Countrywide wants up-front payments to discuss some loan mods? So what?

Last week’s Investor’s Business Daily painted a pretty rough picture of everyone’s favorite industry whipping post Countrywide Financial Corp., after getting wind of a servicing policy that requires some delinquent borrowers to pay 30 percent of arrearages before the lender will begin discussing loan modification options — fees that the reporter, Kathleen Doler, called “a steep entrance fee.” From the story, an indictment: They said Countrywide is requiring homeowners to pay 30% of the amount they are in arrears on payments, plus 30% of accrued late fees and 30% of attorney fees already incurred in the foreclosure process. The payment doesn’t guarantee a loan modification, they said. It is only the price some consumers must pay to begin discussions... more»


Investors and Insurers, Finding Fraud

Here in the BuzzPost, we’ve been sounding the horn over the prevalence of mortgage fraud in recent weeks — witness an earlier discussion of Ambac’s education on the matter — and yesterday’s Wall Street Journal picked up a strong, smelly scent. (You know, the same one that’s already got insurers and investors up in arms?) From the WSJ, a mention of the obvious: Unhappy buyers of subprime mortgages, home-equity loans and other real-estate loans are trying to force banks and mortgage companies to repurchase a growing pile of troubled loans. The pressure is the result of provisions in many loan sales that require lenders to take back loans that default unusually fast or contained mistakes or fraud … Countrywide Financial Corp., the largest mortgage lender... more»


Banks needing capital, and other misleading statistics

Right now, it’s a pretty good idea for investors to get a handle on the balance sheets of key financial institutions — in light of recent bank failures, and a looming spate of further failures ahead, grappling with capital adequacy and even the direction of future earnings is a key question. Philip van Doorn at TheStreet.com takes a swing at identifying the ten largest banks and ten smallest banks in need of capital, like right now. Some of the obvious suspects are on the list, like Fremont General Corp., but there are others he identifies. van Doorn makes a good attempt, but we think he’s focusing on a measure isn’t as forward looking as it could be — his list ranks banks using the total risk-based capital ratio. A good stat in theory, but it rolls up capital... more»


Whither thou, credit crunch?

Wear-out isn’t just a concept for media and advertising planners; it also describes the public’s appetite for things like the word “subprime” and “credit crunch.” And after the Fed’s bailout of Bear Stearns — a move that we still think was the right thing to do here at HW — credit concerns eased somewhat, and investors started to breathe easier. Is the worst behind us? Really? Mark Gongloff over at the Wall Street Journal says it’s probably time we buckled up for a longer ride on the roller coaster of a credit crunch that likely has yet to run its course: Throughout the joyless Space Mountain ride of the credit crunch, the brokerage sector has been the kid in the front car who screams first, signaling the dangers ahead. Many investors... more»


A question of life or death

Hammerin’ Hank Paulson may want to see the Office of Thrift Supervision closed, but OTS director John Reich sees the S&L regulator’s role as important as ever. Via the Associated Press: John Reich, director of the federal Office of Thrift Supervision, said Tuesday that his agency should be given broad powers over mortgage bankers and brokers, many of whom operate outside federal regulation. “There needs to be a federal supervisor of the entire mortgage industry,” Reich said at a briefing with reporters. Reich characterized Paulson’s plan to see the OTS absorbed by the Office of the Comptroller of the Currency “counterintuitive and contrary to how we ought to be responding to the current market correction,” the AP reported. Nothing like the threat... more»


Happy, shiny real estate news

Want to pretend the bad news is a figment of media creation? For those who want to keep their heads firmly planted in the sand, at least one broker information source isn’t hiding its agenda — it will only cover good news about the real estate market. The site, http://www.happyREnews.com, was launched by a company that provides market data for brokers and agents nationwide. That company, IMS Incorporated, obviously is pandering to the RE agent and broker community that it sells its data to; although we’d suggest that the best brokers and agents would rather know what the latest Case-Shiller index has to say about the health of most key real estate markets. A scan of the site finds that there’s very little in the way of news on the site itself, which we’ll take... more»


Where will housing prices go next?

The biggest question on the minds of investors and industry participants isn’t exactly hard to divine right about now: where will housing price go? Have we reached a bottom? The reason is equally easy to discern, given the importance housing prices will have in determining where both the primary and secondary mortgage markets go over the course of the next few quarters. Historically low interest rates matter little so long as prices are declining, whether in nominal or real terms — something that we think most mortgage brokers and bankers now understand, even if they didn’t want to believe it a few months back. Which makes some analysis appearing this morning at the Calculated Risk blog worth noting: prices appear to have a ways to go before even nominal prices reach a trough.... more»


Can’t sell your house? Raffle it off!

Obviously, the mortgage and housing slump isn’t something confined just to the United States — the global effects of losses that started here have contributed to a global housing slowdown, as mortgage lenders have tightened their belts even outside of our borders. Australia, the UK, and Spain; all are seeing some semblance of housing problems, for varying reasons. But leave it to a Spaniard to come up with the most intruiguing idea for getting out from under a mortgage he can’t afford: a raffle. Via Reuters: Miguel Marina said he hopes to be able to pay off his mortgage, worth 80 percent of the value of his property, by selling 64,000 tickets at 5 euros each, promising his home as the single prize to the winner of a draw. His website, elpisodeloscincoeuros.com, which means... more»


Buy New! Buy Now!

Are we the only ones that think this is pretty funny? We can’t be.  Read More →


It’s like switching professors, but with real money

News from Friday’s Wall Street Journal is providing more of a harsh light on common practices at many rating agencies — in particular, that agencies often switched out analysts when bond issuers asked. Obviously, given the hot water Moody’s finds itself in right now, this is the sort of thing that will tend to put the defenses up: “Wall Street is not switching our analysts,” a Moody’s spokesman says. “Moody’s makes decisions based on the best interest of the rating.” “We’re a service business,” says John Bonfiglio, group managing director of structured finance at Fitch. When faced with the decision of keeping an unpopular analyst or bringing in a new one, “we’ve done both,” but not more than once or twice... more»


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2008 Sep 10 -- 2008 Sep 12

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