Any comment on this revelation.

[rocket science]

LA Times article on one lenders turn around.

http://www.latimes.com/business/la-fi-countrywide3sep03,1,7293112.story?coll=la-headlines-business

While there are many fine points, i think this section is my favorite.

Countrywide suggests that mortgage pricing and underwriting standards during the housing boom were set by the most aggressive — that is, least rigorous — lenders, and that it was all but powerless to impose its own standards.

"Most of the large bank lenders, as well as Countrywide, were limited, slow, reluctant followers behind the lenders who most aggressively relaxed underwriting guidelines," the company said in a written response to a question from The Times.

Or perhaps this.

The letter appears to contradict Mozilo's claim last September that the company's underwriting standards required borrowers of adjustable loans to qualify at the higher rate.

The letter from Mary Jane M. Seebach, Countrywide's managing director for public affairs, said that in the fourth quarter of 2006, about 60% of its borrowers of sub-prime adjustable mortgages would not have qualified for their mortgages based on the higher rate. Nearly 25%, she said, would not have qualified for any other mortgage offered by Countrywide.

Seebach acknowledged that Countrywide, like the rest of the industry, had cut back sharply on the most default-prone mortgages — loans to borrowers with poor credit histories and no income documentation and minimal or no down payments.
"The market," she wrote, "once again realizes that it is reasonable to expect a down payment from borrowers who have not proven their ability to manage their credit."

Imagine that, expecting a down payment.

But don't worry, I keep hearing ads on the radio that this is a good time to buy.  Consult a Realtor®.

[want a good deal]

What percentage of people can still buy a home based on the new standards. Is anyone writing 100% financing loans anymore? If you got prequalified with them a couple months ago and lock a rate but now you wont qualify under the new standards will they still honor the loan or do you get booted to the curb? This would be in reference to buying a condo that was not yet built but you went into contract with the builder by putting down your 5% non-refundable deposit. Dont worry, I didnt do this, just wondering what affect it will have on the market.

[waiting hawk]

Everyone that created a blog was saying this a damn year ago. Everyone was laughing at us. Now that it is tanking people are saying how it will go down a little bit.

A year ago a RE broker was arguing with me first he said home prices would not go down, then they would flatten, now they will go down only a little bit. Almost everyone has been wrong thus far so when will they be right?

I remember an old Eddie Murphy stand up when he was talking about divorce. HALF! ILL TAKE HALF HIS SH!T!

Half in some areas is a no brainer!

[TheBreeze]

What percentage of people can still buy a home based on the new standards. Is anyone writing 100% financing loans anymore?

Kim Dicce, a Realtor in Tampa, where housing inventory is piling up, notes that lenders now seem to be requiring buyers in her area to put 15 to 20 percent down and have a credit score above 700. “Now we only have one third of the eligible buyers that we had before, and five times as many houses.” Higher-income earners with good credit haven’t been spared, as chastened lenders focus on making loans that they can quickly sell to Fannie Mae and Freddie Mac, which buy mortgages only up to $417,000. Rates on 30-year fixed jumbo loans have risen in the past month from 6.625 percent to about 7.5 percent, says Michael Daversa, president of Atlantic National Mortgage, a mortgage broker in Westport, Conn. On a $500,000 mortgage, that’s an extra $4,375 per year in interest—a 13 percent increase.

http://www.msnbc.msn.com/id/20546324/site/newsweek/page/0/

I love the smell of mortgage resets in the morning.

[want a good deal]

“Now we only have one third of the eligible buyers that we had before, and five times as many houses.”

The problem is that doesnt work out. If only 1/3 can qualify why are sales only down 10 – 20% yoy. Can someone explain that to me!

[Bugs]

The squeezing of the financing has only come about in the last 2 months; and prior to 2 weeks ago a substandard borrower still had a few options.

The average escrow does take a month, so the effects of the reduced demand for mortgage paper in the secondary market won’t really become apparent for another month or so. Even then, the comparison won’t be at the YOY level until a year from the start of this credit crunch has passed. Until then we’ll have to settle for comparing a month in 2007 with the same month in 2006.

Speaking of which, it looks like the volumes through the MLS for August 2007 are going to wind up being more than 20% less than August 2006.

[want a good deal]

Okay, thanks. Guess if I thought about it for a minute I could have figured that out. If that really comes to fruition then the upcoming sales figures are going to astound people. There will be a huge drop in sales causing even more problems and more foreclosures and so on. Maybe thats why there is so much talk about a bail out. Because the big wigs know it could get so ugly even people on here will be amazed how bad the market gets. No, thats not possible, everyone on here already thinks houses will be 75k in a month.

[Author]

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