July 25, 2007

America, you got taken by conmen, hucksters, get-rich-quick schisters, flim-flam dealers and human scum

In other words, realtors, mortgage brokers, lenders and builders on commission, in addition to a corrupt NAR, an incompetent MSM, and a criminally negligent Fed, Congress and President.

And now you know.

Good luck out there. I hope you don't let it happen again (for awhile)


Profits tumbled yesterday for the nation's largest home mortgage firm - Countrywide Financial - even as its chief Angelo Mozilo was quietly cashing out a $118.2 million options windfall ahead of its new troubles.

The company reported a 33 percent drop in profits, and expects deep losses across the industry in the wake of housing's thundering crash that's sending cracks this summer throughout the financial services landscape.


Agent #777 said...


Anonymous said...

The screw has turned

Anonymous said...

I made a $200K tax free profit owning a home for a little less than 3 years. I had a 3 year ARM with Countrywide while doing so at 4.15%. I sold before the adjustment and ended up paying $120 more a month than my rent was before moving, and that was without taking into account the tax deduction.

If that's being taken advantage of, bring some more of that shit on.

Sorry Al-Qwaffer, not everyone fits into your little FB stereotype.

Anonymous said...

Mozilo is probabay saying:

THANKS SUCKERS !!!!!!!!!!!!!!!

Whine, whine all you want. Whinning is for LOSERS, and Im the big WINNER. If you chumps made as much money as me, WHO CARES WHAT PEOPLE THINK OR SAY ABOUT YA!

Ah, ONLY in America.!

keith said...

CNBC's Diana Olick mentions HousingPANIC:

I’m just wondering who’s doing all the harassing? We in the mainstream real estate media are pretty used to all the different numbers. We know Case Shiller does big metro markets, and OFHEO does only conventional loans without the higher-priced properties, so the numbers will be different.

But trashing housing nowadays has become something of a sport. The proliferation of housing blogs with names like housingdoom.com, housingbubble.com and housingpanic.com, is truly unreal. The housing downturn is in entertainment, even making its way into an episode of the "Sopranos" last season, when 'Carm' was worried about selling her spec home.

I guess it’s good that the NAR is getting more inquiries; at least that means people are starting to question the facts more and more. But it also indicates that nerves are running high. When numbers are great, nobody questions them; when they’re not, well, you get the call.


keith said...

"made a $200K tax free profit owning a home for a little less than 3 years|}"

Congrats to anyone who made money getting in and getting out

You're in the 1%

HP doesn't have a profile. Everyone has a different story

The one constant? The short term housing bubble and crash

Anonymous said...

Ok let me get this straight.

My original mortgage lender took my mortgage loan receivable and sold it to a brokerage (say Bear Stearns).

Bear then took my mortgage loan receivable and went to another lender and used my mortgage receivable as collateral for a loan to Bear.

Bear then took that borrowed money and invested it in a hedge fund which bought more mortgage loan receivables?

So even though I borrowed (say $400,000) and used the funds to buy my home, my original lender got his money back plus some profit by selling to Bear (say $450,000).

Bear then got there money back ($450,000) by borrowing from another lender (I assume $500,000+)and then invested that money in a hedge fund which would buy more mortgage loan receivables.

So, the marked to market must mean that my mortgage loan receivable, which was sold and ultimately used as collateral for another loan, had to be valued and borrowed against as if I would pay the entire loan including interest to maturity?

So if I pay the loan off early or can't pay-off the loan and funds were borrowed on full repayment, someone will have to take a loss?

Does my lender have any responsibility for the loss since they originally made the loan?

WuHu said...

Just business as usual......

Anonymous said...

You just described Scottsdale Arizona to a T

Anonymous said...


Why is he sweating?

If I had a few hundred million under each orange-like greasy armpit, I wouldn't be sweating.

Anonymous said...

I'm not in the 1%. Lots of people made lots of money this decade in r/e. I have a friend who bought a $300K home in 2002. At the time I thought he was nuts spending what was then a fortune on a house.

He bought 3 more homes within the next year, sold all of them for significantly more less than a year later, could not have timed the market better if he tried. He then sold his original $300K home for $750K in 2005, about when I sold my $180K home for $390K.

