US Housing Market Meltdown Begins

Hello, everyone! I'm putting this article under "World News" cuz when the financial meltdown gets fully under way, it will be *global*.


In addition to Novostar, Amercan Home Morgages (not just a subprime lender) filed Chapter 11 Bankruptcy on 6 August 2007 and let 7,600 employees go.


Yesterday the President and CEO of Bear Stearns quit and today there is talk on Wall Street about part of it being sold to China:


http://www.foxnews.com/story/0,2933,292237,00.html


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News Flash: NovaStar Suspends Funding Immediately
Published at August 3, 2007 in Wall Street and Mortgage News/Insight.


From NovaStar just now:


"ANNOUNCEMENT


"Due to severe dislocation in the secondary market, NovaStar Mortgage Wholesale is temporarily suspending approval and funding activity on all loan transactions that have not been locked via a NovaStar Lock In Confirmation until Tuesday, August 7th, at which time the policy will be reevaluated. Locked loans and loans with docs out will continue to fund as scheduled. This is effective immediately.


"New loan applications will continue to be accepted however will be held until the temporary suspension on loan approvals and fundings has been lifted.


"We apologize for short notice and will be reviewing market conditions and updating our policy on a daily basis.


"If you have any questions, please contact NovaStar."


Amazing, we’ll follow this breaking story as it develops.


15 Responses to “News Flash: NovaStar Suspends Funding Immediately”


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1 CT
Aug 3rd, 2007 at 4:26 pm
Good…Novastar screwed their net branch owners….they get what they deserve.


2 Chris Lopez
Aug 3rd, 2007 at 4:34 pm
Novastar is not the only one that has suspended thier funding and approval activity, there are about 20 other companies relying on wall street that had suspended thier activity this morning. Subprime lending is in jeopordy, we might have to do away with it in order to save the housing industry. We might have to start kissing up to our good old friend FHA…It was fun while it lasted.


3 HAHA
Aug 3rd, 2007 at 8:02 pm
HAHA. SEE YA NFI. So glad I am seeing this.


4 Schahrzad Berkland
Aug 3rd, 2007 at 8:10 pm
Will CalFHA and VA and HUD and FHA loans be of any use in the CA market?

Where will those agencies get the money, if the demand for their bonds is way down?

China, the largest purchaser of conforming bonds, stopped buying them in May.

The market for conforming loans is a fraction of its former size,a nd there is not a damn thing we can do about it, except as a nation start saving so we can provide capital for our economy.

Our spending exceeds our wages, our consumption exceeds our productivity. This cannot be cured by printing even more money or making lower interest rates, because that will just exacerbate the problem.

I don’t see any way out. Housing is dead. But don’t worry. You only need to do X loans per month to support yourselves. So your internet presence will get you a steady market of clients, and you will still survive. Just get your X loans per month, and don’t worry about the big drop in demand.


5 Morgan Brown
Aug 3rd, 2007 at 8:21 pm
Chris - you are right. I’ve been swamped and just posted an update. NovaStar was the only one I could get out before my day became one of fielding calls and emails - thanks for your comment!


6 Jillayne Schlicke
Aug 3rd, 2007 at 11:30 pm
We will always remember 2007.
And 2008, 2009, 2010, and 2011.

I am seriously concerned that this is all going to end up in our local broker’s laps with buyback provisions on the way and next we’ll be reading about local retail brokers folding, laying off thousands more.

When the bloodbath is over, who will be left to remember what 2007 was like, so we don’t ever re-create this god-awful mess?

The investors investment bankers and the wholesale lenders don’t care about the retail loan originators.

Remember that.

It’s up to those left to lead us out of this hell.

Who will you follow? Another corporate leader promissing a six figure income with no training?

WHEN will the industry decide we’ve had enough and increase the barrier to entry, require mandatory pre-licensing education, a tough competency exam, and mandatory fiduciary duties owed to consumers?

If we don’t do it ourselves, the government is going to step in and do it for us. Do you LIKE RESPA and Truth in Lending? If so, get ready for more harsh government regulations.


7 Morgan Brown
Aug 4th, 2007 at 4:30 pm
Jillayne - Great post. I’m glad you expressed similar sentiments over on RCG. It is so true. Loans will come flowing back down the channel, local companies will tank and their will be a whole rewriting of the lending model. This will be transformational.


8 Gregory Hartley
Aug 4th, 2007 at 9:07 pm
Not only does broker licensing (along with pre-licensing and continuing education) make sense, it should be mandatory in all states. Another thing that would have lessened this problem if not eliminated it altogether would have been stiff appraiser backbones and no lender pressure. As an appraiser, I have lost many clients because I “cut the value,” their words not mine. I have never been afraid to stand up for what is right but there are too many appraisers who are afraid of losing clients so they will bend over for every mortgage broker that pops up. It is not just the appraiser’s fault. Broker bullying and appraiser shopping does nothing to help the appraiser remain independent and disinterested. No appraiser wants to lose a client but with all the competition from brokers, even mortgage bankers are not afraid to pressure their appraisers for increased values. This is the kind of junk that has caused the loss of professionalism and credibility for appraisers. When the regulatory agencies come knocking at the door do you think the broker or the banker will stand up for their appraiser? Hell no, they will turn on them like a junkyard dog and leave them twisting in the wind. Why do you think appraisers carry E & O insurance anyway?

