Subprime Publicity Damages “Home Buyers’ Psychology”
Some housing bubble news from Wall Street and Washington. Bloomberg, “Hovnanian Enterprises Inc., the worst performing U.S. homebuilder stock, reported a wider second- quarter loss than earlier forecast and said the subprime mortgage crisis is exacerbating weakness in the home sales market. ‘The adverse publicity surrounding the subprime market has further damaged home buyers’ psychology, resulting in decreased demand and leading to continued use of sales incentives,’ Hovnanian said.”
“Hovnanian said today it will have a pretax expense of as much as $20 million to cut the value of its property and walk away from deposits on parcels of land it doesn’t plan to buy. The company delivered 30 percent fewer homes last quarter than a year ago and saw ‘exceptionally high cancellations’ in the Fort Myers-Cape Coral area of Florida.”
“Net contracts for the quarter declined 21 percent to 3,116. Excluding Fort Myers-Cape Coral, the company’s cancellation rate was 30 percent and net contracts dropped 17 percent.”
The Associated Press. “‘These contract results reflect a continued challenging operating environment in most of the company’s markets,’ Hovnanian said in a statement.”
From Forbes. “The extent of Hovnanian’s woes is on par with many of its peers. Recently, Pulte Homes said first-quarter sales dropped 38%, to $1.8 billion, in the first quarter, reflecting a 37% decline in home closings. Another major home builder, D.R.Horton also warned investors last month that sales orders tumbled about 40% in the second quarter.”
“‘I think the loss will only get worse as time goes by, at least for another year or two,’ JMP Securities analyst, Alex Barron, said. ‘Most of the builders are operating on very thin margins right now, as soon as they drop the price a little bit, they start losing money.’”
The Orange County Register. “New Century Financial of Irvine, the largest subprime lender to file for bankruptcy protection, said it will lay off 2,000 of its remaining workers, including 500 in Orange County, effective today, after failing to find a buyer for its loan-making units.”
“‘This brings us to today, which is a day that I could never have imagined facing,’ said CEO Brad Morrice. ‘We must terminate most of our remaining workforce, including virtually all origination personnel.’”
“Kathleen Allen, a regional operations manager who is being let go after 11 years with the lender, said she held out hope that part of the company could be salvaged until yesterday’s call. ‘It’s hard to understand how we were number two in the nation and now we are nothing,’ Allen said.”
“Analysts said New Century could not find a buyer for its assets because so many other companies are trying to unload their assets amid the industry meltdown. ‘If you can get it off your hands without losing money, that’s the best you can expect,’ said analyst Bose George.”
“He said subprime loan volume could drop by a third or a half this year. That doesn’t bode well for laid off workers, he said. ‘That has to come out of somewhere,’ George said. ‘Even if platforms are sold the buyers will have to do the trimming. It’s kind of inevitable that this stuff happens for a little while.’”
“Embattled subprime lender New Century Financial Corp. said KPMG LLP resigned as the company’s auditor, effective April 27, noting that KPMG didn’t include any adverse opinion in its audit reports for the years ended Dec. 31, 2005 and 2004.”
“On Feb. 7, New Century said it needed to restate results for the 2006 quarters ended March 31, June 30 and Sept. 30 to correct accounting errors for loan repurchase losses. New Century was advised by KPMG that the 2006 accounting issues could constitute a material weakness in the companys internal control over financial reporting.”
“NewStar Financial, Inc. today reported…a $14.9 million pre-tax charge to recognize impairment in the company’s residential mortgage-backed securities portfolio.”
“The company also announced that it would discontinue its investment activity in this asset class and manage the disposition of its current portfolio over time to optimize its economic value.”
“‘A severe correction in the RMBS market offset an otherwise strong quarter for our core lending franchise,’ said CEO Tim Conway.”
The Chicago Tribune. “The downturn in the housing and mortgage industries is crimping the profits of another Chicago-area financial-services company. Old Republic, which characterized the results as ‘a bit disappointing,’ writes insurance policies that kick in when a borrower defaults on a first mortgage home loan. As more mortgage lenders reported loan defaults, Old Republic had higher claim costs in the quarter.”
“‘I hate to say it, but when we consider the continued negativity of housing statistics so far this year, it does not augur very well for the title business,’ Al Zucaro, Old Republic CEO, said in a conference call last week. ‘Revenue expectations for this year, for the second quarter at the least, are probably not going to be met in light of these trends.’”
“The industry, in fact, could be in for tough sledding well into 2008. ‘It took a while for the housing and mortgage lending industries to reach a fever pitch,’ Zucaro said, ‘and it will take as long to wring the excesses out of this part of the economy and bring down the temperature.’”
“Employers in the US last month added the fewest jobs in more than two years as payroll losses spread beyond homebuilders and manufacturers. The unemployment rate rose.”
“Ian McCarthy, CEO of Atlanta-based builder Beazer Homes USA Inc., said April 26 that the housing market remains ‘extremely challenging,’ and he doesn’t see any signs of recovery.”
From MarketWatch. “Mortgage brokers would be saddled with new rules designed to protect borrowers in the hard-hit subprime market under a bill introduced Thursday in the Senate.”
“The proposal would force brokers and originators to assess a borrower’s ability to repay a loan before taking one out, and prohibits ’steering’ consumers to rates or terms they can’t afford.”
“Also Thursday, the Federal Reserve said it will hold a public hearing June 14 to consider adopting new rules to combat abusive lending, especially in the subprime market.”
“‘The goal is to find ways to promote sustainable homeownership through responsible lending, informed consumer choice, and effective guidance and regulation,’ said Fed Gov. Randall S. Kroszner in a statement. The Fed has authority to issue regulations that cover all lenders, not just banks.”
The LA Times. “The notion of a taxpayer bailout would be highly controversial, and many politicians are wary of having government come to the rescue of borrowers who took out voluntary loans. Community activists, however, maintain that many borrowers were deceived about the costs they were incurring.”
“‘To be clear, no one is getting bailed out,’ said a statement by John Taylor, president of the National Community Reinvestment Coalition. ‘Borrowers will repay their loans, but at interest rates and with fees that are fair and reasonable.’”
“As state lawmakers rush to reform lending practices that have contributed to a recent surge of mortgage defaults and foreclosures, consumer advocates say these efforts fall short of what is truly needed: a federal law protecting home buyers.”
“Any new laws from Congress are far from certain, however. Senate Banking Committee Chairman Christopher Dodd says increased regulatory oversight and voluntary actions by lenders are preferable to a government bailout.”
