A HousingPANIC message to the failed Housing Gamblers of America: You made your bet, you lost, now send in the keys and run

Hey, you made a bad bet and you lost. You lied about your income and took out a no-down, no-doc, interest-only, teaser-rate, piggyback negative amortization loan (good god does anyone remember 30 year fixed?).

You bought a mansion you had NO BUSINESS living in at your income level, you bet prices would go up and instead they cratered, and now you can no longer make your reset payment.

Who cares!!! You're not the bagholder! Hedge funds, foreign banks, US taxpayers, insurance companies and people all over the world are! But not you, no way no how!!! Party time!!

So just walk away. Send in the keys. Jingle mail. Ah, the American Dream!!!

Since there's no such thing as personal responsibility, ethics or morals anymore in America, you get off scott-free. Just walk away, stop hemorrhaging cash, and try to keep as many of your ill-gotten gains as you can.

I hope you transferred some of your cash-out-housing-ATM-refi-loot to unmarked Swiss bank accounts. I hope you bought lots and lots of stuff that you can now put on eBay. And a few years from now, don't forget to pull the same scam again!

Sleep tight!

Who'd have thought that America's imploding housing market and mortgage meltdown would cause a worldwide financial collapse?

The US housing panic and mortgage meltdown will be felt around the world. The innovation of CDOs spread the US cancer everywhere.


As home prices crater, foreclosures soar and the US housing market implodes, people around the world will wonder how idiots like Casey Serin, Angelo Mozilo, Alan Greenspan, Bob Toll and David Lereah took down the global financial system.


We live in interesting times HP'ers, and you're at the center of the storm. Buckle up, it's gonna get bumpy.

We all stand in the shoes of US mortgage-holders now. The financial system, we now know, relies on them. In recent weeks, a string of European banks has discovered that they had lent to US borrowers, as investment-grade securities they held turned out to be contaminated by bad US subprime mortgage bonds.

With the risk of US mortgage defaults now dispersed globally, not just Americans but everyone else in the developed world has an interest in averting an escalation in US defaults.

There is also a global search for culprits. Alas it turns out that almost nobody is blameless.

The importance of US housing is hard to overstate. For at least a year now, a central risk on investors' radar screens has been that falling house prices would force US consumers to spend less. That could cut global demand. Housing data this week was that US house prices were falling and the overhang of unsold properties was rising.

It's getting pretty funny all the crap that comes out on Friday night after market closes. Here's the latest from Alt-A Liar's Loan disaster IndyMac

Nothing will ever beat AHM announcing they weren't paying a dividend (hours before the whole company blew up) at 10pm last Friday night. But here's the latest from "Don't worry - all is well, all is well" IndyMac c/o Blown Mortgage who is all over this mortgage meltdown from the inside...

Bottom line folks - IndyMac in my personal opinion won't be in business in a few more weeks. But regardless of that, what's most important for America is that people who want to buy homes (the few that are left) won't be able to get a loan. Hello Mr. Demand. Meet Mr. Supply. Be sure you talk to Mr. Price.

(and yes, I'm short IMB):

Dear Valued Customer,

In response to recent liquidity issues in the secondary mortgage market, we have found it necessary to revise a number of our program limits and underwriting guidelines. The following revisions became effective for loans that were not rate locked prior to 12:00 p.m. Pacific Time today. The Indymac Lending Guide will be updated to reflect the changes shortly.

Loans affected by the revisions below but rate locked prior to the effective date will be accepted and funded provided all QuickPricer® ratelocks are converted to full e-MITS® submissions by August 10, 2007 and all credit packages are delivered to Indymac by August 17, 2007. In addition, there will be no grace period or “auto-extensions” for clearance of conditions after the rate lock expiration. All loans that were previously delivered and not ratelocked are subject to the revised guidelines.

Program Revisions - Multiple Programs

The following revisions apply to the following programs, where applicable:
• Alt A - Standard Products with loan amounts that exceed the current conforming loan limit
• Alt A - Super Jumbo and Ultra Jumbo Program loans - all loan amounts
• Alt A - Pay Option ARM loans - all loan amounts
• Construction to Permanent Loans with loan amounts that exceed the current conforming
loan limit
• Consumer Residential Lot Loans - all loan amounts
• HELOCs - all loan amounts

Documentation Types:

• Stated Income documentation is available only when one or more of the borrowers is
self-employed for loans with the following characteristics:

• LTV or CLTV greater than 70% or
• Decision Credit Score is less than 700

Stated Income remains available for borrowers with all types of income when the LTV &
CLTV are less than or equal to 70% and the Decision Credit Score is 700 or greater.

• FastForward, No Ratio, NINA, and No Doc documentation types have been eliminated.

Maximum LTV/CLTV: For Alt A - Standard Products, the maximum LTV/CLTV is 95%. For the Lot loan program, the maximum LTV is 80%.

Minimum Decision Credit Score: A minimum Decision Credit Score of 640 is required, unless a higher score is specified in the applicable program limit table.

First Time Homebuyers:

• The maximum LTV/CLTV is 90%
• The minimum Decision Credit Score is 680
• Not eligible for Construction to Permanent loans or Lot loans

Pay Option ARM Products: The following products have been discontinued:

• 12 MAT
• 40 Year 12 MAT
• FlexPay 12 MAT 1 Year
• Flex Pay 3/1 LIBOR

The Flex Pay 5/1 & 7/1 LIBOR products remain available.

For further questions, please contact your Indymac Bank sales representative

Just when you thought the subprime CDO mess couldn't get any worse, it's gonna get a LOT worse real quick, thank you Bear Stearns hedge fund blowup

Can you say systemic meltdown? Can you say spreading cancer? Can you say Enron-like unraveling?

Homebuilders are holding inventory on their books that is still wildly inflated - that per Sarbanes Oxley must be marked down to true market value. The financials and hedge funds are holding Subprime and Alt-A liar's loan CDO cancer at wildly inflated values, that also must be marked down to true market value.

That's why Merrill didn't sell their Bear Stearns junk the other day - if they did, then the new market price would have been achieved, and you'd have hedge funds (and Merrill themselves) failing left and right.

Get ready HP'ers. The fuse has been lit.

Peter Schiff, president of Euro Pacific Capital] argued that if the bonds in the Bear Stearns Companies Inc. (BSC) funds were auctioned on the open market, much weaker values would be plainly revealed.

"This would force other hedge funds to similarly mark down the value of their holdings. Is it any wonder that Wall street is pulling out the stops to avoid such a catastrophe?," Schiff said.

"Their true weakness will finally reveal the abyss into which the housing market is about to plummet," he said.