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MSNBC has its article up:

http://www.msnbc.msn.com/id/16770023/

“Fitzgerald alleged that Libby in September 2003 “destroyed” a Cheney note just before Libby’s first FBI interview when he said he learned about Wilson from reporters, not the vice president. ”

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Special prosecutor Fitzgerald just laid out in opening statements that Libby lied to cover up Cheney’s involvement.

Libby’s defense team just started opening statements saying that Libby was asked to be scapegoat for Karl Rove!

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GMAC-Resi layoffs are truly going to happen industry wide. They are not the most exposed of the mortgage heavyweights; in fact, they are very diversified, and the subprime market freefall we are about to see only affects their subsid Homecomings. They acquired Homecomings and its portfolio (and locations and staff) in whole a number of years ago, and are just now fully integrating all their companies (GMAC Mortgage, Homecomings, GMAC-RFC, master servicing)under the ResCap umbrella. GMAC-RFC is the largest warehouse lender in the country, as well as one of the biggest players in the MBS/ABS market.

Countrywide, WaMu, have much bigger exposure issues. Not only is the subprime market a big exposure, but I would bet that the REO areas are under huge pressure to restructure. Can you blame them–think of what’s in the pipeline. Think of trying to forecast this market and estimating the reserves necessary to cover your losses. When you’re wrong, its millions of dollars wrong.

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Here is an article on the layoffs. They don’t mention that most of the losses are coming from closing the San Diego Homecomings servicing site.

GMAC ResCap to Cut 1000 Jobs
Tuesday January 16, 5:53 pm ET
GMAC ResCap to Cut 1000 Jobs in Mortgage-Related Business, Blames Slowdown

NEW YORK (AP) — Residential Capital LLC, the real-estate financing company owned by General Motors Acceptance Corp., said it will eliminate 1,000 positions by October as it grapples with “the continued deterioration” in the subprime mortgage sector.
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The Minneapolis-based company, known as ResCap, said in a filing with the Securities and Exchange Commission that it will reduce its work force by 800 jobs and will not fill 200 open positions in its U.S. mortgage business. It has 14,000 employees worldwide.

ResCap estimated that it would incur about $10 million in severance and related costs associated with the cuts, but expects to save $65 million in 2008.

The company attributed the move to a number of factors including slower loan originations, a cooling housing market, a challenging interest-rate environment and the continued deterioration in the business of lending to people with less-than-perfect credit histories.

Detroit-based General Motors Corp. now owns 49 percent of GMAC, with the rest owned by an investor consortium led by Cerberus FIM Investors LLC.

http://biz.yahoo.com/ap/070116/gmac_rescap_job_cuts.html?.v=1

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What about layoffs?

GMAC Rescap announced plans today to close the San Diego Servicing site, as well as other lesser consolidations. It expects that the “reduction in force” to come to 800 jobs, plus 200 current openings that will not be filled.

Remember that GM has been finalizing GMAC’s sale, so I expect that this is why the cuts are coming sooner, rather than later. I expect many more companies in the industry to be announcing layoffs. And for companies with multiple sites, the California site are usually first to go.

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You don’t get rich from a falling market. You get out of it.

Problem is, speculation in fake estate has inflated the price of all real estate.

But what is the value of a property? Most say ultimately it what the next guy will pay for it. Then the next guy, and so on. But real estate is just not liquid enough to be priced that efficently.

Here is how the banking industry determines it. They set an estimate of market value based on appraisals, broker’s opinion, etc, throught the lifecycle of the loan that is then qc’ed by in house appraisers. This value is then tracked to an index valuation. The indexed valuation uses the property valuation at origination as a base. The base value is multiplied by a factor representing area home price appreciation (or depreciation) between the origination date and current. This indexed value incorporates changes in home price appreciation for each area. The indexed value represents the value that the property would be worth if it appreciated consistent with its area, and if the condition of the property remained stable. Thses two very big assumptions are why you need to take avm’s like Zillow, etc with a load of salt. Considering that estimates of value are rendered on distressed assets, they should e lower than the index values, but the difference should be consistent over time.