There must be hundreds of thousands of people like that out there who made a killing.

The Thinker said...

Obviously there were many people who profited from the upside of the housing bubble. When you buy low and sell high you make money.

Remember, if you can pass the hot potato before the music stops, you win!

Other people will not be so lucky, they may be tempted to believe the lies told by the REIC, namely, that the music continues in perpetuity. These people will be screwed!

This blog was set up to help inform people that the music really does stop, renting ISN'T always throwing your money away, and it really isn't gonna be any different this time.

In short, this blog provides a valuable public service to protect your average would-be home buyer from making the biggest financial blunder of his life.

If you made money flipping houses in 2002 then fine, that has nothing to do with our message.

Anonymous said...

No, your message is renting is always better than renting

Your message is living like a pauper is admirable.

Your message is socialism/communism is wonderful and the idea of someone daring to make money like say oh I dunno by lending money for mortgages is criminal behavior.

Your message is one of pessimism, doom and gloom. You hope for the worst which is silly since you will be hurt as much as me if and when this great economic crash arrives. Don't kid yourself, thinking otherwise.

That is a far cry from an alternative point of view on housing.

Anonymous said...

Anon said:
There must be hundreds of thousands of people like that out there who made a killing.

I'm sure that's true. Unfortunately, most of these people took their winnings and put it back into the Real Estate Market increasing their leverage every step of the way.

Now the music stops and most of these people are screwed!

Mozillo said 25% of their subprime mortgages are delinquent right now! Holy F@#K!


Mark in San Diego said...

Anon - "Hundreds of Thousands of people who made a killing"

Yes, I agree - as a long time blogger here - for 1 1/2 years, I too made a "killing" bought condos in 1987, 1991,1992 in Walnut Creek, CA, and sold them off in 2003,2004,2006 (early 2006). . .so I made a killing and retired at 55. The question is - How many people cashed-out like me and you, and how many put the money back into real estate because they thought the party would go on forever. . .I agree with Keith - probably only 1 or 2% of 300Million American population did, but hey - that's 300,000 to 400,000 people. . .I think many moe millions either didn't cash out, or bought more real estate.

westwest888 said...

Ah, remember October 2006? Let's look:

Mozilo candidly told investors Countrywide would be "treading water" in 2007, but indicated he thought the worst was over for the housing bust.

Sounds silly now! But we knew all along...

KaliExPat said...

The truth is a few sheepsters made a quick buck flipping houses and are proud of their ill-gotten gains.

Yes, "ill-gotten" gains.

Why is that? Because they fed the mania that shouldn't have happened in the first place, a bubble which was created by a corrupt totally-gamed financial system that will cause GREAT pain for the USA for years to come.

I could have profited by flipping houses with other people's money (having seen the trend begin in 2002 and called the top in the summer of 2005), but I was too busy making money from my small-business...in fact, from 2002 through 2006 I made more than a million dollars, which I Paid taxes on, unlike the flippers following the bait laid for them by the District of Criminals.

I hope these moronic leeches live long enough to see what putting the last nail in the USA's economic coffin will look like for future generations.

People that are sane say NO! to bubbles...

Anonymous said...

"Your message is living like a pauper is admirable."

Well, flipping houses is not an admirable profession and I don't care how much money you make.

That's the problem with this country, a lot of people want to make money doing nothing.

Anonymous said...

1 or 2% of people made a killing. And 1 or 2% of people will foreclose. The current foreclosure rate nationally is less than 1% right now.

The 95% in between will go about their business as usual not giving a fuck what anyone says, Keith and Mozillo included.

ALAN DEE said...

THIS IS JUST THE START. We will soon have a peak inside. New home sales are going to be a major player in dropping the price out of the sky, older homes beware. The foreclosure market in california has become a second market all to its own, funny thing is the only buyer of foreclosures right now are banks. I have just started to see these bank owned homes prices dropping.
The Anonymous Appraiser

KaliExPat said...

Q: How did sheepsters participation in the RE mania come about and for what reasons?

"A: Greenspan slashed rates to 1% and made that recommendation to bail out his banking buddies that were in deep cereal trouble over bad loans to emerging markets, dotcom bubble blowups, and other such nonsense. The effect was that banks were once again bailed out of stupid lending decisions. But Greenspan had to know full well what this would eventually do to consumers or he was a senile idiot. Take your pick. Either way history will not be kind to Greenspan."