“Kurt Pfotenhauer, senior vice president for government affairs at the Mortgage Bankers Association, called Dodd’s approach ‘responsible, thoughtful and forceful.’ A taxpayer-financed bailout plan doesn’t make sense, he said, because ‘the mortgage finance industry is already stepping up to help those borrowers.’”
“Steven Wieting, senior economist with Citigroup, said tighter lending standards should result in lower levels of home sales in the coming years. He does not believe the mortgage market’s troubles will hamper the economy in the short term.”
“As defaults rise, credit agencies Standard & Poor’s and Moody’s have in recent weeks downgraded or placed under review bonds backed by risky mortgages, particularly second mortgages that borrowers have used to finance 100 percent of a home’s value.”
“Economist Christopher Thornberg said the credit rating agencies should have been far more skeptical. ‘These things should have been rated as risky a long time ago,’ he said.”
“‘I think the loss will only get worse as time goes by, at least for another year or two,’ JMP Securities analyst, Alex Barron, said.”
What is going to make things better a year from now? Are incomes going to increase enough for first time buyers to afford median priced homes?
What is going to make things better a year from now?
A quick, 40% correction!
a long those lines, HOVs cancellation rate improved a bit, so don’t be surprised if that means there are signs of “stabilization” in the housing industry.
Stabilization? Great! It’s good to know house price depreciation has been contained to the “subprime” houses. The Alt-A Refi Heloc crowd with fancier cars than incomes will be delighted.
“…so don’t be surprised if that means there are signs of “stabilization”….”
This is a brutal blog for comments that are intended to instill a “head scratching quandary” for the 80 IQ crowd.
Its funny that 80% of people believe that they are above average intelligence.
It’s even funnier that the gap between a chimp and “ordinary intelligence” is about 20 points while the gap between one of “ordinary intelligence” and a “genius” is 40 points.
If I have to explain that, move along. Nothing to see here.
If his IQ reaches 80, he should sell.
We do have stabilization. Pricing trends have stabilized at minus 10% per year, into the foreseeable future.
LOL! Cancellations went from 36% to 32%. That’s hardly statistcally significant.
BUT, THAT’S NOT ALL… I would expect cancellations to INCREASE FROM HERE. The contracts signed 3+ months ago before the subprime explosion, when buyers still had a shred of hope of geting their existing places sold or had them under contract, will see those “contingent” sales vanish… so MORE CANCELLATIONS. ADD all the coming wave of rate resets in and all that negativity.
This Stabilization will be just like the last one that was supposed to happen this spring. This bust will last well into ‘09 before we see stabilization for the HBs…
Cool, I am getting a 40% raise next year! Nice!
I better get out there and spend it before I actually get the money! It’s my duty as an American citizen to live in debt up to my eyeballs!
“‘The adverse publicity surrounding the subprime market has further damaged home buyers’ psychology, resulting in decreased demand and leading to continued use of sales incentives,’ Hovnanian said.”
That is a stretch. Subprime carnage did not damage buyer psychology. Subprime cut them off from closing deals they could not afford. Subprime affected ability to buy not willingness OR desire.
It is and was a psycology that needed to be damaged. But I think damaged is the wrong choice of words. It’s more like an unhealthy pscology that needed to be stripped. The last 5 yrs most have felt far wealthier than they actually are. Actually, they never were. Today millions are waking up to the fact that they’re broke, and worse than that, broke and in debt up to their eyeballs, as the commercial goes. Unfortunately, the wake up is coming way too late to save the masses. Right now most are buying time by selling this, borrowing that, juggling what they can while they can. But sooner, rather than later, the balls will drop. They should have been stripped of the “psycology” and woken up years ago. Too late now.
We haven’t even really started the pain yet.
I thought buyers were insane in 2005. The psychology is improving, outside NYC at least.
looks like the mortgage whisperer was making buyers calm and submissive.
ROTFLOL:)
The mortgage whisperer?
ha
Listen up WT. “New York City will not decline in price. No way, no how, no chance. It is the most special place in the universe. You don’t know what you are talking about. Everybody here has the money to buy.” Excuse me while I go kick myself in the nuts.
Why do noo yawkers kick themselves in the nuts?
Because they can?
“damaged home buyer’s pschology” should be “reduced the supply of fools by enlightening too many potential buyer’s”
Once, again, the old “shoot the messenger”/blame-the-bad-press canard. Of course, Hovnanian (nor anyone else in the REIC) was complaining during the last six years, when the media was uncritically parroting industry-friendly “blue skies” and “new paradigm” propaganda ad nauseum.
I have to agree that Fitch, S&P and Moodys were exceedingly optimistic rating the MBS bonds that these companies issued. They can’t possibly be that incompetent, there must be a conflict of interest that has driven the ratings on junk bonds to investment grade.
It’s corruption, plain and simple. Soon respect for members of the financial community are going to be rated below lawyers and used car salesmen. What a shame for the majority who are honest and upstanding.
They do not have your best interest at heart. Be very afraid. Fear the finance community.
Members of congress
CIA - Central intelligence without a feed back system
“The Fed has authority to issue regulations that cover all lenders, not just banks.”
It’s about time the Fed stepped up and took some responsibility for the ongoing debacle. Keep in mind, however, additional regulations will weigh heavily on future housing demand.
You must recall that the Fed’s charge is not to take care of individuals: they are charged with taking care of the banking system.
If you are waiting for them to help individuals and take any responsibility, better get a chair. It’s going to be a long wait.
Today on CNBC all talking heads were in agreement that increasing housing inventories will result in cheaper rents/sale prices, which will result in lower inflation numbers, which will enable the Fed to cut rates again…any thoughts?
It’s about time.
Ignore those fools.
THeir conclusion remains the same irrespective of the market.
Agreed. Does anyone here *still* believe the official CPI “inflation” numbers coming out of the BLS? Does 3% sound credible to anyone who needs to buy food, gas, electricity, education, health care or pay rent? They will continue to hedonically manipulate the stats to produce whatever magic “inflation ex-inflation” number is needed to justify lowering rates –to help bailout the banksters.
IMO, even if they drop FF rate back to 1% or 0% (Japan-style ZIRP) it still won’t be enough to save the RE market. However, it might be enough to slow/prolong house price deflation (as it did in Japan).
It drives me nuts when I read this kind of post. Yes milk is up 10% and gas is up 10%. But holy s**t put things in perspective. What % of your expenditures do gas and mil make up?