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Hey now, lets be fair. A McMansion can hold a lot of Beanie Baby’s.

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President Clusterfuck looked like crap last night- why? Obvious- he was forced to deliver a speech that makes NO SENSE AT ALL.

If the future of the nation hangs in the balance- and the problem is too few troops- and this is the last time to get it right- then how many troops do you send? Half a million is the right answer- cause you believe that you CANNOT AFFORD TO FAIL-and you institute a draft and raise taxes to pay for it-

But no- Clusterfuck tells us that our very lives hang in the balance and sends 20,000 additional troops- and really these are not additional troops- it’s the same level he had a year ago- which didn’t work. It all show. We are all just FA, another fucked american.

So, want to elect McCain? IF of course you believe we MUST not fail, the only way to “win” this war is to institute the draft, right? Kiss your boys and girls in bed tonight. ’08 election might determine if that 8th or 9th grader will be sent to die for Bush’s folly.

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deleted

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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?

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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.

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In march 2001 95% of economist predicted no recession.

By Sept. 12th of that year, many had changed their minds.

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Lenders will have to follow the rules. These exotic loans products could very well be ruled “predatory lending”.

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When companies publicize their efforts at “Home preservation” and helping people avoid foreclosure, its is mostly that, a PR move to combat criticism of predatory lending practices. That being said, the big banks really have no desire to acquire all the assests that back their loans–they are in the loan business, not the land business. But, if there is a way to “help” borrowers not go into foreclosure, and make a few bucks off of it, they will be all over it.

But “reverting to the bank” is not that simple. They have a lot of options before that occurs and they became REO properties. One of the biggest ways now is to sell non-performing loans to another company (or division of the same company) who then makes them conforming loans (through better loss mitigation efforts, or even fudging the appraisal amounts or details so that they now magically “perform”), pools them together and resecuritizes them. This turns out to be a little Enron, because the same company will write off the loss, then sell them off for pennies to another division of the same company that then resecuritizes them at a HUGE profit. Question is, where’s the loss? Its gotta be somewhere, just doesn’t show up on the disclosures.

Also, when banks are forced to buy back, they then start up due diligence to see if any fraud was committed on the loans by any appraisers, brokers, originators, everyone. And they will fight it–which means that in the coming bloodbath anyone who has passed off funny paper will go out of business (if the haven’t already). If fraud is proven, then companies have some insurance protection (maybe).

If it ends up in an REO department of a big bank, then the incentives they offer their staff will determine final distribution. If they give bonuses for liquidating in 30 days, they will, and leave a lot of money on the table. IF they don’t then they have no problem letting it sit out there for 100 days, or even a year, trying to get an offer that comes closer to the appraised value. You will see them turn down offers that are significantly higher than what they will sell it for a year later, often by the same investor.

So, if you want to make some money on these buybacks, get to know the REO depts and salepeople at these big mortgage banks and servicers. THe same investors get the same sweetheart deals on these properties because of connections, pure and simple. Make a low low offer and wait. Make another low offer 6 months later. It takes patience, and flexibility on what and where you buy, but you can get them CHEAP.

And they want the landslide, asap, all at once. These companies are very diversified, if interest rates go up, the value of their servicing rights go up (because people with lower interest rate loans won’t be refi-ing out of them, and will keep them for longer, making the servicing rights more valuable.) They don’t care about market valuation; the only thing that matters is the value of the assest in comparison with the loan; if these are horribly out of whack, they will want to get out of those agreements as an industry, however they can, trim down by massive layoffs, and justify the losses as creatively as possible. And on to the next profitable fiction. It’s just business.

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davelj

Spot on. Other piggington favs:

“I have no problem affording a $4200/mo mortgage on my six-figure income….” or

“Having timed the market, I sold in 2005 and now have 500k in the bank….” or

“Does buying an Audi instead of a 7-Series make my penis look bigger….”

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