Anonymous said...

aahhh yes the communists speak once again. God forbid anyone should make money. well f**k all of you. I made money and I'm not going to apologize for it. As for future generations f**k them too. I'll worry about me, they can worry about themselves.

Bitter Renter said...

Bubbles always make a few rich and hurt many more. That's the whole idea behind American Capitalism.

It's evil. Worse than communism or socialism. You can see how it rots the soul of a culture by the amount of social pathologies we exhibit in this poor excuse for a country.

guy n. cognito said...

wow, a real enabler has joined us today! thanks for bragging about f'ing my country's future, you stay classy. so where are you from? your annoying rant reminds me of hill people, must be a beltway baby.

Anonymous said...

If Mozilla and the rest of the REIC hucksters can stay out of prison, they gamed the system by robbing all decent Americans. Some nutjobs will be happy about it. Sane people will not be happy.

realtrolls nervous said...

My gbet is that most people who made money in RE plowed it right back in and lost most of it back if not more. This is the same thing that happened with the dotcom ponzi scheme. Greed always get the best of people. You will always hear people bragging about their successful speculation, but how many will go around telling people about how much money they lost on RE or stocks?

Anonymous said...

Who else profitted off CFC puts and shorts? How sweet it is.

Paul E. Math said...

Profits sank 33% for Countrywide and this guy gets $110 million. What sane shareholder would think that's okay? Is there something more going on here? Are shareholder rights really just an illusion, technically they exist but in actual practice noone is really able to hold their boards accountable? Is that why executive pay has skyrocketed the last decade?

I'm all for capitalism, please don't label me a commie. Perhaps we need to examine why it is that shareholders don't rebel against such abuse.

Anonymous said...

.S. Probes Mortgage Prices
Charged to Minority Borrowers
July 26, 2007

WASHINGTON -- The Justice Department told Congress it is investigating several lenders over suspicions they charged minority borrowers higher mortgage rates than comparable white borrowers.

The Federal Reserve has reported that 2005 loan-price data collected under the Home Mortgage Disclosure Act found 55% of African-American borrowers and 46% of Hispanic borrowers received costly mortgages, compared with just 17% for whites. The data didn't take into account, however, whether borrowers who received more expensive loans also had worse credit histories.

Anonymous said...

AAPL and AMZN stock are flying through the roof. That means home prices will be heading up too.

People don't buy books or phones in a recession. Dopes

paul revere said...

Good news - el Presidente Jorge Bush finally agreed to pull the troops out!!!


The number of National Guard troops along the Arizona-Mexico border will be trimmed in half by the end of next month.
As the presidentially mandated Operation Jumpstart mission begins its second year in support of the U.S. Border Patrol, the number of troops is being reduced as planned. It will be trimmed from 6,000 to 3,000 nationally and from 2,400 to 1,200 in Arizona, said National Guard Capt. Kristine Munn. The pullout began July 1 and is scheduled to be completed by Sept. 1.

mrmx said...

"Your message is living like a pauper is admirable."

have you heard of "house poor?"

"That is a far cry from an alternative point of view on housing."

are you trying to blow smoke up keith's @$$.

Anonymous said...

There was something weird that Mozillo said during the conference call that I haven't heard any comments about. First you hear from the realtors that this is a great time to buy being interest rates are at historical lows. (irregardless that prices are going to continue to decline)However Mozillo says that because the fed continued to raise rates
(1% to 5.25%)this has caused the problem that we are in now. Being the higher resets are based on the prime, libor or other market rate ultimately based on the fed funds rate, he said that the fed will be forced to lower prices. To not only help CFC and the us economy at all. So my question is are the rates aT THE LOWEST RATES in the near future or will they be cut along with house prices.

Anonymous said...

I agree with Keith, there's no HP profile. Many different stories here. In my case, I paid $226K for a 4/2/3 with 1650SF in late 2002 out here in the vast wasteland of the I.E. (AKA "Fontucky" - Fontana, California). Sold it in mid-2006 for $480K, cleared $452K after commissions, etc.

