The Mortgage Lender Implode-O-Meter

[goofer]

My playing days go back to the early 70's before the first oil embargo imposed by King Faisal. What I have learned is that 1) we ALWAYS muddle through no matter what the disaster dejour 2) it has always paid to be a buyer on these perceived "the end is near" scenarios. I see no reason to change my playbook now. BTW, Shelly...that "straw hat must be made of gold" since my theory proved very prescient last August regarding JOE and the other housing stocks I bought.

 

[SHELLY]

BTW, Shelly...that "straw hat must be made of gold" since my theory proved very prescient last August regarding JOE and the other housing stocks I bought.

When did you sell?

 

[goofer]

SHELLY, if you go back and read my posts , you will see that info. btw, still long a few shares of JOE. did sell march 60's at 3 on this week's run up. also remember my pm to you on energy stocks ( cvx ). that was up 20% in a short time. ;-)

 

[redfisher]

I'm still betting that the next rate move (if there is one) will be up. The US needs all the help it can get in attracting much needed capital to keep paying off the interest on its debt.



What debt? You know Clinton had a surplus...

http://www.marketwatch.com/news/sto...x?guid={A5547C6E-A23F-40A0-9EDA-445386E50184}




Moreover, the Fed will want to distance itself from the "easy, exotic money machine" it created that made homeOWERS out of the masses


In your opinion, should the masses not owe/own homes? Why did the FED make money easy?


(Greenspan started the trainwreck when he touted ARMs vs Fixed as the 'way to go' just a few months before he started jacking up the rates. )


Are you suggesting he's @ fault for an individual's decisions?...


. If Ben and Co. see the need to lower the rates, the U.S. will be in seriously deep do-do.

Why?

 

[SHELLY]

What debt?

Are you suggesting he's @ fault for an individual's decisions?...

I suspect when Greenspan made his remarks, that were hailed by the mortgage/banking/RE industry as manna from heaven, he kinda had the idea he would start raising the interest rates pretty soon (and he did). At the time the industry was like hot,glowing grey charcoal brickettes....and Greenspan was the yahoo who squirts a full can of charcoal starter over the top.

As for the sub-prime/exotic mortgage bust....I don't believe for a minute that any banker/economist/mortgage broker with a single working brain cell couldn't see that mess coming (I can easily forgive the 70-year-old granny from Guatemala who got suckered into their schemes.)

If Ben and Co. see the need to lower the rates, the U.S. will be in seriously deep do-do.

Why?

(According to the Government)

Stock market good...........check
Unemployment rate good...check
Inflation OK.....................check
Wages raising..................check
Corporate profits good......check
Consumer sentiment good..check

(According to NAR)

Housing Market Recovering.......check
Mortgage Rates are GREAT!......check
NOW is the BEST time to Buy!...check
[The last statement reminds me of the joke-sign over the bar that reads "Free Beer Tomorrow"]


Why on earth would the Fed consider lowering rates when everything is going along just swell? If they do, they must know of some type of ecomonic problem they haven't been telling us about.


.

 

[SHELLY]

IMO, the poo is going to hit the fan with much more impact than anticipated as a trickle down effect to the hedge funds, derivatives, and every other firm these Banks lent money to who played in the sandbox with them. No. its not news about subprime lending defaults, but what no one really talks about the potential trickle down effect.
I agree Wall Street overreacts, but this time I am taking the back seat, I've played in this sandbox and know what's still buried. ;-)

So is it true that soon people applying for mortgages may actually have to 'prove' they can pay the money back??? I mean, they may have to provide some sort of {real} documentation that they actually have a job and salary--and that the mortgage broker and underwriter may actually 'check' to make sure they're telling the truth???

 

[Mango]

So is it true that soon people applying for mortgages may actually have to 'prove' they can pay the money back??? I mean, they may have to provide some sort of {real} documentation that they actually have a job and salary--and that the mortgage broker and underwriter may actually 'check' to make sure they're telling the truth???

This may surprise you Shelly, but even people with pristine credit whose loans were run through Fannie Mae and Freddie Mac came up as not having to prove income due to good credit scores, job histories, low LTV. But, a verbal verification of employment was done by brokers, AND repeated by the Lenders and guess what? my shop even put paystubs in the file even when they were not needed. Imagine that! :roll:

 

[SHELLY]

my shop even put paystubs in the file even when they were not needed. Imagine that! :roll:

Good for you...that's one-in-a-row!! :clap_1:

 

[bdc63]

Mango - Thanks for your insider insights. I agree with your tip-of-the-iceburg analysis ... and I fear that a titanic sized ship with the words "US Economy" painted on the side is headed right for it.

I am curious what, if any, lending tightening standards that you are seeing outside of the subprime arena. I read on another site that Neg ARMS and No Doc's are gone, regardless of credit score. That doesn't seem to be true, as I still see them advertised. What are you seeing?

I also read a prediction that by year end the only loans available will be 30 year fixed with 20% down to people with high credit scores. If true, that would certainly change the affordablity position of most folks (and may be what brings the "median home" price back within reach of the "median family"). Any thoughts?

(Implode-O-Meter update: 20, or about 2 per week since the first collapse in early DEC)

 

[Babyblue]

Shelly wrote" Why on earth would the Fed consider lowering rates when everything is going along just swell? If they do, they must know of some type of economic problem they haven't been telling us about."


What about the war and the machine to keep our country safe?