Cars are cheaper today than last year. MSRP prices for cars Q1 were lower overall than Q4 last year. House prices are lower as we all very well know. Computers (as always) are cheaper than last year. That more than makes up the 10% price in milk that everyone seems so concerned about.
Ed,
Since CPI strips out volatile items like food, energy and housing (mortgage), the “milk” argument is stronger than you think. If you don’t do the food shopping, you may not be aware how fast and how high prices have been rising in the last few months. As have pharm costs, doctor’s visits (in my experience) clothing, and of course gas.
For middle class americans, in debt up to their eyeballs, the terrible employment numbers, increased layoffs, mortgage woes, and the soaring cost of essentials like food and gas will probably keep computers off folks’ shopping lists.
Unless you’re trying to see the “”goldilocks” scenario–and this is the wrong crowd for that.
Ed,
Milk is just an example. There are many more. How about your health insurance? How about meat? How about housing (over 2003)? How about travel? How about education? How about beer?
If it can’t be manufactured cheaply off shore, it’s more expensive.
Ed, feel free to believe what the BLM spews. My wallet tells me that I’m 8% or 9% behind a year ago!
P.S. I don’t make car payments. Change in auto prices are unimportant to me.
Not only that Ed, but you are looking at new cars, new computers, and owning a home, all things are luxuries in this country. Things like gas and food are the necessities that are being overlooked by the CPI.
The AVERAGE American, who rents, drives an older car, and hasn’t purchased a computer for a few years is unaffected by the things going down in price, but they are destroyed (financially of course) by the cost of gas which, in Southern California at $3.50 per gallon, can eat up a healthy chunk of your paycheck.
Thanks all for your comments. Another thing thing that really bugs me is the so-called “volatility” excuse the BLS gives (as a reason to exclude food, energy & housing). This just doesn’t hold water, for two reasons:
(1) These guys are smart, trained professional statisticians, correct? Then why can’t they just use moving averages to smooth out price volatility in those sectors? Are they telling us they didn’t learn this (basic) technique in college statistics? Please…
(2) Why is it that price “volatility” is only “bad” and needs to be excluded when it’s going UP? Funny, but I’ve never seen them exclude consumer electronics when prices in that sector are “volatile” (but in the DOWN direction).
Things that make you go “hmmm….”
That would be interesting InvestorGirl. Lowering of rates would not save housing at this point. That ship has sailed. But it will really spike the stock market. It will also kill the dollar so I have no idea how you would play this possible outcome.
I bet you $5 interest rates won’t go down. Not at the next fed meeting anyway. Thereby sticking a fork in the spring selling season…
BWAHAHAHAHAHAHA
The CNBC heads just want the rates to go down to revive their failing RE investments.
Knob Bonnets.
ROFL it just rolls off the tongue doesn’t it?
NO!! They want rates to go down, to push the market up, because more poeple will want in, and will watch CNBC to see what to buy, and they’ll be confronted with ads from lots of comapnies saying “buy me”, generating ad revenue for CNBC.
I hate ads that don’t advertise products, but instead advertise the company. They aren’t trying to improve profits, just get fools to buy the “hot stock”.
I remember back in the day, I saw a commercial with a bunch of people say “why”, “why”, “why”. Then one climbs up on the desk and says “why not”. Soon, everyone is up on their desk saying “why not”. Corporate LOGO. End.
What the F… was that trying to sell me?
Took me a while to rigure it out. It was trying to sell me hype in the stock.
Company, ENRON!!!
F’n CNBC and it’s “oh, buy me” ads advertising companies instead of products.
Nobody seems to talk about the dollar on that program.
I noticed that to.
Stocks are up. Housing isn’t that bad because the fed will cut rates and save it. Profits beat street (which EVERYONE KNEW THEY WOULD!!!).
Oh, yeah… dollar is at all time lows. Now back to the stocks!!
Everybody is so down on the Dollar. Must be a good time to buy - seriously!
Right — it’s the publicity that’s causing all the trouble.
“Kathleen Allen, a regional operations manager who is being let go after 11 years with the lender, said she held out hope that part of the company could be salvaged until yesterday’s call. ‘It’s hard to understand how we were number two in the nation and now we are nothing,’ Allen said.”
Well, Let’s see. Your clients couldn’t afford the loans you were selling them and are now going bankrupt by the thousands. Getting the picture yet?
Who has the bigger problem? You, now out of a job, OR the guy you put into a 100% neg-am 500K loan that resets to 12% and who makes 50K/year?
‘It’s hard to understand how we were number two in the nation and now we are nothing,’ Allen said.”
This statement just is utterly astounding. Kathleen, perhaps after 11 yrs at NEW you don’t understand the mortgage industry nor the ramifications of the loans your company provided that clearly was the enabler of the massive market run-up.
They were #2 all right. And they stepped right in themselves.
LOL!
You bring up an excellent point. I have a hard time with industry insiders who couldn’t see this coming. It was about ‘02/’03 that i really began seeing troubling signs. By ‘04 I knew beyond a doubt we were headed for trouble. It was plain as the nose on your face that what was occurring was unsustainable. Back in ‘02/’03 I started “preaching the word” to those around me to start stashing their acorns, make their money and save it, because what we were seeing was a once in a lifetime event (to those of you in the industry reading this and hoping for a quick return of the easy money days, dream on! You won’t see it again for a long, long time). So no sympathy for those caught with their pants down. You didn’t need to be some kind of amazing mind to see this one coming.
Great post, but I thought 1/2 the smart people said housing was recovering this spring? All the Home Builder stocks have been gaining how could all these savvy people and Kathleen be wrong? It’s the psychology of greed and nobody is responsible for anything.
Greed and corruption. I’m not even in the mortgage business and I could see it coming at the end of ‘04.
The 50% of smart people who were looking for a rebound had either an IQ of 65 or were talking lies to try in a futile effort to reinflate the bubble.
You decide, smart people with 65 IQ, or corrupt liars.
Well, Kathleen, let’s just say that number two (aka shhhh-t) happens.
It’s hard to understand how we were number two in the nation and now we are nothing,’ Allen said
Translation - I didn’t know what was going on. I relied on those
who report to me for information.
Please don’t serve me with a subpoena. I am not Ken Lay.
‘It’s hard to understand how we were number two in the nation and now we are nothing,’
There are going to be a lot of would-be Masters of the Universe asking themselves a similar question in the next few years. They ignored risk, mistook an irrational market for their own genius, and are about to discover that the dice don’t roll sevens forever.
lol it’s like blaming the media for Iraq…
that media sure is more powerful than i thought.