Greg Hartley
Blue Moon Appraisals
Birmingham, Alabama
Offending Since 1993


9 Concerned for Employees
Aug 5th, 2007 at 12:41 pm
I just want to reiterate that this is a temporary suspension. NovaStar has told its employees that they are suspending until Tuesday and then will decide where to go from there. With all of these lenders going out of business, don’t forget that it affects the employees and their families (mine included). If the company is no longer funding loans, the sales force doesn’t make money. No money transfers into further complications with the economy as other bills aren’t paid. You might not like NovaStar or sub-prime lenders in general, but it become very personal when your income is abruptly haulted by an e-mail from the CEO.


10 Sean
Aug 5th, 2007 at 5:50 pm
I’m not so non-plussed about these recent events as much as the “just-found” piety of most in recent days inasfaras…ethics in business, getting “good loans”, and educational and licensing requirement strengths.

NAMB has been preaching this for years, but who gives a rip when you can become banker and thumb your nose at licensing and education requirements? And who just gets fleeced when there’s not a level playing field for originators? Not just the customer (HINT: investors too).

I’ll cut this short so not to make another long i-told-you-so rant. However, I hope to see more walk than talk when people posture over licensing and education requirements.

In other words, until banks need to be under the same regs as brokers, stuff it.


11 eric woodham
Aug 6th, 2007 at 5:22 am
Amen to Greg Hartley, the appraiser.I have been brokering and banking since 1989. Three things have killed the industry. Rouge brokers/bankers who got into the business n the mid to late 90’s, seeing that there was more money selling mortgages than used cars(Ameriquest is a great example), Appraisers who sold their soles for the dollar, and investors who got down right greedy(probably applies to all three). The losers in all of this mess is legitament buyers/homeowners who now are scrambling (and maybe it will weed out some of the realtor trash also).


12 Mary Ann
Aug 6th, 2007 at 9:14 am
My question is, where did the funding money come from and the insurance for that money (what country) to allow a bunch of stock brokers to make up their own rules on how mortgages should be issued. If a lender baits a broker with a 2% premium on delivering a neg am option arm NO DOC no matter the occupancy, there is something wrong. How were they allowed to go against the bread and butter guidelines set forth for decades (sure some twists here and there). If a borrower can’t pay their debt on time they cant buy a house with a mortgage. Period. Down payment equals good payment history. Buyers need stop signs to help them NOT get in over their head. This loss is several billion dollars and rising. What a nightmare. Anyone remember when FHA/HUD shut down? We thought that was bad.


13 Chuck B.
Aug 6th, 2007 at 9:20 am
I currently have a loan in underwriting with NovaStar, approved and locked last Thursday morning for $427,000. All conditions cleared last friday.

I just got their email this morning and I’m trying to convince them to go ahead and close me out. This really sucks!!!!

1 A Quick Recap: The Day The Credit Died at Blown Mortgage
Pingback on Aug 3rd, 2007 at 8:20 pm



http://blownmortgage.com/2007/08/03/news-flash-novastar-suspends-funding-immediately/


Email me directly: mbrown@newdaytrust.com

« Older Home Loading Newer » The Ultimate Guide to the Housing Meltdown
Published at August 6, 2007 in Weblogs.



Dr. Housing Bubble at his excellent, eponymous blog has assembled a thorough compendium of the blogs and web sites tracking the housing crisis. The list covers the gamut of destinations on the web for up-to-date information and commentary.


This is an undertaking far too time-consuming for me - but I am glad that Dr. HB did it. Make sure Dr. Housing Bubble is in your feed reader and double check your list of sites to ensure you’ve got comprehensive coverage during these historic times.


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Aegis Suspends Funding (Unofficial)…
Published at August 6, 2007 in Mortgage News/Insight.
UPDATED 8/6 2:45 pm PDT


According to the folks over at Implode-O-Meter Aegis is closing its doors. However, American Banker is reporting that the company is suspending funding but has not closed. From the American Banker article (subscription):


Pat Wendt, the spokeswoman, said Aegis has not closed any branches. It is unclear whether the company will be able to fund applications currently in its pipeline, she said.


From the Implode-O-Meter site:


Update 2007-08-06, Aegis Wholesale closing: We have received numerous tips this morning regarding Aegis Wholesale closing their doors today. This Broker Outpost thread is detailing the closure as information is coming out. One poster there notes: I just got off the phone with my rep, today is everyones last day, they are handing in keys and security passes. Not funding anything. They were my main A paper lender. Any suggestions on an A paper lender that will weather this, I have to place some loans quick. We have received numerous tips this morning regarding Aegis’ closure. For example, one informant forwarded the following email from an Aegis rep: At this time Aegis has suspended all operations. No further information is available at this time. We will forward any information as it becomes available. We are awaiting official word of the closure. At this time, nothing has been noted on teh Aegis Wholesale website (aegiswholesale.com). If you receive official word of the closure, please send it our direction.