I cleared almost exactly double what I paid for it in a bit over three years (I didn't actually close on it when purchasing until Mar '03). 100% return? Not bad, I'd say.

I paid cash for it that I'd saved up from my job years before, dropped the entire amount and lived w/o mortgage during that time. So I not only doubled my money (tax-free), I got to live in the place during that time!

Now I'm just waiting out the correction by staying with friends and family while the cash gives me an income of nearly $2K/Mo. Having fun, but I will buy again when prices make sense, not before. I've never lived beyond my means, and I always pay cash. I don't like paying interest to a bank, let them pay me! No one will get rich being a debt slave.

Although I have just over $1M in assets in the bank & 401K, I still shop clearance sales and go to the 99-only stores. I think I'm not alone with this train of thought, the more money you get, the less you want to spend it (haphazardly, that is).

I went through some tough times back in the early 80's when the economy was near a depression (felt like it, anyway, since there were few jobs out there). It taught me a lesson that you can't take anything for granted. Jobs come and go, friends come and go, you have to prepare for a rainy day when it's sunny.

I saw more than one R.E. correction here in CA in the past 30 years. This one will be a biggie once it gets started rolling well.

I can remember at the low point in the 1990's, prices were down and there were no buyers out there, and just the opposite when prices were hot. Multiple offers, shady deals... it never ends. R.E. is cyclical, always has been, always will be. And no, it's not "different this time".

Sometimes it's hard to wait it out, but I feel like everyone that does will be very glad they did. Hang in there, all you bitter renters and our day will come!

Bakersfield Bubble said...

David Crisp Sister in Law EXPOSED:

Megan Balod, 29, is Crisp’s sister-in-law. A year ago, she went on a shopping spree in southwest Bakersfield and bought a house on Walderi Street for $380,000, as well as a house for $920,000 on Covent Garden Court, and a home on Vista Bonita for $549,000.

Then, in one week last May, she bought two houses, one for $795,000 and another for $475,000.

In all, records show she borrowed more than $3 million that spring.

That’s more than $15,000 a month in interest payments for Balod, who answers the phones at her father’s CPA business.

She’s the only borrower listed on the loans; even her husband has been taken off the deeds.

Balod’s sister is married to Crisp, so one might think she’d get a good deal when she goes house shopping.


Anonymous said...

I work at CHL, and would sometimes look at this site during my (very long and tedious) work day, for a dose of reality in the mortgage world. Yesterday, when I tried to access Housing Panic, well wouldn't you know -- I couldn't get to this site. It's been blocked. For some reason, it has been placed on the list of unaccessable web-sites.


anagama said...

I made a $200K tax free profit owning a home for a little less than 3 years.

Congratulations, you hit the market at the right time and bailed at the right time. That however doesn't mean houses are a great deal right now.

Different context, consider the stock TNH (fertilizer company):
TNH Chart
About $19/share in Sept 2006, recently (as in the past few weeks or so) hit $140/share. In other words, it increased in value 7 fold while paying dividends. That's some killer growth. If you had $250k of that, you'd sell out at $1.75m.

BUT: If you had bought at the $140 peak, you'd already be down $28/share (its now at $112).

Just because TNH turned out to be a bargain at $19, doesn't mean it still is at $112 or $140. Same thing with houses -- just because you got in and out at a good time doesn't mean houses are always a good investment.

For what it's worth, I owned TNH for a while with a cost basis of about $20/share but eventually bailed at my cost when it didn't seem to be going anywhere plus natural gas prices were on the rise (natural gas=fertilizer). Anyway, even though I didn't lose money, I sure do feel stupid now. If my crystal ball hadn't been fritzing, I could be retired now.

DrNo said...

The 95% in between will go about their business as usual not giving a fuck what anyone says, Keith and Mozillo included.

July 25, 2007 9:40 PM

Yeah right.

You don't care what Keith says, yet you troll his blog everyday. Sure.

edd said...

'Underwriting' in 2004 …
Countrywide assets: $ 98 billion.
offers "automated underwriting"
Solution: MindBox's ARTEnterprise
decision engine.
by Judy Ward June 2, 2004 [!!]

Countrywide Home Loans …has reaped the benefits of the recent mortgage explosion, processing more than 150,000 loans monthly.
Last year it handled $434 billion in new mortgages.