…what next? the media brough the soviet union down too i bet
You think the Army embeded reporters so the media could get front line reporting? No way! The Army did it because they knew just how powerful the media was. Once a reported was embeded, there was not way for the Iraqis to win.
No offense but I feel dumber for having read your post.
and may God have mercy on your soul.
Billy Madison….anyone?
I used to work for KPMG Consulting back in the glory days (late 90s). KPMG split off it’s consulting division 4-5 yrs ago (now Bearing Point). I still have some good friends on the tax & audit side. KPMG was slapped silly in 2005 following a “tax shelter” fraud http://www.boston.com/business/articles/2005/. They avoided the “Andersen” penalty because the Government was afraid of the ramifications of losing another of the big 4. Apparently, though, KPMG was put on strict probation - one more f-up and they are done.
Flash forward to today and New Century. I hear people at KPMG are a little nervous regarding the New Century fallout. Everyone knows federal investigators, lawyers, and of course, politicians, will be all over this like white on rice. Should be very interesting…
We have KPMG auditing us at the moment here is OC and the partner on the job is REALLY nervous about what will happen with New Century. I just can’t wait to see myself!
Let’s start a rumor of an auditing cover up at NEW! That ought to get the juices flowing
Do they not teach ethics in business schools anymore? Such is the state of our Schools of Higher Learning.
Sure they do. It’s just whose ethics you are learning. Welcome to the results of relative morality.
From the Marketwatch article:
“In another move aimed at helping low- and moderate-income borrowers, members of the House Financial Services Committee approved a bill Thursday that increases federal loan limits in high-cost areas of the country and authorizes lower down payments for borrowers.”
This is the real taxpayer-funded bail-out: Our brilliant congresspeople are going to try to prop up high-cost markets like CA and NY by increasing FHA loan limits (currently at something around $420K) and decreasing minimum down payments. Excellent thinking, guys.
These guys are scary stupid, evil, or both.
They are just so disconnected from real life. They don’t get it. It is probably time to just start over. Maybe we could dust off the constitution and hit them across the face with it.
They want to show that they tried “something” to help the lack of liquidity in the market.
The problem isn’t with liquidity. Anyone can see this. The problem is with affordability (prices being too high). The family making $50,000 per year doesn’t need someone else to give them a $500,000 loan that they could never repay, they need a home that costs $200,000.
There are plenty of lenders out there that will make this $200k loan (like all of them).
The only way to get back to that point is to let the lending market to take a massive financial hit, and tighten underwriting standards.
Free money drove prices to the all-time highs that we’re still seeing today. Tighter money will drive prices back down.
Be careful not to confuse money and credit. The loan is a stack of IOUs all the way back to the MBS to which it’s tied. Real cash had little involvement, if any. This is the reason why cutting rates and a rising Dollar can happen. Credit collapses regardless of rate drops (ie. Japan), but the Dollar is bidded up to pay off those IOUs.
How does upping the limits and lowering the down help? There are still documentation requirements and a something down, right?
You can’t bring NINJAs back in with these changes.
People with good jobs and a down could probably already get an FHA, and are are probably way to smart to jump in now!!!
This bubble was created by inflating prices, and was held up by insane lending. Both have stopped, and in fact reversed. Now what?
Pop!
You got it. Everyone is talking about the Schumer bailout while the “real” bailout goes on behind the scenes. America is going to be a suprime lender with none of the rewards and all of the liability. Have you seen how low their standards are? Amazing.
Maybe Congress can authorize the FHA to start giving out no-doc option ARMs in order to help the housing market
“‘To be clear, no one is getting bailed out,’ said a statement by John Taylor, president of the National Community Reinvestment Coalition. ‘Borrowers will repay their loans, but at interest rates and with fees that are fair and reasonable.’”
Two rants here:
1. I’m sorry, but this is major BS. If you don’t like the interest rates or fees, then DON’T SIGN. You are still in control at that point.
2. I know the idiots who signed are dolts, but the whole industry is rotten to the core. The whole world is getting like this. Try collecting on an insurance claim sometime. You better be a lawyer or they will stomp on your “claim” real hard. Every policy is filled with loopholes to avoid payment.
More and more “service” industries are getting pretty good at maximizing their fees, but strangely seem to be behind the times when it comes to paying out.
Under the plan, nonprofit community organizations that specialize in housing concerns would use the federal money to locate troubled borrowers and lead them toward potential relief, such as more affordable loans achieved through refinancing or cheaper new loans — if lenders provide them.
Schumer estimated that the $300 million might help 300,000 individuals stave off foreclosure. Joined by Sens. Sherrod Brown (D-Ohio) and Bob Casey (D-Pa.), he urged that private lenders match each tax dollar with $2 more, creating a “foreclosure prevention fund” that ultimately could save 900,000 homes from foreclosure.
Sounds like another toothless measure to me. Not hugely expensive, but essentially ineffective. Also I’m so glad PA’s newest empty-suit Senator is on board with this effort. Jacka$s.
If the stinking real estate wasn’t horribly overpriced in the first place, the low income folk may not have had to resort to toxic loans. You’re not doing the low-income FBs any favors, you…
…Dorks. Idiots. Turds-in-Suits. $hitheads.
I’m talking about the legislators.
Oh, I forgot this one: TOOLS
So those 300,000 homeowners only need $1,000 each to keep them from foreclosure?
That’s like spitting at a forest fire.
asshats!!!!!!!!!!!!!!!!!!!
I know, it’s terrible. I’m being reduced to a sixth-grader’s vocabulary. I’d use that word of txchk57’s - nincompoopia - but that’s reserved for the sheeple and thus too good for the empty suit poseurs on Capitol Hill.
I don’t know where I got it from but Knob Bonnet seems to have replaced asshat for me. I’m beginning to think that’s what KB really stands for.
What I find hilarious is, it’s very common for a marijuana garden bust to be estimated @ $300 million, street-value wise, they do it all the time, heavilly inflated numbers thrown out, to make the public think that somehow nancy r’s war on drugs is somehow working…
To hear somebody who doesn’t seem like the village idiot to me, sprouting similar $ #’s, that will save us, might elevate him to full on idiot status.
300 mil just enough to buy 1 box of kleenex for each FB
Doesn’t sound like a bailout to me. Sounds like a payoff to the poverty pimps, much like our dear Preznit’s payoffs to the “faith based” charities on the other side of the aisle.
If you are eligible try USAA. One of the best companies in the world.
