… when, in truth, maybe we shouldn’t have been. HW readers might recall our earlier coverage of MGIC’s earnings call for Q2 in which the company all but admitted that 2008 vintage mortgage loans are performing like those from 2007. Which is to say, junk.
A deconstruction of an Orange County Register story this morning by Tanta at Calculated Risk shows, in no small part, why this is: this is an industry has yet to clean up its act. Even after the battering ram we’ve run into.
Read all of her post — it’s worth it. And it provides at least some anecdotal evidence why insurers like MGIC are still facing problems on their book of business.
Highlights:
And if you were, like most people, working on the assumption that lenders and other industry participants had... more»
Ever wondered what becomes of the in-need families that get a new home free and clear as part of the hit television series “Extreme Makeover: Home Edition”? Wonder no more, at least in one family’s case:
More than 1,800 people showed up to help ABC’s “Extreme Makeover” team demolish a family’s decrepit home and replace it with a sparkling, four-bedroom mini-mansion in 2005.
Three years later, the reality TV show’s most ambitious project at the time has become the latest victim of the foreclosure crisis.
After the Harper family used the two-story home as collateral for a $450,000 loan, it’s set to go to auction on the steps of the Clayton County Courthouse Aug. 5.
So the happy new homeowners — free from a mortgage — used the home... more»
We were thinking of covering rising non-performing assets at Birmingham, Ala.-based Superior Bancorp, who saw its NPAs rise well ahead of loss reserves during the second quarter. The bank saw its allowance for loan losses fall to just 69 percent of total nonperforming loans, down from 160 percent coverage one year earlier and 90 percent to start the year.
But then we saw that the bank was blaming the media for a resulting drop in Q2 earnings:
The entire banking industry is operating in an adverse environment relative to maximizing short-term performance. Factors such as the challenging credit cycle, housing softness, gloomy media coverage, weakened consumer confidence and dramatic Federal Reserve rate reductions are causing a stiff headwind in 2008. [emphasis added]
We don’t make investment... more»
When — if? — the U.S. private-party securitization market fires back up, RMBS deals are going to face a more stringent — realistic? — set of criteria from at least one rating agency; Fitch Ratings on Thursday unveiled a series of enhancements to its U.S. residential mortgage loss model, known as ResiLogic.
The latest revisions to the model will impact Fitch’s expected loss assumptions and credit enhancement levels for RMBS, the company said; what’s perhaps most surprising about the update, however, is that it suggests just how rudimentary some of the ratings process really has been.
For example, among the changes in ResiLogic 2.0 are the introduction of MSA and national macroeconomic risk multipliers, which will allow the model to fine-tune its estimates... more»
A woman in Massachusetts faxed a note to her lender at 2:30pm — 3 hours before her house was scheduled to be auctioned off in foreclosure — informing them that she intended to kill herself. And she followed through on her threat, right before interested buyers began showing up to bid on the property, too.
From the Associated Press:
A Taunton woman fatally shot herself soon after faxing a letter to her mortgage company saying that by the time they foreclosed on her house that day, she would be dead. The police said the woman, Carlene Balderrama, shot herself Tuesday, after faxing the letter at 2:30 p.m. The mortgage company called the police, who found Ms. Balderrama’s body at 3:30 p.m. The auction was scheduled to start at 5 p.m. and interested buyers arrived at the property in... more»
Bloomberg’s Money & Politics featured HW’s Richard Bitner on a panel discussing Wednesday’s passage of a sweeping housing aid package by the House of Representatives.
Note that he’s sandwiched in as the independent, expert industry voice between a CRL rep and a spokesman from the MBA — exactly what we think has been missing from the debate.
A piece today at Bloomberg co-authored by Bob Ivry marks the financial news outlet’s “come to Jesus” moment with the REO industry, and reading it is certainly amusing for anyone that’s actually spent time working in the space. (BTW, Bob, if you’re ever doing another story on this, we’re here for you on background.)
The crux of the article, however, lies here:
Together, Fannie Mae and Freddie Mac, the two biggest U.S. mortgage finance companies, owned a record $6.9 billion of foreclosed homes on March 31, compared with $8.56 billion held by all 8,500 U.S. commercial banks and savings and loans.
Those outside the industry — and perhaps a good percentage of those inside the industry as well — might miss the real significance here. We know that Fannie... more»
For those that missed it, HW’s Richard Bitner hit it out of the part last night on The Daily Show. Enjoy:
For those interested to know, our very own Richard Bitner will be on The Daily Show tonight, talking about his new book and the housing mess. This is a very big deal, at least for me a publisher, as I don’t think any other real estate publication — trade or otherwise — has seen one of its key people interviewed on national television about the housing mess yet; and it really underscores why Housing Wire began 18 months ago. Most interviewees are so-called “real estate experts” that haven’t spent a day running a banking operation or working at a servicer in their life.
This industry has needed a knowledgeable, credible, and independent voice. Someone with experience who can tell it like it is; which is precisely what I think we’ve been able to establish... more»
Last week, HW managing director Richard Bitner made the media rounds to tout his new book, Confessions of a Subprime Lender. One of the appearances was on none other than Larry King Live, which means we now officially can say that Larry King has uttered the words “Housing Wire dot com.”
Bitner managed to counter the more Pollyanna-ish takes from some of the other panelists, providing at least a dose of much-needed reality. Primary clip:
All panelists were also asked whether they were “optimistic” about housing in the near-term; see the below clip, starting around the 7:14 mark:
For those that follow these sort of things, Richard will be on The Daily Show with Jon Stewart discussing the housing mess on Monday, July 21. (Yes, really.)
And if you haven’t bought... more»