"The mortgage industry has seen a huge couple of years ..." says Scott Berry, Agoura Hills, Calif.-based executive vice president of artificial intelligence.
… Its automated underwriting software has helped make that possible by speeding up the approval timetable. "Without the technology, there is no way we would have been able to do the amount of business that we did and continue to do," Berry says.

And part of that success stems from the bank's decision to give its third-party originators access to the same software. "Industry-wide, there has been a recognition that the real efficiencies in the process come from bringing the decision closer to the point of sale, so it's accessible while the
broker is sitting there in front of the borrower".

Countrywide opted to roll out the ARTEnterprise rules-based decision
engine that it had been utilizing
internally since 1992 to its third-party originators. Last December, it significantly expanded its annual license for the technology from Greenbrae Calif. MindBox.

Prior to automating the process,
getting an answer from an
underwriter took up to a week.
"We are able to produce a decision
inside of 30 seconds today".
And previously, every mortgage
required a standard set of full
documentation. "What automated
underwriting recognized is that a
lot of documents aren't indicative
of default," Berry says. …

"We had a pretty solid track
record with MindBox," Berry says.
"We took a cursory glance at the
other stuff out there, and we
did not find any driving business
reason to make a change."

Countrywide implemented the system
with its correspondent banks in
late 2002 and throughout 2003, and
with the wholesale channel in 2003.
Third-party originators access the
software through Web portals
provided by Countrywide; they do
not need to download any software.

"Training was not necessary". …
The project's only challenge has
been convincing some third-party
originators to use the new system
... There were no real technical
issues." ... The system tells
them what documentation they need.
"We are taking out the X factor of
subjectivity ... we are ensuring
that every transaction is being
evaluated on the data." ...

"Given the complexity of the
products out there in the
*mortgage space* - which will
increase as rates begin to rise-
that virtually guarantees that
there will not be any loan officer
or originator that exactly
understands every option."

como sean usted said...

Why buy now? The Fed will lower rates and it will not help home prices at all. You'll end up with lower home prices and 2% rates. That is how the situation played out in Japan. RE over there declined for 15 years straight even with rates at 00%. After this debacle, it will take a decade or two before bond buyers forget about the reaming the Wall St fraudsters gave them

Smokum if ya got um Orange boy said...

118 million cashed out while CFC stockholders left holding the bag! LOL!!!!
Mozilo is probably got a jacuzzi full of high priced Newport beach escorts tonight laughing as they rub his orange body and him stuffing $100 bills into their g-strings.

edd said...

"The Countrywide Story Continues"

"Countrywide remains an American
success story. …remains the #1
lender to minorities ...as well as
the #1 lender in low- to moderate-income communities. …
The company is setting new operational records and delivering strong earnings growth … while the
leadership of Angelo Mozilo and
Dave Sambol strategically
positions Countrywide to become a
stronger, more competitive and
more valuable company in coming
© 2007 Countrywide Financial Corp

Bitter Renter said...

We get taken by hucksters and human scum every day. It's called capitalism and the last time I checked most of you were solidly behind supporting it. This same kind of thing goes in health care, retailing, the stock market, insurance, you name it. Real estate just had its moment in the sun.

See, capitalism, the system most of you support, is based on the idea of selling someone something and making this thing called a "profit" which by any measure is taking money from someone and giving them nothing in return or as it's more commonly known, theft. The more of this "profit" one makes the quicker one can escape the system that condones such a repugnant, usory, non-altruistic activity.

Anonymous said...

Keith honestly how are prices still holding up. I live in maui Hi and prices are flat but still outrageous. In Los Angeles still way out of wack and even in utah houses that were 300,000 2 1/2 years ago sell for 500,000. very few people make enough to buy at these prices. I sold a house in LA for 400,000 in 2002 and it worth 700,000 today. I bought the house in 99 for 200,000. I thought 200,000 was overpriced. I not kidding about overpriced at 200,000. I made 80,000 salary in 99 and the rate at 7.75 30fixed and money was pretty tight with savings, taxes etc. My property taxes then were 2,200 a year and know that how property taxes are 7,700 a year. I don't now how these people do it, HOW ARE THE PRICES NOT DROPPING EVEN IF THE PRICE ON THIS HOUSE DROPS TO 400,000 IT STILL IS TO HIGH.

bozonian said...

