Another subprime lender down? (rumor)

[Anonymous]

Corruption in the REO area has been rampant. The thing is, appraisals are ordered when required by law, but the companies disregard regularly and the sales team set the price. In the past, Reo sales incentives and relationships with investors drive the price more than appraisals. But an even bigger secret is that values for properties in those bulk sales for the MBS/ABS markets are set by the trade desk–in the past they could actually override the number in the system. Definitely a little Enron-y.

[Bugs]

It’s all a matter of time. They can only play those games for so long before they run out of rope. Some of these guys are obviously hoping the market rebounds and takes off again, but that’s not going to happen soon enough to save them.

The irony is that the longer they wait and the more games they play the worse the fallout will be.

[DaisyDuke]

Deutsch Bank – A reator sent me a listing of Notices of Default for OC/LA . . . Deutsch Bank was on no less than 30 of them — how come no one has mentioned this subprime lender?

Does anyone have info on this bank?

[sdcellar]

Deutsche Bank is one of the largest banks in the world (they are based in Frankfurt, Germany) and I wouldn’t exactly consider them a subprime lender. I’m sure they make subprime loans, but if they were to go down as a result of them, that would be a *huge* deal.

I seem to recall some posts here (or somewhere) about their role in the subprime world. Maybe somebody here can provide more insight.

[Anonymous]

Deutsche Bank is most likely the servicer on the loans and they may be servicing these loans for issuers or aggregators who have issued mortgage securities or some type of debt structure.

Deutsche Bank did recently complete the acquisition of MortgageIT Holdings though and they did quite a few alt-a loans if memory serves correctly.

[Anonymous]

A US Appeals Court in San Francisco recently affirmed the holdings of the District Court which imposed liability on Lehman Brothers, who acted as a warehouse lender for First Alliance Mortgage Co. a number of years ago, for the fraudulent misconduct of Alliance. This from an article I just read.

It strikes me, that based on this ruling, some warehouse lenders might rethink their liability in dealing with some of the subprime lenders who they extend financing to in order for the subprime lenders to make loans.

Alliance was a predatory type of lender, in my opinion, who preyed upon seniors and others, inflicting appalling costs and charges for their loans. Alliance filed for bankruptcy in 2000 to escape class-action lawsuits.

The article I read implied that Leahman had knowledge of the practices of Alliance and failed to take appropriate action. In the vernacular of the business world Lehman has “deep pockets” and I no doubt think these warehouse lenders will move to protect their best interests which means we could see more subprime lenders’ having trouble with their warehouse lines which are their lifeblood.

[bigtrouble]

From that dreaded grapevine:

The local servicing site for a subprime subsid of a MAJOR player is about to be shut down. The announcement hasn’t been made, so no details, but if you are looking for workers with mortgage industry experience in diego, you will soon have a lot to choose from.

Good luck people.

[NeetaT]

Good!!!!!!!!!

[blahblahblah]

Did anyone see this article about Merit Financial? I’m gonna be glad when the likes of these guys all get flushed away, at least until the next ridiculous speculative boom…

Merit Financial, says Rhodes, was run more like a frat house. Its employees were recruited from the Kirkland area bar scene and were turned loose on unsuspecting borrowers after about an hour of training.

It was an environment where 18-year-old know-nothings outnumbered and worked side by side with the experienced loan officers. The beer flowed freely and the boss often provided two kegs for company meetings. Employees were even free to bring in six-packs on Friday.

The article quoted loan officer Sunny Hoppe saying, “It was young, hip, drugs and drinking.”

And young, drunk hipsters pulling credit reports and selling mortgages wasn’t the only problem. Predatory lending tactics and outright fraud were also at work at Merit.

[TheBreeze]

I think we’re about to see the subprime market tigten up considerably. No more 100% financing. No more financing closing costs. No more stated income crap. We should see the housing market soften significantly this spring with all the easy money gone. Good riddance.

By the way, who was that seller on here the other day who was waiting for their buyer to see if they could get 100% financing? I wonder if that deal closed? If that FB wasn’t able to get 100% financing this month, I doubt they will be able to get it at all.

[bigtrouble]

Here is a list of top subprime servicers:

http://www.mortgageservicingnews.com/plus/data/subprime_servicers.html

[img_assist|nid=2416|title=Top subprime servicers|desc=|link=node|align=left|width=466|height=256]

Its just so sad about the close down, or is that just survivor’s guilt? This is the second time the company has closed down a San Diego site. I love you San Diego, but, well, anyone know anything about MN?

[bigtrouble]

deleted

[DaisyDuke]

TheBreeze . . . that seller would be me. I am going to be S U R P R I S E D if the deal goes through. I was told by my agent this morning that the buyer has gone through two levels of “approval authority” and all looks “in order/good” and that just a couple “conditions”, that aren’t a big deal, need to be met. I am told loan documents are going to be ready tomorrow.

My agent tells me that if loan documents are drawn then it is pretty much near completion . . . he added that he has never had one fall through after that juncture, unless I am really special and things fall apart. He said I don’t want to be that special. I could be the first for him. We’ll see.

But you are absolutely correct, there is no way easy money will be flowing in the VERY near future.

[TheBreeze]

Did your deal go through, Daisy?

[no_such_reality]

anyone know anything about MN?

You mean the State?

Ask away.

[Author]

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