We’ll let you know if we hear anything more over on our end.


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Option One Layoffs?
Published at August 6, 2007 in Mortgage News/Insight.


I just got this email from my account executive at Option One. I have no idea how extensive these layoffs are or if they just didn’t do a good job and are using the recent conditions as a scape goat - but I thought I’d pass it along in case any one else heard anything as well. Please note I cannot confirm if these are wide-scale or not at this time.


It is with a heavy heart that I let you know that I am no longer with Option One.


We know the subprime market has been volitle in recent months to say the least and this last week was even worse.


Option One has made the decision to cut much of it’s sales force and I am one of the ones that will be going.


I am not sure how long my email account will be working so I atleast wanted to get you a quick email.


Thank you for all your business, it has been a pleasure working with you and good luck with everything.

Account Executive

Option One Mortgage

www.optiononebroker.com


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How To Torpedo Your Mortgage Company in 15 Easy Steps
Published at August 4, 2007 in Random Thoughts.


Here now is Blown Mortgage’s definitive guide on how to kill your mortgage company in 15 quick-and-easy steps. For all you folks wondering how all these companies and brilliant executives got so good at going out of business this one’s for you!


How To Torpedo Your Very Own Mortgage Company


1. Get really big. Be sure to hire lots of unqualified loan officers and sales managers to keep up with the massive turnover and overhead. Make sure all loan originators and sales managers are provided Boiler Room, Glengary Glen Ross, and Wall Street as training guides. Post at least one reference to Always Be Closing somewhere on every production floor.


2. Become a direct lender. None of this brokering crap. Get a big warehouse line of credit and get as many of them as you can. The more millions the better. Load up on warehouse credit access. Ask for more. Sign personal guarantees if you have to. Sign the correspondent lender agreements with your banks. Don’t read the fine print. Ignore early payment default and loan buyback provisions. Sign up with as many banks as you can.


3. Get a huge cadre of brokers. Hire sales people to pound the pavement. Give them ridiculous quotas to hit and incentives for signing up new brokers and driving production. Sign up any broker you can find. Under staff the approval process, steal your broker agreement from someone else (why read this one either?) Get as many loans coming in as possible.


4. Advertise aggressive underwriting. Push underwriters to process more files. Accept “alternative” documentation. Don’t verify anything. Do lots of stated/stated or no documentation loans. Become the leader in those type of loans. Do a lot of “niche” products that no one else has. Become known for “getting the hard files done”. Teach your sales people how to work around underwriting guidelines. Pressure underwriting, compliance and legal to stay out of the way.


5. Sign up with investors who offer the biggest spreads. Find the investors who offer the biggest spreads, largest volume incentives and loosest underwriting. Agree to sell all of your loans to them. Push as many borrowers in to the large-spread products for maximum profit with out regard to benefit to borrower. Push all employees to hit volume caps. Get fat incentive paychecks from the lenders. Eschew traditional banking company relationships with depositories in favor of aggressive comp structures.


6. Load up on a bunch of crap loans. Fund a ton of stated/stated loans, 100% LTV loans, investment property loans, condominiums, alt-a and subprime loans. Fund away - you’ve got plenty of bidders and buyers. Load up your warehouse lines, use up your credit. They’ll be more - your warehouse bank account rep promises to give you a temporary line increase if you need it.


7. Put your loan pools out to bid. Expect 102 or 103. Expect investors to jump at a 100 loan pool of stated/stated loans and 100% 80/20 piggyback combos. Expect to be paid a premium. Expect to clear up the warehouse line for the next month’s fundings.


8. Get no bids. Freak out. Try to get 100 for your pool. Not there. Try to get 99, 98, 97 - not there, not there, not there. The investors don’t want your pool. Revise your pool, pull some loans out, restructure it. No good. No one wants your loans any more. Try to get an offer on the scratch and dent market. Get offered 70. Realize you can’t take a 30% hit on your loan pool. You have very little capital and net worth.


9. Max out your warehouse lines. Max out all available credit. Have 100’s of loans ready to fund with no money to fund them. The warehouse bank won’t give you any more money.


1o. Stop funding. There’s no more money to fund. Make panicked, unsuccessful attempts to secure more warehouse credit to continue funding. Realize that there is no revenue with out any funding. Count the interest accruing on your unsold pool of loans. Watch the money dry up right in front of your eyes. Watch your entire operation seize up. Show up on ml-implode.com.


11. Hold an executive meeting. Realize you’re screwed.


12. Try to find a buyer for the company. Go hat in hand to your warehouse creditors, correspondent lending partners and anyone you can think of. Offer your company for pennies on the dollar. Plead for someone to buy you.


13. Get no takers. Again.


14. Run out of remaining money, fire everyone. Run out of operating capital as funding ceases. Face fees, margin calls for the borrowed money. Face payroll with an empty bank account. Fire everyone immediately. Consult bankruptcy attorney ASAP.


