Uhhh-Ohhh… The most creditworthy borrowers are defaulting now
Well, well, well…I hate to say “I told you so”, but imagine my surprise (or lack thereof) one morning last week when I saw the following headlines on the Drudgereport.
COUNTRYWIDE: Rise in mortgage defaults among most creditworthy borrowers…
California defaults hit 10-year high…
Wisconsin foreclosures up 23%…
MOODY’S: Housing difficulties cause for concern but no systemic threat…
The one that grabbed my attention the most was the ‘rise in mortgage defaults among most creditworthy borrowers’. I knew this would happen, but I had not seen any hard data yet to prove it. I have contacts in capital markets that have told me lots of ALT-A loan pools are in double digit delinquency, but I had not heard much about the ‘A-paper’ loans that go to the ‘most creditworthy borrowers’.
I know this info is about a week old, but from my standpoint, it isn’t really surprising or news to me. That said, I am working on a new post that deals that should help discuss this situation in detail. I have had the little picture-in-picture window on my computer tuned to CNBC the past few months, so I am very familiar with what the financial pundits are saying about the subprime mortgage mess. I have some feedback of my own, so stay tuned for that.
Thanks for stopping by and for understanding that this blog is not a real source of revenue for me, and that is why I have not been posting as frequently lately.
Stay tuned….
SoCalMtgGuy
August 7th, 2007 09:44
i came accross your site,about 14 months ago,you knew it then,and now its here,total carnage,even though some mortgage companys are seeing some small rebounds in price today,i cant see how they can possibly survive,in the long run,your posts are greatly appreciated,6 posts a year is fine,your insight and foresight was and is incredible
August 7th, 2007 12:01
I’ll second what Gary said - your posts were amazingly accurate in their predictions of the scope of this mess. I hope you have made out well in your new career - you certainly bailed from the mortgage broker scene at the right time!
August 7th, 2007 12:23
At least you’re still alive…
1 paragraph a week would be nice. They don’t always have to be super detailed with info that you have to prepare.
I miss the old threads
August 7th, 2007 12:29
Thanks…it is nice to know that people realize I was saying these things 2 years ago. That said, there is more bad news to come. I will elaborate further on my next post. Maybe I could be on CNBC as somebody that saw these things on a daily basis and not some ‘analyst’ looking at numbers.
I could have saved Bear Stearns hundreds of millions of dollars and helped other firms or hedge funds minimize their losses. There is still more bad news coming…
Thanks for your loyalty to my blog.
Stay tuned…
SoCalMtgGuy
August 7th, 2007 12:37
Article in Bloomberg had this to say:
Today is the last day of work for 6,250 of the 7,000 employees at American Home Mortgage Investment Corp., a lender that dealt in prime and Alt-A loans. Last week, investors and lenders pulled the plug on at least $750 million of home loans promised by Melville, New York-based American Home to thousands of now-stranded borrowers.
So, what happens to the loans and who do the borrowers pay? What is the risk of them losing their homes?
August 7th, 2007 14:24
Heya bro! Good to see you are still around. Glad I kept your page in my feeds
Looking forward to any further light you can shed on this mess.
August 7th, 2007 18:57
“I have had the little picture-in-picture window on my computer tuned to CNBC the past few months…”
I knew the Cramer rant would “smoke you out of your hole”.
August 7th, 2007 19:27
The one thing that most people never understood was that everyone was buying too much house. What good is it to have great credit and a high-paying job when you go off and buy a house for $1.5 mill when you only earn enough to afford one worth an even million.
August 7th, 2007 19:48
chicago bubble blog…
Sadly it wasn’t Cramer, or the other analysts, or the subprime meltdown, or Bear Stearns getting crushed, or hedge funds melting down, or another big mortgage company going BK (I knew those things were coming)…it was waking up to hillary clinton saying that 1 BILLION of tax dollars was needed to ‘help’ people that couldn’t make their mortgage payments.
I have said it before and I will say it again…this country is bankrupt of PERSONAL RESPONSIBILITY and these politicians pander to that fact.
