REwired

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Open commentary on everything impacting the U.S. housing economy. The opinions expressed here represent the author's alone.

On market sentiment and the subprime debacle

Last Friday, the video that kicked off Warren Buffett's annual meeting began making the rounds, starring two British comedians and a pretty hilarious overview of the subprime mess and ensuing credit meltdown. See how how "dodgy debt" transforms into an "investment vehicle." And the discussion of "enhanced leverage" is not to be missed.
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Baseball star walks away from home, mortgage

Jose Canseco, the mercurial baseball star now turned steroid gossip king, has had his house foreclosed on after deciding to walk away from the home. Via the Associated Press: Canseco told the syndicated TV show "Inside Edition" that he walked away from his $2.5 million, 7,300-square foot home in suburban Encino because it didn't make sense to continue making payments ...
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On-balance sheet securitization is so hot right now

We can't help but wonder if our stateside financiers aren't taking note of the hottest new trend in across-the-pond high finance: securitization on the balance sheet. The Financial Times' Gillian Tett notes that an increasing number of lenders are opting to turn their loans into bonds, and are keeping them on their balance sheets to boot:
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Reinvention in the reverse mortgage market

We've heard stories that more than a few former wholesale and correspondent originators have decided to dip their toes into reverse mortgages, thanks to the utter and complete failure of much of the former mortgage lending industry. We've also heard from some reverse mortgage experts, that more than a few of these attempts fail -- the differences between origination reverses and traditional "forward" mortgages, we're told, is often just too great.
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Predatory borrowing, and recidivism

We're probably not going to make a lot of friends on the consumer side with this, but more than a few analysts have asked us here at HW when we're going to take up the issue of "predatory borrowing," since the cards have pretty much been dealt on predatory servicing and predatory lending. How about now?
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Across the pond, they're raising money too

MarketWatch covers the trials and trevails of HBOS, the UK's largest mortgage lender: HBOS ... said Tuesday that it plans to raise 4 billion pounds ($7.95 billion) through the sale of stock to existing shareholders as it battles against rising write-downs and tighter lending margins.
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Taking Bernanke to task

The editors at the Wall Street Journal let their hair down over the weekend and probably had a bit too much absinthe, to boot. That's the only explanation we can think of to explain the Times New Roman-text lashing thrown in the general direction of Ben Bernanke and the Federal Reserve. The lede:
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Hot now: stocks? Really?

The WaPo ran an interesting column this past week, suggesting that as housing quickly falls out of favor with investors, many are running headlong back into equities. Which may or may not explain some of the irrational movement we've seen in major stock indexes to start this year. From the story:
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