Love USAA. Dad’s three years in the airforce have been very very good to me (evn though I wasn’t born until they got home).
My father served in the Merchant Marine and Naval Reserve. Does that make me eligible for USAA?
I’m pretty sure the answer is yes. Check their website.
I agree they’re the best.
Slim,
I may be wrong,from their website…(but call them and ask)
Membership is open to:
* Children of USAA members.
* Active-duty officers and enlisted personnel.
* National Guard and Selected Reserve officers and enlisted personnel.
* Officer candidates in commissioning programs.
* Recently retired or separated military personnel.
* 1-800-862-6909.
“‘To be clear, no one is getting bailed out,’ said a statement by John Taylor, president of the National Community Reinvestment Coalition. ‘Borrowers will repay their loans, but at interest rates and with fees that are fair and reasonable.’”
So let me get this straight, Mr. Taylor. A person who has poor credit, low income and is being foreclosed on now gets a low interest rate, and that’s not a bailout in your world. Oh, and people who pay their bills and save money should pay higher interest rates? After all, they can afford it - sheesh!
Look, the home is going into default. No doubt about that.
The question is, now… Or can we make the home owner think we’re making them a deal, to get them to pay as many more payments as they possibly can.
He’s right. This is not a bailout. It is an attempt handcuff the buyer to his overpriced house for as long as possible on a faint flicker of hope that maybe prices are coming back.
“Try collecting on an insurance claim sometime.”
Man, did you get that right. My oldest son was hit and killed by a truck last October. Even though the truck driver was totally at fault, the truck’s insurance company tried their best to screw us over. Thank God, the two lawyers we have hired are keeping that from happening. The only way to deal with an insurance company is through a lawyer, otherwise you’re going to get f##ked over.
Sorry to hear that Doug. I hope your lawyers bleed those b@st@rds dry for trying to screw your family over.
Very sorry for your loss. And that you have had to deal with the subsequent problems during this difficult time.
Doug,
I am very sorry for your loss. My condolences.
The whole world is getting like this.
The whole world has always been like this. Every organization outside your small circle wants your money. It just seems to be getting worse because these people have access to more ways to get at you money.
It seems worse because businesses are not hiding it behind a facade of niceness. It seems to be getting worse because we are at a turning point. Businesses and people are used to having a certain amount of money. When money does not come in, the gloves come off and people become loud and rude. This is what you are hearing.
These sorts of idiots always want me to participate in their loss, but would wail like a banshee if I asked to participate if they had made a gain.
Schumer is brilliant! Repackage the loans for the poor and oppressed people. Now they’ll have a new 30-40 year $300k loan on a home worth $200K and it will be $2,000 a month verses $3,000. He’s saving them $1,000 a month and in 20 years they might have a little equity. What’s that you say? They can rent the same house next door for $1,500? Well I still think Schumer’s great. Think of all the non-profit workers he’s helping, roaming the streets for the “common good” finding people who can repackage their loan into a new product that cost 50% more than renting
Many of these people would be better served by foreclosure and then trying to get their poo in order for the next 7 years before trying again.
“‘I hate to say it, but when we consider the continued negativity of housing statistics so far this year, it does not augur very well for the title business,’ Al Zucaro, Old Republic CEO, said in a conference call last week. ‘Revenue expectations for this year, for the second quarter at the least, are probably not going to be met in light of these trends.’”
“The industry, in fact, could be in for tough sledding well into 2008. ‘It took a while for the housing and mortgage lending industries to reach a fever pitch,’ Zucaro said, ‘and it will take as long to wring the excesses out of this part of the economy and bring down the temperature.’”
It amazes me how the RE spider monkees just ignore statements like these.
“The company also announced that it would discontinue its investment activity in this asset class and manage the disposition of its current portfolio over time to optimize its economic value.”
In other words, dump this crap the second they find someone dumb enough to buy it. “Optimize its economic value” means getting more than 50 cents for the whole pile… If people stop buying MBSs, where will the lenders get cash to lend?
“‘The adverse publicity surrounding the subprime market has further damaged home buyers’ psychology, resulting in decreased demand and leading to continued use of sales incentives,’ Hovnanian said.”
With new home prices dropping in $100,000 increments and lawsuits flying left and right from recent new home buyers trying to break out of purchase contracts, how can anyone be foolish enough to buy now without damaged psychology?
“‘To be clear, no one is getting bailed out,’ said a statement by John Taylor, president of the National Community Reinvestment Coalition. ‘Borrowers will repay their loans, but at interest rates and with fees that are fair and reasonable.’”
I call BS on this statement. If the buyers purchased their homes with full disclosure of the interest rates on their mortgage contracts, then they have no right to retroactively reduce their contractual obligations because home prices did not go up by as much as they anticipated. Although my knowledge of contract law is nearly nonexistent, this sounds illegal to me.
In a mobocracy nothing is illegal if you can rally a noisy mob to support it. That seems to be what we’re becoming.
Bingo. Recognizing this makes me sick to my stomach.
they’re not really getting a bailout
a new name will be a applied,but rich,foolish savers will be punished
You must have REALLY enjoyed the “kelo” decision then!
Democracies fall when the majority realize they can vote themselves benefits that others will have to pay for.
Would this plan even matter much? I mean what percentage of these borrowers would actually qualify for these new “fair and reasonable” terms? Also, if they don’t qualify, then that should be the end of it. Hand the keys back and find an apartment. But probably someone’s already concocting a backup bail out plan.
The fundamental issue of housing unaffordability isn’t even being given a passing mention, let alone fully addressed, in these foccacta bailout measures.
Was anyone talking about bailing out citizens such as yourself who couldn’t afford to purchase appropriate housing for your small family, even though you have stable income and a solid work history?
Yeah, how about a bailout for the financially-responsible who are priced out of a home by 8-dollar-an-hour-strawberry-pickers? I like that one.
Even if they qualify few will take the “deal”.
Would you ELECT to pay a $300,000 note down on an asset worth $200,000 (or less)?
Maybe some will retain the stupidity they had going into these transactions and swallow the obvious loss. However, I’ll bet that those who got in because they were driven by greed will summon that same emotion to “bolster” them as they walk away from any “bailout” offers.
It won’t work because it makes no sense to virtually everyone caught in this fiasco.
Never underestimate the stupidity of our fellow man. After all, these are the same sheeple who bought a $750k sh!tbox in the central valley of CA thinking it would appreciate from there. These people are absolute imbeciles.
“These people are absolute imbeciles.”
