Have a nice day."
When you have a fucking home that was bought for 120K in 2001 and they want 269K today, there is something VERY wrong. So to the RE bitch - don't tell me that I don't understand the bullshit sandwich you keep feeding people. I am almost tempted to write the different people who are selling their homes, based of recorder info., and explain to them that their RE whore is not giving them my offers. Then tell them we can do business togther without the whore and save everyone 6%. Then again if they refied the shit out of their stucko-shit-box, they may not have any choice but to sell for 269K. Funny thing is that the listing for the two homes I was looking at were on the market for months. Gee, RE bitch, you think they will ever sell?
sinis,
You sound like a very bitter and angry person. Your tone hints at a very unhealthy anti-woman streak too.
You do know that you can buy a home without a real estate agent right? If she's not telling the sellers of your offers here's a thought...go know on their door and say I want to buy your house for $XYZ. Why don't you do that tough guy and see how it works out for you? Wait unless you were stupid enough to sign an exclusivity contract with a buyer's agent...were you? Please say it aint so Joe, because if you did you may well be the stupidest person alive.
You are of course full of shit though. You aren't lowballing anyone since you couldn't qualify for a loan on a Big Mac meal let alone a $269K home on your $6.25 an hour job.
Sinis - you are an embarrassment to the HP community.
You regurgitate without thinking. You pose as a virtual tough guy.
Pathetic
It's illegal for an agent to not inform a property owner of ANY offers made on their property. If you did indeed make an offer on the property and you know for sure it wasn't presented to the owner, you can contact the state realtor's association and report them.
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