15. File bankruptcy. Find a new job. Who’s hiring?


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Condo Owners May be the Next Ones Out
Published at August 3, 2007 in Real Estate Musings and Mortgage News/Insight.


Option One just sent out an email to wholesale partners that outlined changes that they’ve made in response to today’s market action. I assume that I’ll be getting these through the weekend, so I’ll try to do summary posts instead of one for each bank - otherwise I’ll have a lot of cut-and-pasting to do. Here is one important change Option One is making; is this the canary in the coal mine for condo credit?


Florida Condos: Option One will not accept submissions secured by condos in Florida.


We already know that the condo market in Florida is decimated. We know that there are condo ghost-towns in new Florida towers. We know people are upside-down in their condos. We know that Alt-A is squeezed out of the market. We know that subprime is getting scarce. Are condos in for another round behind the woodshed? Are areas like Las Vegas, Phoenix, and San Diego (and other big condo markets) in for another dive? If condos are the favorite muse of investors, and investors are letting upside-down properties go; where are condo prices going to settle out in all of this? And how much will that uncertainty affect credit availability for condominium properties? If condos are cheaper to buy than homes and now credit is not being extended to them at all; what will people buy?


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IndyMac Details Massive Program Changes in Friday Night Email
Published at August 3, 2007 in Mortgage News/Insight.


I guess this is kind of like reporting after the markets close, right? Or did they just have to finally let their stressed out secondary team go home for the night? Check out IndyMac eliminating some of its favorite programs such as the popular 12 MTA Pay Option loan. That was an iconic IndyMac loan - now gone the way of the dodo.


Dear Valued Customer,


In response to recent liquidity issues in the secondary mortgage market, we have found it necessary to revise a number of our program limits and underwriting guidelines. The following revisions became effective for loans that were not rate locked prior to 12:00 p.m. Pacific Time today. The Indymac Lending Guide will be updated to reflect the changes shortly.


Loans affected by the revisions below but rate locked prior to the effective date will be accepted and funded provided all QuickPricer® ratelocks are converted to full e-MITS® submissions by August 10, 2007 and all credit packages are delivered to Indymac by August 17, 2007. In addition, there will be no grace period or “auto-extensions” for clearance of conditions after the rate lock expiration. All loans that were previously delivered and not ratelocked are subject to the revised guidelines.


Program Revisions - Multiple Programs


The following revisions apply to the following programs, where applicable:

• Alt A - Standard Products with loan amounts that exceed the current conforming loan limit

• Alt A - Super Jumbo and Ultra Jumbo Program loans - all loan amounts

• Alt A - Pay Option ARM loans - all loan amounts

• Construction to Permanent Loans with loan amounts that exceed the current conforming loan limit

• Consumer Residential Lot Loans - all loan amounts

• HELOCs - all loan amounts


Documentation Types:


• Stated Income documentation is available only when one or more of the borrowers is
self-employed for loans with the following characteristics:

• LTV or CLTV greater than 70% or

• Decision Credit Score is less than 700


Stated Income remains available for borrowers with all types of income when the LTV & CLTV are less than or equal to 70% and the Decision Credit Score is 700 or greater.


• FastForward, No Ratio, NINA, and No Doc documentation types have been eliminated.


Maximum LTV/CLTV: For Alt A - Standard Products, the maximum LTV/CLTV is 95%. For the Lot loan program, the maximum LTV is 80%.


Minimum Decision Credit Score: A minimum Decision Credit Score of 640 is required, unless a higher score is specified in the applicable program limit table.


First Time Homebuyers:


• The maximum LTV/CLTV is 90%

• The minimum Decision Credit Score is 680

• Not eligible for Construction to Permanent loans or Lot loans


Pay Option ARM Products: The following products have been discontinued:


• 12 MAT

• 40 Year 12 MAT

• FlexPay 12 MAT 1 Year

• Flex Pay 3/1 LIBOR


The Flex Pay 5/1 & 7/1 LIBOR products remain available.


For further questions, please contact your Indymac Bank sales representative.


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A Quick Recap: The Day The Credit Died
Published at August 3, 2007 in Wall Street and Mortgage News/Insight.


Dear readers - what a day. I wish I could recap everything that happened, and I might get to it this weekend; if I try now I will have been working or on the phone or responding to email or writing for the last 13 hours straight and my wife will kill me - literally. So here is a quick recap:


A commenter correctly said that NovaStar was not the only one that ceased funding today; many other lenders did as well. Here is a quick summary of those that I know who temporarily (unless otherwise noted) pulled the lending plug today:


NovaStar temporarily suspends funding due to “severe secondary market disruptions”.

1st National Lending Services suspends all of the following products: Jumbo, Alt A, Pay Option Arm’s, and Seconds indefinitely (email to brokers) and throws in a round of layoffs for good measure.