What does that say about the lenders who handed them the money, or the investors who bought the subprime MBS which bundled in the imbecilic loans?
They, too, were counting on a bailout if it turned sour.
“What does that say about the lenders who handed them the money, or the investors who bought the subprime MBS which bundled in the imbecilic loans?”
Not a lot, that’s for certain.
I think they are just offering lower (fixed) interest refis to underwater borrowers. It is perfectly legal to refinance a loan… however (1) if there is a prepayment penalty, who will pay it and (2) will they be willing to lend more than the (newly) appraised value of the house.
I suspect that when the market REALLY tanks, next year or so, workouts will be fairly common. Foreclosures are expensive and time consuming legal PITAs. If the price is the same as what the note holder could get after foreclosure, approving a short sale makes sense. The lender loses principal, but it’s a more efficient process. It’s not too difficult to go from that to abandoning the attempt to sell the house to somebody else and agreeing to let the borrower refinance with lower principal.
As Tanta at Calculated Risk has pointed out however, holders of bonds based upon different tranches of a pool of mortgages may well have different intrests in workouts, depending on securitization and other factors. This sort of stuff may well be complicated enough that nobody is able to work it out efficienty.
Housing affordability and the slowly leaking bubble is becoming a problem in many western countries.
Here’s an article in the New Zealand Herald that even has a link to this blog.
It’s talking about checking out this blog to see what’s going to come their way.
I think California is about 12 -18 mths ahead of NZ in the realty bubble.
NEW is (and in truth, always was) nothing because its business model was GIVING (not lending) money to people who had no hope of paying it back, and their security interest was woefully inadequate to cover the loans.
20% down is not some magic number, it exists because lenders have learned over time that foreclosure combined with declining value is expensive, usually about 20% off the top.
They had great profit margins because they didn’t spend money on things like verifying borrower income or assets or verifying appraisals.
And by my almanac, it’s not even low tide yet.
since the hombuilders are starting to lose money, is anyone gauging their burn rate, a la the high-flying dotcom bust? last I remember, these companies were using excess cash to buy back their stock and some only had a hundred million or so in the bank.
Calling Mortgage Lender Implode-O-Meter………your services are needed immediately. Aaron Krowne, are you able to provide us with a Home-Implode-A-Builder Meter?
I am very interested in this as well. I am surprised by their staying power thus far, considering the mountains of completed homes sitting vacant.
I was at Rosen’s RE conference a couple of years ago in SF where a gentleman from Whitehall spoke (along with a guy from CalPers, etc.). The applicable phrase he used with respect to their investment strategy? “Patiently wait for distress.” It’s not IF there will be distress, but WHEN, in my opinion.
Patience. Patience. Internal cash will be expended, and external liquidity will dry up for some of these homebuilders.
‘Borrowers will repay their loans, but at interest rates and with fees that are fair and reasonable.’
Like the 2% they could afford given inflated house prices and their actual incomes? Let’s see, factoring in administrative cost and likely losses due to foreclosures for normal reasons (job loss, divorce, health problem), that would provide the bond investor with an annual return of negative 4%! Anyone interested?
Perhaps the existing bond holders are, given that as it stands they’ll be taking that entire haircut in year one!
Centex is advertising heavily to move units in an Atascadero subdivision that redefined the term “overbuilt” for a small, specific area. Their timing was off by a full two years, if not three.
But while they have lowered prices some, they’re still going to the subprime trough to create some action. They are offering a new townhome for $1929 a month, 0% down, with a minimum 620 FICO. Fine print says that this doesn’t include prop tax, HOA, or PMI. 10 years interest only, then FULLY AMORTIZED for the next 20. I have friends who rent townhomes in SLO for $1500 to $1700 and don’t have to commute. But for the privilege of being able to paint your rooms purple if you want to (their current ad campaign), you’ll pay an extra grand a month to “own” something that is just going to keep sliding down in value.
“But for the privilege of being able to paint your rooms purple if you want to (their current ad campaign), you’ll pay an extra grand a month to “own” something that is just going to keep sliding down in value. ”
Do you have a phone number I can call?
How funny is that…at this point landlords desperate for tenants will probably allow them to install a helipad on the front lawn.
purple rooms…so Spring Bounce 2007-ish *sniff*
“But for the privilege of being able to paint your rooms purple if you want to (their current ad campaign), you’ll pay an extra grand a month to “own” something that is just going to keep sliding down in value.”
I can paint my walls purple in a rental if I want to, why would I buy to do that?
Having the freedom to paint the walls any color you liked was one of the top “reasons to buy a home ” touted by realtors during the runup. Especially when prices stripped off so far from fundamentals. When it became impossible to justify buying for REAL (financial) reasons, they had to make stuff up.
The fact that people fell for this line is, sad to say, proof of how doltish tand brain dead they really were throughout this manic episode.
I’ve never rented a place where I couldn’t paint the walls. And when I was a landlord I never gave a sh#t whether people painted the walls. Hello!! It’s PAINT!!! By it’s very nature it can be covered and repainted again and again.
Insert psychology quote here:
“Education is what survives when what has been learned has been forgotten.”
B.F. Skinner
“Also Thursday, the Federal Reserve said it will hold a public hearing June 14 to consider adopting new rules to combat abusive lending, especially in the subprime market.”
“‘The goal is to find ways to promote sustainable homeownership through responsible lending, informed consumer choice, and effective guidance and regulation,’ said Fed Gov. Randall S. Kroszner in a statement. The Fed has authority to issue regulations that cover all lenders, not just banks.”
A Little late @$$%&$#!
Wrote a few letters to these fed govs. back in latter part of 2005 early part of 2006 to come out of their ivory towers and look what they have done. I asked him to stop these toxic loans that corruption was widepstread and standards were a joke. Clamp down. NOTHING!Especially that money churner greenspan. This guy will go down in history as the person that did the most damage to our countries financial health.
Greenspan: The worst Fed chief ever
$300 Million to provide “counselling” to FBs (call your senators and tell them we are talking about adults here, why does 300M of our hard earned money have to go to hold these peoples’ hands as they face foreclosure, let them contact their lenders themselves or call a private credit counselling office themselves, for heavens sake):
\
Congress urged to set guidelines for sub-prime mortgages
Sen. Charles E. Schumer (D-N.Y.) says, “The sub-prime mortgage market has been the Wild West of the mortgage industry for far too long.”
