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September 11, 2007 at 6:55 AM in reply to: OT: Can anyone recommend a Audi/VW mechanic/specialist (except the stealerships) #84142
bsrsharma
ParticipantThis is a Ben Stein story in CNN
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One of my best friends, a blue-eyed, red-haired stunner and a math whiz, is married to a builder and mortgage broker near Naples, Fla. She flew into town, and I had lunch with her today. “How is your husband taking all this stuff?” I asked her.“He doesn’t sleep. At most he sleeps from 5 A.M. to 7 A.M. We built two spec homes near Naples. We spent $2.7 million on each of them. We had them listed for $4 million each. We haven’t had one prospect in a year. We lowered the price by a million each. Still no prospects. We’re losing $60,000 a month on the two of them. My husband has no business. None. The phone never rings.”
“Horrible,” I said.
“I’m leaving him,” she said. “He’s grouchy all the time. I want a guy who’s rich and cheerful all day and all night. Why should I have to suffer because his business is bad?”
“He’s your husband,” I said. “You have to stick by him.”
“Why? I want to laugh and have fun, and he’s in a bad mood for months on end. I didn’t make this mortgage mess, and I don’t see why I should have to suffer for it.”
“It won’t last,” I said. “It never does.”
She suddenly looked much more upbeat. “How long until the market turns around?” she asked expectantly.
“Maybe six years,” I said.
She looked staggered. “That’s it,” she sighed. “I want you to start looking for a rich husband for me who’s going to stay rich no matter what. Tell him I’ll be a really great wife.” (She has a killer sense of humor so I am praying she’s kidding.)
Twenty-four hours later, as I was driving to Malibu from Beverly Hills, I was called by a woman friend of 37 years who is a psychologist and marriage and family counselor in a suburb of Philadelphia. I told her the story about my friend who’s planning to look for a richer husband. She gasped.
“That could be a disaster,” she said firmly.
“Because she’s breaking up her family over money?”
“No, because what if she leaves him and the mortgage market and the spec home market suddenly turn around and he gets rich again and then she can’t find anyone as rich to marry next?”
“Good thinking,” I said.
“You have to be realistic,” she answered.
September 10, 2007 at 11:43 AM in reply to: Rumor – is CW reselling properties back to borrowers as short sales? #84048ParticipantNot a stupid idea really. If the foreclosure costs are much more expensive than the forgiven amount, this might make sense. In the example aboove, if the house goes through foreclosure, erodes in value due to brown lawn/green pool/vice den issues, it may bring $200,000 eventually. Why not settle for $400,000 now rather than $200K a year from now?
September 10, 2007 at 11:38 AM in reply to: Housing Market Slump Forces Couple To Open Brothel #84046Participant…prostitution. The two are both mortgage brokers
Diversification due to business conditions?
ParticipantThey don’t even have to leverage anything if they simply bundle and sell the loans and take a nice cut. That is why they all loved to make HELOCs and Re-Fi lonas. The ultimate lender may be someone on the other side of the world. Faster they loan, more profit they made. That is why they all blanketed with branches in every hole in the wall so the J6P can’t walk anywhere without hearing about HELOCs/ReFis. Now that the show is over, expect them all to close.
ParticipantIn the bubble mania days, many corners were cut and people are discovering many violations of Truth In Lending Act (TILA). It seems that can be used as a pretty powerful weapon against the foreclosure juggernaut.
see http://bigpicture.typepad.com/comments/2007/08/coming-soon-tru.html
TILA violations can cause some mortgages to become unsecured.
Judgments can render a whole class of CMOs worthless.
ParticipantA few years back, during the early part of bubble mania, I was shopping at a Food-4-Less and saw a new Wells Fargo being opened. A young lady was stopping all grocery shoppers and letting them know about the new “facility”. Instead of just walking, I stopped and asked why they have so many new grocery store based branches. She mentioned that most of the business was Home Equity Credit and re-financings (cash out). I think this business was a huge river of gravy for all the banks. Just package the loans and sell for profit. Banking doesn’t get any less risky than that. If you ask me, I think the economy of the entire nation was pretty much Home Equity Withdrawal driven the last 5 years or so. If you invert that cycle, we are bound to see a 5 year stagflation/recession period now.
ParticipantSeems like minimal taxpayer impact; right?
September 7, 2007 at 5:52 PM in reply to: Countrywide’s message of confidence turned to crisis #83817ParticipantSeptember 7, 2007 at 5:21 PM in reply to: Appleton-Young tells Realtors NOT to take listings! #83810ParticipantSD has a point. When I want to scan for listings, I filter out all ads that don’t have either “Motivated Seller” or “Price Reduced” in them. With the markets being what they are, why would you want to even consider buying from anyone who is not most desperate?