First Magnus suspends all jumbo ARMs and expanded and niche products (email to brokers)

Credit Suisse Wholesale suspends Subprime, Second Lien, Choice Payment ARMs and all 2 and 3 year ARMs

Wachovia pulls out of Alt-A temporarily

Wells Fargo pulls out of Alt-A

Aegis Wholesale suspends option ARMs, expanded Alt-A and second lien products (email)

Homecomings eliminates rebate on all Option ARMs (email)

Countrywide increases pricing and fees on the LTV/FICO/

Documentation type grids for all documentation types, adjustments for Subordinate Financing, Cash out transactions and larger loan balances (email)

National City makes changes

IndyMac increases pricing and spreads on Alt-A products

American Home Mortgage workers pack it up

Fieldstone stops funding

Bear Stearns says its the worst they’ve seen it in 22 years


And to cap it all of Cramer melts down on air on CNBC; so much so that the network needs to throw up a disclaimer or as a new friend called it DisCramer.


Get that guy a single malt scotch ASAP!


What a Friday. So now the question becomes - Will the Fed cut rates on Tuesday to calm the credit market? What are your thoughts? I have my own but I’ll save them for later.


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Link: http://www.blownmortgage.com

Housing Bubble News > August 2007 > Ml-implode.com Lawsuit: A Threat to Freedom of Speech on the Internet


Ml-implode.com Lawsuit: A Threat to Freedom of Speech on the Internet
Aug 03, 2007



Loan Center of California has filed a lawsuit against The Mortgage Lender Implode-O-Meter (Ml-implode.com) in a thinly veiled attempt to shut the website down. The lawsuit is not only frivolous, but a direct threat to everyone's freedom of speech and the right to discuss matters of public concern on blogs, forums, and other places around the net.


Imagine large corporations, and possibly the government, taking on bloggers and individuals who like to share their passion for a topic by writing articles or posting comments in forums. Imagine these same corporations telling you that you can't express your opinion because you are placing an unwanted spotlight on a certain company or situation. This is exactly what is happening in the ML-implode lawsuit.


Lawsuit Summary


In response to a posting on Ml-implode.com (which was later removed the same day), Loan Center of California (LLC) filed a lawsuit against the website in May. LLC alleges that Washington Mutual and Credit Suisse withdrew $4 million in funding as a result of the posting on Ml-implode.com LLC is seeking an unspecified sum in excess of $50,000.


The suit is a blatant attempt to silence Ml-Implode.com using the legal system, and poses a direct threat to the freedom of speech of bloggers and other online scribes.


What is The Mortgage Lender Implode-O-Meter?


If you aren't familiar with The Mortgage Lender Implode-O-Meter, here is a little background:


Ml-implode.com was started by Aaron Krowne in December of 2006. Since that time, the site has kept track and posted information about mortgage lenders who are going bust, a.k.a. imploding.


The site has had millions of visitors, has been cited on Bloomberg, CNBC, Wall Street Journal, and eFinanceDirectory.com, and has publicized the implosion of 109 major U.S. lenders to date.


To learn more about The Mortgage Lender Implode-O-Meter, check out our exclusive housing finance breakdown interview with Ml-Implode.com's Aaron Krowne.


The Lawsuit


In May, Loan Center of California (LLC) filed a lawsuit against Ml-implode.com (Aaron Krowne and Krowne Concepts, Inc.) alleging that a post on Ml-implode.com resulted in a loss of funding from Washington Mutual and Credit Suisse.


Strangely enough, the post was merely an anonymous email that indicated LLC was having trouble with their business model. After confirming that LLC was indeed having trouble-in a mainstream media article, LCC CEO Eduardo Blanche himself said the company was having difficulty selling loans on the secondary market--Ml-implode.com posted the email on their website.


LLC claims that WaMu and Credit Suisse withdrew funding as a result, and demanded that the post be removed immediately. Ml-implode.com responded by asking LLC to provide a statement that could be released to the public to dispel claims against the lender.


LLC of course refused, and decided to file a lawsuit instead, requesting an unspecified amount in excess of $50,000 as compensation for alleged injuries to their business.


A motion to strike the suit was then filed by Ml-implode.com under California's Anti-SLAPP (Strategic Litigation Against Public Participation) statute. This statute protects small businesses from corporations who seek to use the legal system to silence discussions that are matters of public concern. While small businesses are supposed to be protected under the First Amendment, such lawsuits are enough to financially devastate a business.


Under California's Anti-SLAPP statute, an outright dismissal of LLC's suit is called for. Unfortunately, Judge Franklin R. Taft made the decision to issue a tentative denial of Ml-implode.com's motion for strike.


According to the judge, the posting did concern a public issue, but is not protected under the Federal Communications Decency Act as it was not an exact republication of a third party email and supposedly contained statements by the defendant.


Aaron Krowne of Ml-implode.com referred to the ruling as 'disappointing' and 'puzzling'-two words that sum up the situation up perfectly.


A Final Note


We believe that lenders with reckless lending practices should take responsibility for their actions rather than offloading blame onto independent websites.


What this lawsuit shows us is that any blog or website with an opinion could be at risk of becoming a scapegoat. If you have your own website or blog, and feel like this couldn't happen to you because you have a well-worded disclaimer somewhere on your site, think again. Since their inception, Ml-implode.com has had several disclaimers posted in multiple locations around their website. The disclaimers vary in wording, but basically all say the same thing:


We are a public forum, information on the site is provisional, and all readers are urged to verify information found on the site.


