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HLS
ParticipantSD, it’s still an OK barometer on day to day moves, but not foolproof. You cannot assume the 30 YR rate by where the 10 YR is. Will see if the 2008 spread holds or widens.
Point agreed that I don’t think we will see a huge move up in the 10 YR and a drop in the 30 YR.
My point was that when the FED cuts rates, many think that 30 YR rates will go down. The FFR is now 325 bps lower and 30 YR rates are back where they were before the first cut last summer.
If the 10 YR gets back to 5% or above, I imagine that 30 YR rates will be considerably higher than 6.25%
Payments on a $417K loan are now much higher than just several months ago.
In January, 30 YR fixed were at 5.25% for a few days, and were at 5.375% in January and in March…
They have been below 5.875% most of this year.Is it up up and away or back into the 5’s ?? I DUNNO.
ParticipantThese are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)
Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…This will either create HUGE losses
OR
HUGE restatements
OR
Their demiseNothing good can come from them in a declining market.
ParticipantThese are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)
Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…This will either create HUGE losses
OR
HUGE restatements
OR
Their demiseNothing good can come from them in a declining market.
ParticipantThese are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)
Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…This will either create HUGE losses
OR
HUGE restatements
OR
Their demiseNothing good can come from them in a declining market.
ParticipantThese are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)
Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…This will either create HUGE losses
OR
HUGE restatements
OR
Their demiseNothing good can come from them in a declining market.
ParticipantThese are IED’s on a balance sheet.. Better to leave them alone and hope that when they explode they might not hurt anyone….Ignore them and pretend that they don’t exist (until you have to)
Better for the lender to take a 110% loan and quietly adjust it to a 125% and delay the day of reckoning.
Why wake a sleeping giant ?The REALLY sick part ?
Accrual accounting allows them to count as income the interest on neg am loans that is deferred and may NEVER be collected…This will either create HUGE losses
OR
HUGE restatements
OR
Their demiseNothing good can come from them in a declining market.
ParticipantMy understanding is that the vast majority of NEG AM loans were not sliced and diced with the subprime ginsu knife.
Most are “portfolio” loans meaning that the lender kept them on their books along with the servicing rights.
In a 6% environment, some these loans were at 8%-9%+ representing a 35%-50% premium, AND the fact that there were accounting flaws which allowed them to “misplace” phantom income.
This may turn out to be the 500 year flood that people heard about, but didn’t think would occur in their lifetime.
I truly believe that we are witnessing history being made of a meltdown. It is going to affect the USA much worse than others.
Stocks trickle down slowly until they hit bottom. Houses will do the same.
ParticipantMy understanding is that the vast majority of NEG AM loans were not sliced and diced with the subprime ginsu knife.
Most are “portfolio” loans meaning that the lender kept them on their books along with the servicing rights.
In a 6% environment, some these loans were at 8%-9%+ representing a 35%-50% premium, AND the fact that there were accounting flaws which allowed them to “misplace” phantom income.
This may turn out to be the 500 year flood that people heard about, but didn’t think would occur in their lifetime.
I truly believe that we are witnessing history being made of a meltdown. It is going to affect the USA much worse than others.
Stocks trickle down slowly until they hit bottom. Houses will do the same.
ParticipantMy understanding is that the vast majority of NEG AM loans were not sliced and diced with the subprime ginsu knife.
Most are “portfolio” loans meaning that the lender kept them on their books along with the servicing rights.
In a 6% environment, some these loans were at 8%-9%+ representing a 35%-50% premium, AND the fact that there were accounting flaws which allowed them to “misplace” phantom income.
This may turn out to be the 500 year flood that people heard about, but didn’t think would occur in their lifetime.
I truly believe that we are witnessing history being made of a meltdown. It is going to affect the USA much worse than others.
Stocks trickle down slowly until they hit bottom. Houses will do the same.
ParticipantMy understanding is that the vast majority of NEG AM loans were not sliced and diced with the subprime ginsu knife.
Most are “portfolio” loans meaning that the lender kept them on their books along with the servicing rights.
In a 6% environment, some these loans were at 8%-9%+ representing a 35%-50% premium, AND the fact that there were accounting flaws which allowed them to “misplace” phantom income.
This may turn out to be the 500 year flood that people heard about, but didn’t think would occur in their lifetime.
I truly believe that we are witnessing history being made of a meltdown. It is going to affect the USA much worse than others.
Stocks trickle down slowly until they hit bottom. Houses will do the same.
ParticipantMy understanding is that the vast majority of NEG AM loans were not sliced and diced with the subprime ginsu knife.
Most are “portfolio” loans meaning that the lender kept them on their books along with the servicing rights.
In a 6% environment, some these loans were at 8%-9%+ representing a 35%-50% premium, AND the fact that there were accounting flaws which allowed them to “misplace” phantom income.
This may turn out to be the 500 year flood that people heard about, but didn’t think would occur in their lifetime.
I truly believe that we are witnessing history being made of a meltdown. It is going to affect the USA much worse than others.
Stocks trickle down slowly until they hit bottom. Houses will do the same.
ParticipantMost people have no idea how toxic these loans are.
Fortunes were made pushing them by people who didn’t understand them to borrowers who didn’t understand them.
The higher the margin a borrower was put into, the larger the commission the lender paid to the loan originator.
Compare this to a PAR rate loan, the lender doesn’t pay one penny in commission.
They tempted dishonest loan originators to overcharge the borrower and rewarded them with huge commissions.
Two of the largest neg am (POA) lenders have seen their stock price drop 80%-90% in the last 52 weeks. Another is headed that way.
ParticipantMost people have no idea how toxic these loans are.
Fortunes were made pushing them by people who didn’t understand them to borrowers who didn’t understand them.
The higher the margin a borrower was put into, the larger the commission the lender paid to the loan originator.
Compare this to a PAR rate loan, the lender doesn’t pay one penny in commission.
They tempted dishonest loan originators to overcharge the borrower and rewarded them with huge commissions.
Two of the largest neg am (POA) lenders have seen their stock price drop 80%-90% in the last 52 weeks. Another is headed that way.
ParticipantMost people have no idea how toxic these loans are.
Fortunes were made pushing them by people who didn’t understand them to borrowers who didn’t understand them.
The higher the margin a borrower was put into, the larger the commission the lender paid to the loan originator.
Compare this to a PAR rate loan, the lender doesn’t pay one penny in commission.
They tempted dishonest loan originators to overcharge the borrower and rewarded them with huge commissions.
Two of the largest neg am (POA) lenders have seen their stock price drop 80%-90% in the last 52 weeks. Another is headed that way.
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