By Jonathan Peterson, Times Staff Writer
11:25 AM PDT, May 3, 2007
WASHINGTON — In a bid to stop a wave of foreclosures, Sen. Charles E. Schumer (D-N.Y.) today urged Congress to approve $300 million for counseling and outreach efforts to help beleaguered borrowers hold onto their homes through refinancing deals and other financial strategies that would require cooperation from private lenders.
Schumer’s new legislation also would hold mortgage brokers and independent, non-bank lenders such as Ameriquest Mortgage Co. legally responsible for making fair loans that borrowers understand and can afford.
“The sub-prime mortgage market has been the Wild West of the mortgage industry for far too long,” the New York Democrat said today, referring to high-cost loans aimed at people with weak credit. Such loans have been failing at a rapid rate, prompting jitters throughout the mortgage industry and adding instability to Wall Street. “Our proposal brings the sheriff back in town.”
Under the plan, nonprofit community organizations that specialize in housing concerns would use the federal money to locate troubled borrowers and lead them toward potential relief, such as more affordable loans achieved through refinancing or cheaper new loans — if lenders provide them.
Schumer estimated that the $300 million might help 300,000 individuals stave off foreclosure. Joined by Sens. Sherrod Brown (D-Ohio) and Bob Casey (D-Pa.), he urged that private lenders match each tax dollar with $2 more, creating a “foreclosure prevention fund” that ultimately could save 900,000 homes from foreclosure.
Beleaguered borrowers are often afraid to contact lenders or respond to their inquiries, according to experts. Some 2 million borrowers may face the risk of foreclosure over the next two years, by some estimates, as their loan payments soar once the preliminary, teaser rates expire.
In California, there were 11,033 foreclosures during the first three months of 2007, an 800% increase over the previous year.
“Congress must act to provide necessary protections for consumers,” Brown told reporters. “This legislation is a necessary first step.”
Representatives of community organizations that might dispense the money also stood with the senators.
The prospects for Schumer’s bill were not clear. The approach stands in contrast to that of Sen. Christopher Dodd (D-Conn.), chairman of the banking committee, who so far has steered clear of using any taxpayer dollars and instead has focused on prodding regulators and private lenders to make sure that loans are fair and affordable.
The notion of a taxpayer bailout would be highly controversial, and many politicians are wary of having government come to the rescue of borrowers who took out voluntary loans. Community activists, however, maintain that many borrowers were deceived about the costs they were incurring.
“To be clear, no one is getting bailed out,” said a statement by John Taylor, president of the National Community Reinvestment Coalition. “Borrowers will repay their loans, but at interest rates and with fees that are fair and reasonable.”
Shumer loves the plan that spends the most money for the fewest results.
How on earth can counceling people help once they’re already in a loan they can’t afford?
The politicians sat on their a$$es for about a decade watching this unfold and did absolutely zip about it.
If they’d had one live brain cell in their heads, and I assume they did, then they knew that there constituents did NOT have the money to pay for these homes. They all must have at least a rough idea of the median incomes for the areas they represent. So they knew the home prices were bogus and people were in way over their heads. They chose to do ….NOTHING.
The fact that they are suddenly jumping in now feigning alarm makes me suspect, really suspect of their judgement in all things. This problem was too obvious to miss. How did they rectify median incomes with median home prices in their districts? How are they doing it now with all these new FHA proposals, etc? They have to know the problem’s the price, stupid.
“Shumer loves the plan that spends the most money for the fewest results.”
Makes sense. That would leave a bigger residual for his future campaign contributions from REIC constituents on whom the money was spent.
“‘The goal is to find ways to promote sustainable homeownership through responsible lending, informed consumer choice, and effective guidance and regulation,’ said Fed Gov. Randall S. Kroszner in a statement.”
Problem No. 1 which stands in the way of this laudable objective: Prices will have to correct by 50% downward from peak levels to realign prices with incomes in local markets formerly known as ‘a bit frothy.’
“The Fed has authority to issue regulations that cover all lenders, not just banks.”
Does this imply the Fed was negligent in cases where subprime lenders ran amok with crazy lending and then promptly went out of business?
“laudable objective” for government to promote homeownership at all cost? I think the government should stay out of people’s lives. The government shouldn’t be in the business of promoting anything, other than their irrelevance. Yes, I’m a Libertarian.
I do not mind the government getting involved in certain things. But they should absolutely get out of the home buying business. That is complete nonsense and not in any way shape or form “laudable”.
When it comes to the business of Real Estate, the government is more dangerous, damaging and skanky than even the NAR.
Is there any organization out there that can push to get the gov. out of RE? There are so MANY that push to get the gov. into RE. Wouldn’t it be nice to have some balance in this?
Of course, providing “affordable” housing by stealing from one group of taxpayers, then subsidizing the inflated prices paid by another group, is far preferable than have prices actually correct and be truly affordable to more buyers without any government handouts…in the eyes of a power hungry government bureaucreat or politician, that is.
“Does this imply the Fed was negligent when lenders ran amok…..?” LOL. Wouldn’t it be awesome to see a bunch of lawyers take the Fed governors to court for negligence?
Is that even remotely possible? Anyone know? It’d just be fun to watch.
“The proposal would force brokers and originators to assess a borrower’s ability to repay a loan before taking one out…
Kind of shocking that this sort of thing needs to be put into legislation, isn’t it?
Um, I have a question. In the LA Times (link above) the article deals with a proposed sub-prime bail outs for fb’s. The gist being that government (oh,boy! That’s BAD news.) would put up $300 million.
A spokesman said later in the article that these loans will have to be repaid by the fb’s. Well, I don’t want to throw cold water on yet another idiotic tax payer waste of money by yet another idiotic politician (in this case Dem. Chuck Schumer), but when these fb’s default (yet again!) on the loans they are given - who gets the now devalued property? The government? The banks? I know who pays. We The Tax Payer - but does Schumer’s plan mean the US government is now getting into the private property owning business? Oh, well - No problem. Just print more money. The world is knee deep in confetti dollars anyway. Might just as well print up another trillion $. I’m still waiting for some to ask a politician, “Where have you been for the last 5 years while these mortgage scams were going on?” Everyone and his brother knew what was going on including the majority of the now fb’s but they were blinded by GREED. Everyone and his brother except our great and wise politicians it seems.
I liked him better when he hung out with Carol Burnett…
“‘A severe correction in the RMBS market offset an otherwise strong quarter for our core lending franchise,’ said CEO Tim Conway.”
At least he’s still doing comedy.