Unfortunately, the disclaimers were not enough to stop Loan Center of California's nefarious attempt to drain the limited resources of a valuable web resource. They were also not enough to convince the judge in this case to dismiss the suit under the Anti-SLAPP statute.


And the scary thing is that the same thing could happen to you and every blogger you know.


After all, the lawsuit against Ml-implode.com isn't about mortgages; it is about freedom of speech. If LLC wins, it opens the door for other lawsuits that are meant to stifle the whistleblower. You can bet everything that you hold dear that other corporations will be quick to follow suit. And unless an online scribe has the unlimited funds necessary to fight off a corporation in a lengthy legal battle, that aforementioned scribe will be silenced.

--------------------------------------------------------------------------------


We at eFinanceDirectory.com strongly believe in the right to freedom of speech. We urge you to show your support for this right by passing on the word, and if you can afford it, donating to Ml-Implode.com's cause. Remember, their cause is everyone's cause.



Link: http://www.reddit.com

Just in...


National city Home Equity Stops Taking Loans:


http://www.marketwatch.com/news/story/national-city-home-equity-stops/story.aspx?guid=%7BA0A40B9A%2D589C%2D40C9%2DA580%2D3C171532FC3A%7D&dist=MorePulse


And Franklin Trust Halts Redemptions At Fund Amid Subprime Concern:


http://www.bloomberg.com/apps/news?pid=20601085&sid=azNwjyV3aReg

There's more...


http://data.nationalmortgagenews.com/columns/hearing/


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What We're Hearing

By Paul Muolo


I'll put it bluntly: if you operate a non-depository mortgage firm (lender or servicer) and don't have a deep-pocketed parent or hedge fund as a sugar daddy you're likely to be out of business by year-end, probably sooner. In the 20-plus years that I've been covering residential finance I haven't seen a financial meltdown this swift since the S&L crisis of the mid-to-late 1980s. One subprime executive who closed his shop a few months ago told me, "This is a liquidity crunch the likes I have never seen." Meanwhile, the mudslide is rolling downhill from Wall Street to mortgage bankers, to loan brokers, and then the consumer. Nomura Securities is winding down its mortgage conduit and three major Wall Street firms are preparing to slash their mortgage desks and or conduits…


And consider this: On Friday, Wells Fargo had hiked its jumbo loan rate to 8%. (This is the same Wells Fargo that up until a few months ago was overstating its subprime correspondent purchases so it could garner bragging rights to being No. 1 in subprime.) Meanwhile, Countrywide Financial Corp., considered a bedrock of the industry, is tightening up requirements on warehouse credit doled out to its correspondents. (For the full story see the Monday edition of National Mortgage News. Don't subscribe? Call: 800 221-1809) …


In a short interview this past week, Countrywide CEO Angelo Mozilo told NMN that there will be just five "major" lenders left by the end of 2009…


It's also safe to say that 80/20 combos, stated-income loans and subprime payment-option ARMs are toast. As one lender put it: "There's no bid out there"…


Loan brokers in search of nonconforming financing are running scared. Visit the Grapevine at NMN's BrokerUniverse website to read the panic and anxiety. (If you want to escape the bad news check out Georgiana Lee's “Quality Time” column. It's the only “good news” that we have for you.) As one broker posted: "Looking for more lenders. We are a small brokerage in Vermont looking for lenders. From conforming, alt-A to subprime. If you are out there please contact me." BrokerUniverse's Grapevine can be found at http://www.brokeruniverse.com/grapevine…


On Thursday afternoon NMNOnline (MortgageWire) was the second news organization to report that American Home Mortgage would close. (Newsday posted the story on its website first.) We would've beat Newsday except that the internal e-mail sent by CEO Michael Strauss to employees began with "Dear Colleges." We saw the typo and just assumed it was phony. A source inside the company later explained to us that it was indeed a typo by Mr. Strauss…


How full blown is the subprime crisis now? Not only is the story on the network nightly news (a big deal) but Comedy Central's “The Daily Show” did an amusing piece on the subprime industry and how it caters to minorities. See last Wednesday's show on YouTube…


Another thing spooking the industry is the second-quarter loss posted by service provider/title insurance giant First American Corp. FA took a $342 million provision for losses in its title insurance division during the second quarter. The provision includes a boost to reserves, which reflects a change in the estimate for expected future losses from policy years 2004 through 2006. Some observers wonder why FA's loss is so large -- and the losses at some lenders (the ones still standing) have been so small…


More bad news: mortgage companies have cut their payrolls by nearly 46,000 employees since October, including 7,400 full-time positions in June, as the slowdown in mortgage originations, particularly subprime loans, is forcing a retrenchment…


Clayton Holdings, a mortgage analytics/consulting firm, earned just $500,000 on revenue of $43 million in the second quarter, noting that the industry's subprime securitization volumes fell by 42% during that time. However, it experienced strong growth in its “surveillance” business. Meanwhile, Clayton has been subpoenaed by the New York State attorney general as part of its investigation into subprime lending…


