Alliance Bancorp files for Chapter 7 protection

[Allan from Fallbrook]

The interesting thing about Alliance is that it specialized in Alt-A lending, and not sub-prime.

Trying not to read into this, but it certainly suggests that the rot might be spreading beyond sub-prime and into the Alt-A market.

Link to Yahoo story:

http://news.yahoo.com/s/nm/20070716/bs_nm/alliancebancorp_bankruptcy_dc_1;_ylt=Am3YaXMorfL6UykBoIwow5.z1g4B

[Anonymous]

Ouch – they shut down officially on Friday the 13th. http://www.loanwholesale.com/

[Anonymous]

Ouch – they shut down officially on Friday the 13th. http://www.loanwholesale.com/

[DaCounselor]

I think we will continue to see problems in the Alt-A market. My guess is based upon the presumption that some % of strong credit/higher income folks used low doc/no doc to secure funding and stretched to buy the bigger, better home. It will be interesting to see what the default rate will ultimately be in the Alt-A universe.

[DaCounselor]

I think we will continue to see problems in the Alt-A market. My guess is based upon the presumption that some % of strong credit/higher income folks used low doc/no doc to secure funding and stretched to buy the bigger, better home. It will be interesting to see what the default rate will ultimately be in the Alt-A universe.

[lonestar2000]

With the bottom feeders of the market (I’m one of them) disappearing, it is only a matter of time until the chain reaction moves up the chain. Many Alt-A borrowers depend on the bottom feeders to buy their homes as they move up.

Only the very rich, who aren’t dependent on selling current property to buy new ones, are able to weather most of the storm. They too will lose money, but not enough to cause major financial distress.

[lonestar2000]

With the bottom feeders of the market (I’m one of them) disappearing, it is only a matter of time until the chain reaction moves up the chain. Many Alt-A borrowers depend on the bottom feeders to buy their homes as they move up.

Only the very rich, who aren’t dependent on selling current property to buy new ones, are able to weather most of the storm. They too will lose money, but not enough to cause major financial distress.

[Author]

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