Doesn’t strike me as being very pfotful…
“Kurt Pfotenhauer, senior vice president for government affairs at the Mortgage Bankers Association, called Dodd’s approach ‘responsible, thoughtful and forceful.’ A taxpayer-financed bailout plan doesn’t make sense, he said, because ‘the mortgage finance industry is already stepping up to help those borrowers.’”
We just get an industry funded legislature instead?
CNBC just asked for viewer opinions on “Is the market meltdown just based on hype?” Is talking about it, causing it.
Here is my response:
Was the stock crash of 2001 about hype, or fundamentals. Answer, proftis do matter after all.
House prices also have support levels including cost of construction, cost of rent, and affordability.
They got above the cost of rent, on the assumption prices would continue to rise. As with “cost to earnings growth” ratios being an indicator of future profitability… WRONG.
They got above the affordability level, only through $0 down and crazy lending which did not take into account people’s ability to pay it back.
They got above cost of construction, which is why there are so many projects under construction. The builders have to complete those provects and sell for whatever they can get, in an attempt to recover their sunk costs of land and infrastructure. Build or die.
Like the stock market of 2001, it was only held up by fools putting too much money into the system, and those fools are now taking massive losses, so unlikely to repeat.
This is not a hype based pop. Hype is not causing the mass foreclosures. Hype did not take 1/3rd of buyers out of the market with the sub-prime implosion.
Hype caused the bubble. The reality of the fundamentals is bringing down the house of cards.
To suggest it is hype is really disengenuous.
Here is her article on it…
http://www.cnbc.com/id/18491813
“How did it happen so fast?
Now I get it. Media hype. Yup, it’s all about me. You see, I keep getting up on TV and telling people all about these numbers, these numbers from mortgage bankers and realtors and home builders, and they’re not very encouraging.”
“I certainly wouldn’t want anyone to feel badly about the housing market, because that might make them stay home and count their money instead of gambling it on a no-money down, 6-month-adjustable rate-negative amortization-no-doc loan with a teaser rate on a million dollar home.”
BOOM.
A reporter telling it like it IS!!!!
Blaming the media for anything is a sure sign that the person has already lost all credibility.
Thanks for that link, Darrell.
“To be clear, no one is getting bailed out,” said a statement by John Taylor, president of the National Community Reinvestment Coalition. “Borrowers will repay their loans, but at interest rates and with fees that are fair and reasonable.”
Hey stupid F_ _ _. when you make $14,000 a year or $22,000 or $30,000 does not allow you to buy an inflated $720,000 house.
These freaks were the ones that pushed these house prices to the stratosphere. send these debt zombies to homeless shelters where they belong. I’ll make a donation.
He’s half correct.
No one is getting bailed out by these Mod Squad response teams out looking to help poeple make their payments.
The banks are not bailing out the borrowers. They are locking those borrowers into overpriced prisons for as long as possible.
As mentioned on CNBC today, 40% of these restructured loans are still going into defalt…. Ummm… Yeah. It doesn’t take long for the over extended fool to realize that even after the restructure, they are still paying 3x as much for their mortgage as they could pay for rent on the same house. The restructure let’s them live a few more months rent free.
Subprime is the new “slam dunk”
Go warriors
CIA head George Tenet forever gave “Slam Dunk” a bad name. Now it’s synomomous with craven moral cowardice by a political dilittante.
‘Most of the builders are operating on very thin margins right now, as soon as they drop the price a little bit, they start losing money.’
This is what I don’t understand. Ten years ago they were selling houses for 30-40% of their current value and I believe they were making money on them. When housing prices went up 200% how did the margins remain slim?
I understand the land prices skyrocketed as well as did materials and labor. But I still can’t believe the margins were thin? Also, it’s been reported that all three of these are in decline. Will we be able to get back to historical prices and still have enough margins for the builders?
” Ten years ago they were selling houses for 30-40% of their current value and I believe they were making money on them. When housing prices went up 200% how did the margins remain slim?”
They paid too much for land, what they bought and what they put deposits on but now don’t want. They paid too much for infrastructure. They are being forced to add all kinds of extras and give all kinds of concessions.
In short, when the house was 40% less, they didn’t have to throw in graninte counters, stainless-steal appliances, jetted soaker tub, a negative edge pool, and $20K of landscaping and closing costs.
lol @ Darrell…”stainless STEAL appliances”
Yes, they DID steal them, along with the rest of the house!
Its BS, that’s what it is. They’ve run out of options to pimp out the shitbox (’We’ve got marble in every kitchen, bathroom AND on top of your bed!’), so this is the last dying gasp of homebuilder PR spin to avoid serious price cuts. “We just can’t cut prices, you see, out margins are razor thin…” Oh yeah? Show me the books, Bob.
I shouldn’t be so harsh, because I’ve said before and I still maintain that the builders are friends to us bubble-sittes. They are going to build this market right back down to reality and further. Unlike flippers and emotionally attached homeowners, they know to sell they have to price at market. If they don’t sell, they don’t eat. Any market needs market-makers, and the builders make the market.
“Kathleen Allen, a regional operations manager who is being let go after 11 years with the lender, said she held out hope that part of the company could be salvaged until yesterday’s call. ‘It’s hard to understand how we were number two in the nation and now we are nothing,’ Allen said.”
Let me clarify it for you, Kathleen. When your business model is based on making 100% loans [or more] to people with a demonstrated inability/disinclination to competently manage their financial affairs, so they can take on reckless levels of debt to “buy” overpriced houses they can’t afford at the peak of a bubble, typically falsifying their loan applications with the complicity of realtors, mortage brokers, and appraisers, it’s a good bet that “nothingness” is in your future. The fact that you, a regional manager, failed to grasp the fundamental unsoundness of your lending practices, speaks volumes about the level of cluelessness in the “leadership” of this company. You and New Century are reaping the just rewards of building on foundations of sand.
Holy smokes - talk about clueless! I had a talk with a retired nurse today, she has rentals in BFE and even SHE knew about the mess w/ all this, and she’s not even on the internet, just MSM. And word from my engineer friend in the Aspen area says it’s all the talk around the Roaring Fork Valley among the realtors and people in the biz.
test
“Economist Christopher Thornberg said the credit rating agencies should have been far more skeptical. ‘These things should have been rated as risky a long time ago,’ he said.”
How could the Wall Street scam masters have kept selling those things if they had been rated as risky a long time ago? The name of the game these days is for ratings agencies to keep saying it’s all good until very close to the day when the company in question burns to the ground and the ashes scatter to the wind. That is 21st Century accounting at in all of its terrible deception.