Mortgage Woes & Related
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Maybe I am reading this kind of stuff too much, but it sure seems like the "bad" news is accelerating. None of it is unanticipated though....
Defaults on Some `Alt A' Loans Surpass Subprime Ones (Update1)
Defaults on some so-called Alt A mortgages packaged into bonds last year are now outpacing those from subprime loans, according to Citigroup Inc......
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Maybe I am reading this kind of stuff too much, but it sure seems like the "bad" news is accelerating. None of it is unanticipated though....
Defaults on Some `Alt A' Loans Surpass Subprime Ones (Update1)
Defaults on some so-called Alt A mortgages packaged into bonds last year are now outpacing those from subprime loans, according to Citigroup Inc......
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Comments
Statement dripping with sarcasm, BTW. In reference to being called a conspiracy theorist myself here.
Keep up the good postings, no matter what people call you, the public needs to be informed.
Does it mean something when the chief executive of Countrywide Financial says there is trouble in paradise?
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Top Lender Sees Mortgage Woes for 'Good' Risks
Countrywide Financial, the nation's largest mortgage lender, said yesterday that more borrowers with good credit were falling behind on their loans and that the housing market might not begin recovering until 2009 because of a decline in house prices that goes beyond anything experienced in decades......
........Countrywide's stark assessment signaled a critical change in the substance and tenor of how housing executives are publicly describing the market. Just a couple of months ago, some executives were predicting a relatively quick recovery and saying that most home loans would be fine with the exception of those made to borrowers with weak credit who stretched too far financially.
Executives at Countrywide had for some time been more skeptical than others but the bluntness of their comments yesterday surprised many on Wall Street. In a conference call with analysts that lasted three hours, Countrywide's chairman and chief executive, Angelo R. Mozilo, said home prices were falling "almost like never before, with the exception of the Great Depression."......
....What was added to the worries yesterday was the idea that even credit-worthy homeowners would default on mortgages at higher rates as home prices fall — and that even a well-run company like Countrywide could be hit by big losses......
......Countrywide said about 5.4 percent of the home equity loans to customers with good credit that it held an interest in were past due at the end of June, up from 2.2 percent at the end of June 2006. By comparison, more than a fifth of subprime loans were past due at the end of June, up from 13.4 percent a year ago.
"Where you will see prime borrowers have trouble is where they took the riskiest of adjustable-rate mortgages and put nothing down with a first and second combined," Thomas Lawler, a housing economist, said.
Many of Countrywide's home equity loans were second mortgages made to people who were financing the full or nearly full cost of their homes. These loans are particularly risky because when house prices are falling and a home is foreclosed and resold, the holder of the first lien is paid off and often there is little left to apply to the second mortgage.
"Countrywide is highlighting what is an industrywide problem," said Christopher C. Brendler, an analyst with Stifel Nicolaus, an investment firm in St. Louis. A second mortgage "is really an unsecured loan like a credit card."
Countrywide said its customers who are falling behind on payments appear to have lost jobs, had a divorce or fallen ill. Many are living in homes that are no longer worth what they were when the loan was made and cannot refinance because lenders have become stricter.....
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Welcome to subprime lending, post boom.
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Look what Mr. Mozilo and Mr. Sambol have been up to recently.
http://www.secform4.com/insider-trading/25191.htm
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Mozilo wins even if Countrywide profits plummet
Even if Countrywide Financial Corp.'s profit falls sharply in 2007, Chairman Angelo Mozilo still could pocket a maximum incentive of $10 million, thanks to a change in his employment contract that does not require earnings growth.
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