It appears the investors don't like it when their MBS go from 5 billion to worthless (quote from Beart Stearns) in a day.
I am getting these everyday from Lenders. It appears that stated income (liar loans) may be a thing of the past which means automatic meltdown for the RE market here in CA.
Without this vehicle for buyers, you can forget about a soft landing. Stated Loans had to be, in my estimation, responsible for at least 40% appreciation in this market along with the neg am loans…..
July 1 8 , 2007
To Long Beach Mortgage
Brokers ,
As part of our Q2 earnings call today with investors, we're announcing that WaMu is taking a leadership position in the mortgage industry with new subprime mortgage lending standards. Furthermore, we are challenging all subprime lenders to follow our lead in bringing positive change to a vital part of the mortgage business.
Effective today, for new customers we will:
·Offer only full-income documentation subprime mortgage loans (we are no longer offering subprime stated income loans)
·Offer subprime adjustable rate mortgage loans with initial fixed-rate terms of not less than five years (no more 2/28 or 3/27 products)
·Require tax and insurance escrow accounts on all subprime mortgage loans we approve;
·Offer industry leading disclosures and enhanced outreach efforts, including pre-closing contact by WaMu with the borrower even when represented by a broker.
I strongly believe these industry-changing subprime lending requirements strengthen our ongoing commitment to maintaining high lending standards and to responsibly address the credit needs of the communities we serve.
Good afternoon,Round 2 of all changes happening in the market is upon us and it will be making a very strong impact. I can’t say we didn’t see this coming. With corporations reporting their quarterly earnings, they are also reporting on their future business plans which include how they will make a profit. One way is to report that they will no longer be doing sub-prime loans. In the past week, I have seen CIT get out of the loan business. Yesterday an announcement was released that Long Beach Mortgage would no longer do any stated deals, and eliminate the 2 and 3 year fixed products*. There are countless other lenders following suit.If you currently have any deals that you were packaging together I strongly encourage you to submit and lock your loans with whichever lender had originally priced it out with you. I also advise you to call your rep on those scenarios to ensure they are still offering the product.
How long can WaMu and or any other bank claim that unpaid interest on ARM and NegAm mortgages as profit? When will that actually flow through to earnings reports revisions?
How long can WaMu and or any other bank claim that unpaid interest on ARM and NegAm mortgages as profit? When will that actually flow through to earnings reports revisions?
My sense of it is that a lot of businesses are playing with their numbers on their quarterly reports, but are eventually going to have to come clean when their annual reports come due. I’m looking for a lot of really bad news as these companies restate their earnings at year’s end.
My sense of it is that a lot of businesses are playing with their numbers on their quarterly reports, but are eventually going to have to come clean when their annual reports come due. I’m looking for a lot of really bad news as these companies restate their earnings at year’s end.
Wells Fargo yanks popular subprime loan
Bank says its will stop offering 2/28 adjustable-rate mortgage loans in response to market, regulatory pressure.
July 23 2007: 5:17 PM EDT
“NEW YORK (Reuters) — Wells Fargo & Co., the fifth-largest U.S. bank, said Monday it stopped offering a popular subprime mortgage product in response to market and regulatory pressure.
The company in an e-mail said it ended Friday retail offerings of so-called 2/28 loans, which at 65 percent of all subprime mortgages last year are the staple of the industry. Payments on 2/28 adjustable-rate mortgages (ARM) are based on rates that are fixed for two years and then are adjusted twice a year for the remaining 28, if the loan is not refinanced…”
Wells Fargo yanks popular subprime loan
Bank says its will stop offering 2/28 adjustable-rate mortgage loans in response to market, regulatory pressure.
July 23 2007: 5:17 PM EDT
“NEW YORK (Reuters) — Wells Fargo & Co., the fifth-largest U.S. bank, said Monday it stopped offering a popular subprime mortgage product in response to market and regulatory pressure.
The company in an e-mail said it ended Friday retail offerings of so-called 2/28 loans, which at 65 percent of all subprime mortgages last year are the staple of the industry. Payments on 2/28 adjustable-rate mortgages (ARM) are based on rates that are fixed for two years and then are adjusted twice a year for the remaining 28, if the loan is not refinanced…”
Folks, this is what a credit contraction looks like. There is no on-off switch, just a step here and a step there. Six months go by and before you know it a lot of the sources for these programs are no longer available.
Folks, this is what a credit contraction looks like. There is no on-off switch, just a step here and a step there. Six months go by and before you know it a lot of the sources for these programs are no longer available.
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