ParticipantPress Release Source: Countrywide Financial Corporation
Countrywide Announces Plan to Address Changing Market Conditions Including Workforce Reductions
Friday September 7, 5:30 pm ETCALABASAS, Calif., Sept. 7 /PRNewswire-FirstCall/ — Countrywide Financial Corporation (NYSE: CFC – News) today announced a plan of action to address changing market conditions that positions the Company for continued growth and success. Central elements of this plan include:
— Reductions in workforce which will occur in areas most impacted by
lower mortgage market origination volumes. The Company presently
estimates a total workforce reduction of 10,000 to 12,000 over the next
three months representing up to 20 percent of its current workforce.
Actual reductions could be lower should the interest rate environment
and related market volume outlook improve. Based on current interest
rate levels, Countrywide presently expects that total market
origination volumes will decline approximately 25 percent in 2008
compared to 2007 levels.— Migration of the Company’s residential lending business into its
federally chartered thrift entity, Countrywide Bank, FSB, will
continue. This is expected to enhance and strengthen Countrywide’s
business model by delivering greater and more stable liquidity, reduced
borrowing costs and greater operational efficiencies. By September 30,
2007, the Company expects that almost all residential loan production
will be originated within the Bank.— Product guideline revisions have been made to ensure that all loans
which the Company produces can be sold into the secondary market or are
high quality prime loans to be held in Countrywide Bank’s investment
portfolio. This includes the Company’s recent decision to no longer
originate any subprime loans other than those eligible for sale or
securitization under programs supported by Fannie Mae, Freddie Mac or
the FHA. In spite of these changes, it is important to emphasize that
Countrywide continues to offer among the broadest and most competitive
product menus in the industry.— Growth plans will continue in areas of opportunity. Countrywide’s
retail and wholesale lending divisions plan to continue aggressively
pursuing the increased opportunities presenting themselves in the
current environment for profitable market share growth. Countrywide
Bank, in addition to housing the Company’s mortgage banking activities,
will also focus on growing its residential and commercial loan
investment portfolio and expanding its financial centers and deposit
franchise. Countrywide’s insurance segment will continue to grow both
its institutional and personal lines insurance businesses.“We are taking decisive action to ensure that Countrywide continues to be well-positioned for further success,” said Angelo Mozilo, Chairman and Chief Executive Officer. “As we carry out our plan, the Company’s overarching focus is exactly where it has always been: to remain an industry leader in the U.S. residential lending business, to deliver value and world-class service to our customers and business partners, to enhance shareholder value, and to provide career opportunities for our people.”
“Each employee at Countrywide is considered an important member of the Countrywide family,” said David Sambol, President and Chief Operating Officer. “While workforce reductions are therefore always very difficult, these decisions are being made with the utmost attention and sensitivity to the impact they will have on our Company and our people.”
ParticipantCountrywide plans to slash up to 12,000 jobs
The mortgage lender also says loan originations will be 25% lower in 2008.September 7 2007: 5:51 PM EDT
NEW YORK (CNNMoney.com) — Troubled subprime mortgage lender Countrywide Financial Corp. plans to slash as many as 12,000 jobs over the next three months, according to company statement released late Friday.
Countrywide (down $0.27 to $18.21, Charts, Fortune 500) also expects that its loan originations in 2008 will be about 25% lower than this year.
The company says it’s shifting its focus to relatively conservative loans. These would be held as long-term investments in its savings bank unit or sold to Fannie Mae or Freddie Mac, government sponsored entities. Countrywide is also seeking loan insurance from the Federal Housing Administration.
Countrywide cut 500 jobs in August and another 900 jobs Wednesday, mostly from its mortgage production divisions. The company says the new round of cuts may be smaller than expected if the market improves, according to the release
http://money.cnn.com/2007/09/07/real_estate/countrywide_cuts/index.htm?cnn=yes
ParticipantThe drop of 4,000 jobs in August
out of a population of 300 million = 13 parts per million. That is 5 digits t o the right of decimal point. Why is everyone dancing around as if their hair is on fire? BTW, I believe a recession is coming; but accurate statistical interpretation – someone please clue me in.
ParticipantAny thoughts on the very unfashionable investment – real estate – as in buying a home in a nice area (for investment) that was not bitten by the bubble (like the one Dave found in Denver suburbs) as an inflation hedge? If $ drops by 50% over next 10 years (very highly probable), how do you shelter your wealth?
ParticipantLake Elsinore for about $107 a ft
But, wasn't there some spirited discussion about whether LE should be considered nice or nasty? I don't think too many people liked to live there.
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