strange, that with all this pall hanging over building, that WM, the largest mortgage lender in the country---maybe the world---continues to do well...explanation?
Asleep, about 2-3 weeks ago you wrote, Yuri exposed, saying that I was stupid enough to short SCHL the stock you were long. I told you that I was short at $53-54 and I didn't like their accounting, waiting for 10-Q.
Well 10-Q is out and SCHL is down $8 in 2 days so far. Sell it my young friend. this is just the beginning.
BZH --- I'll see you at book value.
now 'ya know 'bout your buddy...
I gotta' say, this board should be renamed bored...'bout as excitin' as white bread with margerine...ain't no there there...ain't no here here, either.
got all the life an' excitement of a pregnant leech...and yuri's countin' his BZH short profits for today---down .10 cents...boy's a real big operator. And his losses on WA and WHR, two of his confessed shorts, both up healthily in today's 207-point DOW run---another sign of this "sinking economy" and "collapsing housing market."
I'm putting this board on ignore...afraid to fall asleep at my computer.
Fannie Mae (FNM) 81.80 +1.10: This isn't really a story about Fannie Mae, so much as it's a story about
bias and the need to identify it. The market was awakened to sell-side analyst bias by the Internet bubble,
and to auditor bias by the Enron collapse. Despite these painful lessons, there is still a tendency to be
reactive rather than proactive when identifying bias. This point was evident when we saw a CNBC
anchor on Monday conclude an interview with Fannie Mae CEO Franklin Raines regarding a possible
housing bubble by stating that Raines is someone who ought to know whether or not there was a bubble.
We were dumbfounded by this statement. CNBC is currently fighting the last battle with its insistence on
analyst disclosure, but still fails to learn the bigger lesson that bias is lurking behind many different doors.
The notion that Fannie Mae's CEO is an objective observer of the housing market whose view is
authoritative is naive at best, and dangerous at worst. Fannie Mae has been in the midst of a political battle
over the past year to retain the implied government guarantee of its bonds. One of the primary arguments
made by critics of the government guarantee is that the mortgages which back Fannie Mae bonds are
increasingly risky, due to lax standards and the possibility of a housing bubble, and that the government is
bearing too much risk as a result. The government guarantee of FNM bonds is critical to the company's
wellbeing, and that government guarantee is threatened by the possible existence of a housing bubble. So
accepting a housing bubble analysis from the CEO of Fannie Mae as objective is outrageous. We at
Briefing.com actually agree with the Raines conclusion that there is not a housing bubble, but that's not the
issue. The issue is that consumers of market information must often fend for themselves. In this case,
CNBC not only failed to highlight the obvious bias inherent in Raines's view of the housing market, but the
anchor went so far as to lead the viewer to believe the opposite - that Raines was in a position to know
the issue best. Though many investors stung by past analyst recommendations and auditor certifications
probably didn't need a reminder, the phrase of the day is still "caveat emptor" when it comes to financial
market information. - Greg Jones, Briefing.com
Their time is coming!Will bad loans trip up housing?
Mortgage industry nonplused, but time bombs exist
CHICAGO (CBS.MW) -- The last five years have been the best of times for the mortgage business, an ideal credit market in which millions of buyers could qualify for loans and millions more homeowners could refinance debt at 40-year low rates.
But there may be flip side to the remarkable run of putting more people in homes and piling more debt upon their houses. It may not result in the worst of times in the coming years, but the fact is no one in the mortgage industry is really sure how much trouble lies ahead.
"Any time you have a situation where people buy things at the top of the market and are highly leveraged, the potential for problems is there," said Ronald Rosenfeld, president of Ginnie Mae, the secondary market agency for government-insured FHA and VA mortgages.
"But we do have policies in place that can get us over the bumps in the road. It's not of great concern to us," he said.
Small stumbling blocks
In fact, few of the leaders of the secondary market agencies who spoke at a recent Mortgage Bankers Association of America conference in Chicago were overly concerned about the prospects of thousands of newfound American homeowners finding themselves in foreclosure in the coming years.
"The information on delinquencies is mixed, though overall they are relatively stable," said Nicholas Retsinas, director of the Joint Center for Housing Studies at Harvard University.
But they did agree that some loan holders will run into trouble.
"Mortgage delinquencies are going to go up, even if the economy stays totally robust," said Paul Peterson, executive vice president in Freddie Mac's (FRE: news, chart, profile) single-family business. "The question is what level are they going to go up to?"
Peterson said the pattern for mortgage delinquencies has been constant for at least 30 years: Very few loans default in the first year, then the delinquency rate rises steadily before peaking in years four and five.
"People have their act together when they get a mortgage. But then they can suffer an illness, a divorce, a job loss -- things they didn't anticipate," he said. "But what really is a problem is when they put on a lot of consumer debt after (getting a new mortgage)."
There are two wild cards in the current cycle: Recently developed mortgage products that have helped put borrowers into houses who once might not have qualified for loans and the unprecedented refinancing boom of 2000 to 2001 that turned the delinquency-pattern clock back on millions of mortgages.
While innovative mortgage products directed mostly at low-and moderate-income buyers have made more Americans homeowners than at any time in history, the mortgages do not have much of a track record, and thus, make it hard to base delinquency projections.
Riskier borrowers get loans
"The subprime market has developed in the best credit environment we've ever had. And we don't have a lot of data to go on beyond the three to four years that has been taking place," Peterson said. "We have no data on how those loans will perform under stress."
And while the refinance boom has been a boon to most homeowners, some may not have been financially wise with their proceeds.
About 60 percent of those who refinanced Freddie Mac loans in 2001 took cash out of their houses in the transaction, "which is huge compared to any other time period," Peterson said.
"Tax law changes incent people to put as much debt on their home as possible, so they are probably paying off a lot of other high-cost credit with this money. I'm not sure I'd be too concerned about it."
But Peterson also points out lower interest rates have created a wealth effect for those who refinanced loans in 2001, adding $10 billion to their bottom line.
And rising home prices have added to that wealth effect, and made it possible for homeowners to grab money from the appreciated value of their houses and still hold mortgages with a smaller debt-to-value ratio, on average.
"In fact, the current loan-to-value ratio in our portfolio is just about as low as it's ever been (at 60 percent, meaning owners have 40 percent equity on average) and we're pretty comfortable with that," Peterson said.
My dear friend,
1) Y2Y new home sales are down
2) This year is tracking down below the previous one
3) Building permits and housing starts are down
4) Mortgage applications are down
5) Backlogs are flat to down
6) Mortgage dielinquencies are the highest since 1991
Stick around. I know I will.
4th quarter delinquency data (latest one)
"""On a year-over-year basis, mortgage delinquencies are still up 15 basis points over the fourth quarter of 2000," says Duncan. "Furthermore, the percentage of loans in the foreclosure process are up 19 basis points over the fourth quarter of 2000, and 9 basis points over the last quarter"""
Foreclosure? Banks taking people's houses. Too much consumer debt?
Think again and again and again, what will happen when rates go up.
March housing starts 1.646 mln (-7.8%), permits 1.599 mln (-9.9%).
Stronger than expected decline from an upward revision to Feb's strongest level since 1998.
!!!!!!!Single-family starts fell 11%!!!!! Early year strength partly tied to mild winter weather. Declines in all regions outside the small Northeast. 13% plunge in the powerful South hit the hardest. Permits running in tandem, 10% drop.