If you're a baby boomer working for Fannie Mae take note: On Aug. 10, Fannie employees 50 years or older who have been with the company for five years will have the option of staying with the GSE or taking a buyout package. Employees choosing the buyout will receive 26 weeks severance pay plus three weeks pay for every year of service…


Whole loan prices for payment-option ARMs -- not surprisingly -- have yet to rebound, according to BankUnited of Florida. In its recent earnings statement the depository said that during the second quarter it elected to hold POAs in portfolio rather than sell them into the secondary market. The lender said it deemed "these gain-on-sale margins" as insufficient. BU is a large originator of POAs…


Coming up: subprime lender Delta Financial Corp. will report its second-quarter financial results before the market opens on Wednesday…


California is on top again -- in home foreclosures, that is. According to RealtyTrac Inc., foreclosures in California jumped by 170% in the first-half to 104,572 units. Nationwide, lenders sent notices of default, scheduled auctions or repossessions on more than 574,000 properties during that time…


MORTGAGE PEOPLE: The PNC Financial Services Group named Diana Reid executive vice president and head of PNC Real Estate Finance. Ms. Reid will be responsible for units that specialize in portfolio and securitized lending, agency finance and other areas. NCB named Denise Urban assistant vice resident and assistant loan review manager for its risk management team.


DATA NOTICE: If you're trying to figure out where the mortgage market is headed and what the business will look like for the rest of the year you're in luck. NMN has just published the brand new Mortgage Industry Directory, which ranks the nation's top 400 lenders, 300 servicers, top 85 subprime and much, much more. The book also provides a special analysis on America's subprime crisis. To order, e-mail Rebecca.Keen@SourceMedia.com or Delores.Stokes@SourceMedia.com. Also now available: the brand-new Mortgage Broker Database, which ranks the nation's top 100 brokers and provides contact info for 2,000 active brokerage firms. For more info, e-mail Deartra.Todd@SourceMedia.com. According to the first-quarter edition of the Quarterly Data Report, 18.76% of all subprime mortgages are delinquent, based on unpaid principal balances. Ask Deartra about the QDR as well.

Godlike Productions is doing an excellent job of informing mainstream America about the lies the mainstream press and real estate industry are trying to put over on the gullible public. Also, the website Blown Mortage is doing a bang-up job of "telling it like it really is".


No matter what "good news" the MSM puts out (like the WSJ owned by Rupert Murdoch, lol)... the US housing market is in a very deep black hole, and many innocent and trusting people are being taken down with it... and it is just beginning.


As a mundane astrologer, I will tell you this... the US housing market is dead-in-the-water when Pluto enters Capricorn (late January 2008) approaching T-square to the US natal Saturn in Libra and all national Cancerian planetary placements... that is, if the real estate market does not die earlier (like now).


I feel that, as a psychic and astrologer, I have a responsibility to tell you the *truth* here. I have no vested interests in any of this. My husband Magi and I are on property we solely own (for years) and we are not "into" the US housing market in any way.


GLP has this thread up today (August 7, 2007), "TIME TO POST ALL THE DEAD & DYING LENDERS - HERE":


http://godlikeproductions.com/bbs/message.php?messageid=421223&mpage=1&showdate=8/7/07&forum=1


Also, GLP has this one up today:


http://godlikeproductions.com/bbs/message.php?messageid=421402&mpage=2&showdate=8/7/07&forum=1

Magi and I just got this financial advisory from Chris Laird over at Prudent Squirrel:

*******************


Since the advent of the Bear Stearns troubles, liquidity has been drying up and is scaring markets. Not only housing mortgage derivatives and that market, which is humoungous and leading to very serious losses world wide, but also the corporate bond market has stopped in major sectors.


As I have said, the USD appears to be bottoming again and is up nicely today - 80 is being defended by - whomever


I saw a very interesting notice about the fact that the Japanese stock market is peaking - and showing deflationary tendencies.


In deflation currencies strengthen.


There appear to be very large macro economic forces leading to a stronger USD and Yen - the yen in particular. This means more market liquidations, on top of the already existing concerns about the liquidity situation that is deteriorating and is being (from what I gather) hushed up.


The US stock market is poised to be the next victim of these sell offs, as these are rotating around the world in a syncrhonized world market - one down, then a week later another market is down and so on.


At some point, there will be a serious world sell off and my prognosis is quite bearish in the next several months for our markets.


Also, my long term prognosis for markets - over one year out - is quite bearish.


As long as the USD manages to hold 80 or close to it, maybe 78/9 gold will suffer significantly in the mid term during a market decline due to liquidity issues where funds sell gold for cash in market declines to cover redemptions.


Best


Chris

*******************

Link: http://www.prudentsquirrel.com

I'm still connecting the dots about the US housing market collapse/debacle.


