REwired

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

The WSJ finds home equity

We've been sounding the horns on the coming woes tied to home equity loans and lines of credit for awhile now here at HW; and you might have missed that S&P joined that chorus as well, earlier this week. The WSJ picks up on the thread Friday morning, and cautions investors to "take off their rose-colored glasses." From the story:
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What if losing was outlawed altogether?

As we continue to see bail-out after bail-out, and government programs designed to prop up a market in dire need of correcting itself, MarketWatch's David Weider gets to an end-game: why not just outlaw selling stocks at a loss altogether? It's got all the features lawmakers love: it keeps up on the upward slope, and does so without using taxpayer dollars, either.
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And we were surprised on the 2008 vintage ...

... 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.
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Squandering away an extreme makeover

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.
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Blaming the media

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:
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Ratings models missed essential collateral risk factors

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.
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Suicide right ahead of foreclosure auction

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:
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Richard Bitner on Bloomberg TV

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.
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Bloomberg Discovers the REO Industry

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:
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