What’s the average increase though?

… but they had their hands deep in the cookie jar in this sub-prime business. They were one of the largest institutions encouraging people to take on irresponsible/potentially-life-damaging debt.

For that, let them suffer the same fate as the rest of the large debt peddlers.

It was a radical mortgage move at the time, and these loans were made for their own portfolio. They correctly saw the huge inflation surge that was in the future, and the step rate loan was great.
My salary was escalating at the time, as were all things priced in dollars.

They got me into a home, and I stayed with it, paying it off early. They were a neat bank, with a lot of bright people working there.
They still have cool people, just the senior management has a severe case of Napoleonitis. Or maybe just the current ‘eat or be eaten’ environment.. Whatever it is, it’s something that has nothing to do with good business.

(3) Capitalized interest recognized in earnings that resulted from negative amortization within the Option ARM portfolio totaled $345 million, $344 million and $296 million for the three months ended September 30, 2007, June 30, 2007 and September 30, 2006.

When you pay the minimum on your pay-option kamikaze loan, the delta gets tacked on to your balance, and WaMu counts it as GAAP income! They rang up over $1B of this fake revenue last year, and look like they’re on a pace to challenge $1.5B this year.

Of course, they will never see a fraction of this as real income. The vast majority of the option-ARMs are toast, and so is WaMu! LOLOLOL

Got puts? I do. Yay. Die die die evil WaMu!!!

Oh wait. I think I hear someone talking to Ralph in the other room. :-)

Only fools would believe in these sensationalist stories.

http://www.facorelogic.com/

In terms of the mortgage data you’re looking for, you ought to consider pricing out a subscription to one of the products offered by Firstam CoreLogic. They have so many databases available now, I can’t begin to guess which one is the best, but if you call and explain the historical data you need, they’ll tell you the name of the product. I think it’s Market trac, but I’m not 100% sure. They use to sell this as a monthly CDRom product, but it was pretty expensive; something like $500/month. Now many of their database search features are available online and the monthly fee is much lower.

The cheap way to get the historical data is to become friends with a customer service representative at any title insurance company.

They have what you’re looking for on a database called Metroscan. There’s about 500 different ways to search the data including loan type and it goes back to the early 1990s.

I’m sitting in a coffeehouse, and next to me is a pair of Real Estate “Professionals”, sinking their teeth into a young, naive couple.

Right now, Mr. Too-Tan-Professional is laying out a line of UTTER BULL"chocolate" to these poor people, explaining how the “number of sub-prime loans in the state of Washington is the lowest in the nation…” and Mrs. Mary-Kay-Professional is nodding sincerely, and stating that she would be “shocked” (SHOCKED!) if prices were to drop in Seattle….

…and oh dear god….now Mrs. Mary-Kay is talking about how this lucky couple will be able to get stainless steel appliances and bamboo floors, because of the “surprising” number of available units….

Ugh. Real estate agents are worse than used-car salesmen. I’m going to try to slip this couple the seattlebubble.com URL….

Don’t kid yourself. We haven’t seen any evidence yet that current lending standards are well represented by modeling 20% down 30 year fixed purchases.

If you use 20% down, you’d also need to take into account how difficult it is for the average buyer to cobble together $100K in after tax income. On a median income this could take 3-5 years minimum. Most never could.

I think it was a California based organization that late in the bubble changed their affordability index from the 20% 30yr fixed to a 80/15/5 where the primary was a 5/1 arm and a 15% piggyback w/ 5% down because the number was so low as to be meaningless.

It’s not an easy thing to model, especially when you take into account that people were artificially decreasing their effective monthly payment by using equity to pay interest.

The term “affordability” is also begining to be used as a cover for “I can’t get something for nothing,” and make quick, easy, money on appreciating liquid equity that I cash out ATM on. That was/is the mentailty of the reptilian brain…

Not saying that is the case here, but I sense that in the tone elsewhere.

You’d probably need access to a huge database of mortgages similar to the one Wall Street Journal used for their spiffy maps. Doubt you’d be able to get ahold of that without some major cash outlay.

… and a 20% down payment is also assumed according to various sources.

However, I’m liking the idea of creating another graph, let’s call it “Imaginary Affordability.” I just need to figure out exactly how all the risky loans worked, and determine the ratio between income and loan size that was possible.

The difficult thing then is to figure out the timeline of when such loans came into existence, and when they disappeared.

Anybody got any ideas on where I could go to find such information?

a WHAI being defined as HAI / Loan Factor

Loan Factor = fraction of new mortgages that are traditional 30 yr fixed + cash down

if only traditional loans exist, the HAI = WHAI. if 10% of loans are traditional, WHAI = 10*HAI

something like this would be illuminating

Seeing as the rapid appreciation was kicked off due to a loosening of credit standards, thus getting buyers into market that should have never been, that would make sense.

http://www.diggersrealm.com/mt/archives/002512.html

Let’s not Alienate ourselves from Washington Mutual.

But is this bank a complete moron?

Median Family Income – Derived from income data from the Census Bureau Decennial Survey.
.
Qualifying Income – Income necessary to qualify for a loan for the median priced home.

the disappearance of exotic loans and re-emergence of cash down-payments means houses are drastically less affordable, given the sames prices and interest rates.

i mean, six months ago, i could “buy” a $400k house with no money down and at a 2% intro rate for $Xs/month

now, lets say i need at least $40k down and a 6.5% fixed rate for $2X.

wouldn’t that suggest that affordability has dropped by much more than 50%?

In reality, the affordability for a low payment seeking buyer improved all through 2005, 2006 and 2007 untill hitting a massive wall as subprime,100+% financing and low teaser rate loans became difficult to qualify for.

Just looking at the affordability index, one could conclude “sure, things are a little tighter than they were 1 year ago” but that hardly explains why so many people have decided not to buy homes this fall.

Cramer on WaMu

Tim. Stop being such a negative Nellie. You do realize that slowing sales are a result of your comments, right?

e*trade says:

“A lot of people think that subprime loans is where the problems center,” he said. “But that’s not our problem. Our issue is that the value of high-quality loans is underperforming.”

http://www.tiny.cc/notjustsubprime

seriously, though. calling it subprime implies that our problems are caused by a few buyers with poor credit. in fact, it was caused by an entire industry and mentality

I think the WaMu executives were hitting the nail on the head as to what is causing the real-estate downturn: the tightening of credit. The credit contraction is (and will continue to be) the single biggest factor in breaking the back of the Puget Sound real-estate market.