Here's a very good link. It's called "The Mortgage Lender Implode-O-Meter"... "Tracking the housing finance breakdown - a saga of corruption, stupidity, and government complicity":


http://ml-implode.com/

Oops, here we go again (and again), this "up" from Motley Fool:

*******************


THE WORST IS YET TO COME

By Rich Greifner July 26, 2007


Remember the subprime meltdown last winter? Low-credit borrowers defaulted on their home loan payments in increasing numbers when their adjustable-rate mortgage interest rates reset. Shares of major subprime lenders like Countrywide Financial (NYSE: CFC) plummeted, while the most egregious offenders filed for bankruptcy.


Investors were pretty panicked -- for about a week. The market fell 5%, but quickly rebounded. Within a month, those losses were erased, and the major indexes were setting all-time highs by summer.


You call that a meltdown?

The market's resurgence was impressive, but let's not pat ourselves on the back just yet. The subprime episode wasn't a meltdown, a crisis, or a disaster. It was a warning, and we failed to heed it. The real meltdown is coming ... and its name is Alt-A.


No one knows for sure when the Alt-A implosion will happen, or how much damage it will ultimately cause. But the experts do agree on one thing: The Alt-A fallout will make the subprime situation seem like a minor chimney fire.


I have a few suggestions on how you can protect your portfolio, but first, let's get to know the enemy.


Pants on fire

If you aren't familiar with Alt-A mortgages, perhaps you know them by another name: These products also go by the charming moniker "Liar Loans," because many Alt-A borrowers overstate their income and/or assets and provide little or no documentation to secure their mortgages. Historically, lenders reserved Alt-A mortgages for borrowers with blemished but not irreparable credit. Accordingly, these loans carry an interest rate somewhere between prime and subprime.


However, in recent years, the Alt-A segment has evolved. Now it reflects the type of mortgage product rather than the credit quality of the borrower. Mortgage lenders have devised ever more risky "exotic" mortgage products, most of which fall under the Alt-A label. Interest-only loans were a particularly devious innovation. Worse still are "negative amortization" loans, where the monthly mortgage payment is based on a below-market interest rate for an initial period (think of a minimum payment on a credit card).


These exotic mortgage products aren't dangerous in and of themselves. The problem occurs when a borrower uses these products' lower initial monthly payments to qualify for a home that he or she otherwise could not afford. According to a recent Credit Suisse report, surging home prices and record-low interest rates over the past five years tempted many borrowers: In 2001, interest-only and negative amortization loans comprised 1% of total mortgage purchase originations. By 2005, that figure was 29%.


Prediction: pain

The recent influx of exotic mortgage products wouldn't be troublesome as long as mortgage lenders maintained disciplined underwriting standards (they didn't) and home prices continued to rise (they haven't). When those artificially low initial rates reset, the damage will likely be severe. But because these new mortgage products have never been tested in a stress scenario, it's difficult to quantify the potential impact.


Consider the dire prediction of Lou Ranieri, widely considered the father of the mortgage-backed securities industry: The subprime meltdown "is the leading edge of the storm," he said last March. "If you think this is bad, imagine what it's going to be like in the middle of the crisis." Between subprime and Alt-A, Ranieri estimates that more than $100 billion of home loans are likely to default.


Ranieri's forecast may turn out to be accurate, or it could be exaggerated. Either way, this much is clear: Many Alt-A borrowers will struggle to make their monthly mortgage payments. Some will lose their homes.


But wait, there's more

Alt-A lenders such as IndyMac Bancorp (NYSE: IMB) and homebuilders such as KB Home (NYSE: KBH) should continue to suffer, and the worst companies in these industries may fail. But even if most homeowners manage to make their mortgage payments, they probably won't have any disposable income left over.


That means we can expect soft sales at home improvement retailers such as Lowe's (NYSE: LOW) and consumer discretionary concerns such as Harley-Davidson (NYSE: HOG). In fact, you'll probably want to avoid all luxury-good manufacturers and any retailer with heavy consumer credit exposure.


Gimme shelter

However, there are certain types of investments that should weather the Alt-A storm just fine -- or at least better than most.
Dividend-paying stocks aren't the sexiest securities in a bull market, but when the going gets rough, these high yielders are tough enough to keep going. Look for established companies with strong balance sheets, a history of dividend increases, and a portfolio of products that will always be in demand. No matter the state of the economy, consumers will always turn to Kimberly-Clark (NYSE: KMB) for tissues, towels, and toilet paper. Similarly, Johnson & Johnson's (NYSE: JNJ) consumer health-care products will continue to be best-sellers. What's more, these companies sell their products in more than 150 countries and have a history of raising payouts to shareholders.


Note: Although author Rich Greifner is not a homeowner, he still feels the need to overstate his income. Rich does not own shares in any of the companies mentioned in this article. Johnson & Johnson is an Income Investor recommendation. The Motley Fool's disclosure policy will never default.



Link: http://www.fool.com

Hello Wasayo, I noticed on a post that you mentioned you and Magi own your own property (for years). Do you hold 'allodial' title to your property? I was just curious. I found this interesting website...I'll list it here, take a look, something to think about..

"The United States is still a British Colony", Chapter's 1-7

( http://www.atgpress.com/kifap/indexjm.htm )