Look, everyone who is holding a bag (bad mortgages, bad securities, plummeting value bubble house) is hiding it as best they can, trying to find the next idiot in the Ponzi chain to buy the overpriced garbage. Look at Bear Sperms. A month before billions got flushed down the toilet they were saying everything is fine.

The whole housing market is rotten to the core. Maybe the cover of Time magazine will the the boot of destiny that kicks in the front door making the entire structure collapse.

Anonymous said...

Countrywide Motto: Bend over, we're going to "service" your loan.

Anonymous said...

Mozilo candidly told investors Countrywide would be "treading water" in 2007, but indicated he thought the worst was over for the housing bust.

I like the floating analogy. It reminds me of another great event in history. Something about a big ass ship that would never sink.

The difference is, as I recall, that boat from history found a bottom eventually.

Anonymous said...

Anonymous said...

AAPL and AMZN stock are flying through the roof. That means home prices will be heading up too.

People don't buy books or phones in a recession. Dopes

July 26, 2007 12:57 AM
First NO ONE is saying we are currently in a depression, just a housing recession.

Second, those purchases were made w/ the last of the HELOC Housing ATM money, mortgage fraud money, REIC worker salaries who are now laid off and homedebtors pre-ARMmagedon.

Outside of the miserable renter dopes who'll have positive cash flow to keep the economy going once the toxic loans all explode the already WEAK consumer spending is going to go negative big time, but don't worry by then you'll thrash and grasp onto some other scintilla of information to crow about how great everything is when it really is not.

Ciao B!tch

Matthew said...

So, the marked to market must mean that my mortgage loan receivable, which was sold and ultimately used as collateral for another loan, had to be valued and borrowed against as if I would pay the entire loan including interest to maturity?

So if I pay the loan off early or can't pay-off the loan and funds were borrowed on full repayment, someone will have to take a loss?

The possibility (but not obligation) of paying off the loan early is possible in the mortgage backed securities and is a huge part of the 'usual' complexity that PhDs like me (in another life) would be modeling with complex algorithms and statistical assumptions.

That gets passed through---as do the losses from defaults, which are modeled in a different way.

In the old-fashioned kind of pool of mortgages, everybody who put in capital would share the risks and rewards equally proportionally to their shares.

In the new kind of CDO, there are varying classes of shareholders with distinct rights and motivations.

The high rated 'tranches' (class of shareholders) take losses last, and the low rated tranches take losses first.

When the crap hits the ventilator, the low-rated tranches get whacked first. But at that point, these investors are motivated to "work things out" with the borrowers and maybe stretch out terms or finagle stuff. But the high-rated tranches don't want that! They don't want the possibility of making things worse---they want to sell the losing properties and mortgages ASAP, get cold cash to protect their own position (which was priced on the basis of negligible risk of default!), and hose the low-rated tranche holders by putting a wide buffer of cash between them and losses.

Matthew said...

On the underwriting black box:

"we are ensuring
that every transaction is being
evaluated on the data." ...

Garbage in, garbage out.

And part of that success stems from the bank's decision to give its third-party originators access to the same software. "Industry-wide, there has been a recognition that the real efficiencies in the process come from bringing the decision closer to the point of sale, so it's accessible while the
broker is sitting there in front of the borrower".

Or when the broker is sitting there twiddling numbers and seeing what "works" to get the desired result?

In principle this systematic modeling of underwriting might be a good idea.

But the brokers are paid per "successful" transaction, not per failed one, and so they have a tremendous motivation to lie on the inputs. Give them a chance to play with the computer as much as they want and surely they will figure out exactly what the black-box's decision boundaries reallhy are.

A human underwriter would quickly figure out when he was being gamed.

A solution to this problem is to charge the broker a substantial amount for every evaluation.

Anonymous said...

"So, I guess we are treading water in 2007. But we thought those circling fins were friendly dolphins! C'mere Flipper!"

Anonymous said...

And yet the worst is yet to come - oouuchh!

Keyser Soze said...

Mark in San Diego....please check your math.