I will discuss this further in my next post…
Stay tuned…
SoCalMtgGuy
August 7th, 2007 20:55
If I had to look at Hillary’s face every day I shoot myself….
Your insight and humor are missed!
August 8th, 2007 06:46
And if I had to look at Giuliani’s face every day I’d shoot myself…
August 8th, 2007 07:07
Ah, I saw that on CNBC’s web site. 1 billion dollars is a drop in the bucket. Add to that the the money for billion dollars is going to come tax dollars from some of those very FB’s she’s trying to help. If they can’t pay their mortgage why can they affod to give up more in taxes?
August 8th, 2007 11:41
How can I profit from the foolhardy mistakes of others? How can I get a decent house for super cheap now? Been living under my means for awhile, watching everyone with their fancy stuff, mcmansions, cool cars, and now they can’t pay for it all, so I will rise like the phoenix and buy them for ten cents on the dollar. how can it be done?
August 8th, 2007 12:20
Georgina…
Be patient. This is only the beginning. When the news is really bad…that will be the time to buy….whether it is cars, real estate, or plasma TV’s.
In my opinion, we are a years, not months away from the bottom.
Stay tuned…
SoCalMtgGuy
August 8th, 2007 18:27
Good to see you back SoCal, so when this all plays out in a few years what’s it going to take to get a home loan 20% or more cash down ?
August 9th, 2007 15:04
Sorry for the slightly off topic question, but how in the world are you able to get picture-in-picture of CNBC on your computer??? I’ve been trying like hell to find a way to do this for weeks, but I’m stumped. Do you hook up your computer to a TV tuner and then hook that up to your cable/dish signal? Is there a website you go to? I really would like to do this. Thanks and welcome back. I check this site regularly.
August 9th, 2007 16:16
Dax, get a TV Tuner Card.
August 9th, 2007 17:37
Nice to see you are back SoCal, I guess you got the realtor certificate that you were waiting for.
August 9th, 2007 17:54
Dax…I have a samsung widescreen monitor with build in TV tuner. I just plug cable right in the back and go. I can use it as a TV or a monitor, or use the PIP window to go between the two.
Just get a tv tuner card…pretty easy to set up.
Slick…realtor certificate? I’m not doing anything in the RE industry anymore…except following it and blogging about it…occasionally
Working on a new post…so stay tuned.
SoCalMtgGuy
August 10th, 2007 21:51
Any politician calling for a bailout should be voted out of office. Rewarding reckless financial decisions will only lead to bigger disasters down the road.
August 11th, 2007 22:36
Hey! What about my bailout for my losses during the dotcom bust, Hillary? Man, someone in her camp is giving her bad advuce — exactly what voter constituency is she going after with a (paltry) $1B bailout? How sad.
No bailouts.
If you didn;t read the fine print, thne…sorry, you get the shaft.
August 15th, 2007 16:27
Disturbing news from large prime wholesaler. Signed loan docs and they may not fund because of the loan being unsaleable.
http://thegreatloanblog.blogspot.com/
August 16th, 2007 12:08
I hope there is MUCH MUCH MUCH more bad news…people deserve what they get. I really want these arrogant home owners to get what’s coming to them. Far too many good, hardworking folk have paid the price of these freeloading, hollier than though jerkoffs sitting in their 1000 sqft piles asking for $700K and driving around in equity bought Beemers….
I want none of those things but I sure as hec want to see these people fry.
January 4th, 2008 11:17
Why all the doom and gloom??
It’s known that 97.some odd percent of all homeowners are current in the payment of their mortgages. Why are we so focused on the 3% who were either dooped into bad mortgages or flat out make poor financial decisions for themselves?
Do not bail anybody out of their current crisis,…regulate the Mortgage business and this will clean itself up by the end of 2008!
January 11th, 2008 22:14
The news ‘rise in mortgage defaults among most credit worthy borrowers’ is not a good one. I am very surprised.
January 16th, 2008 23:30
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June 4th, 2008 23:13
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