Reducing balances for borrowers who are current could open mortgage servicers to lawsuits from investors that hold the riskiest slices of bonds. Those investors would be wiped out if balances are greatly reduced. For that reason, "lenders are going to be especially reluctant to do short refinances on folks who are current," says Alan White, an assistant professor at Valparaiso University in Indiana.
You Can Thank Obama!
From the article: "But not every homeowner who is underwater can participate. The bank or investors that own the loan must be willing to write down its value."
I see no threat. Except to the gov that will be buying the repackaged loan. Nice try.
Was reading thru the thread, taking note of the tax cut comments and I hear Becky...and I quote..."Pres. Obama to announce new massive tax cuts to jump start economy" TFF....ya just can't make this stuff up.
Massive tax cuts and massive spending programs, the program of choice for BOTH BOTH BOTH parties, the road to ruin but the road WILL have some nice new asphalt to smooth out the ride to the cliff's edge.
I think they stay at 17 cents as well so they can have 1 full year of dividends at 17 cents. On the other hand CIM may raise the dividened thinking it is time for some "shock and awe" after 2 quarters of raising more capital through stock sales. Not a good time to be a shortie. IMO
No, they beat on earnings.
You're allowed to propagandize, especially if it's idiotic, which helps us Longs.
But you're not allowed to lie.
Market could be volatile this week, but CIM should really be insulated from the rest of the market, because anyone not a complete Ninny knows the next dividend announcement is days away.
This is actually very simple:
There's virtually no chance they are going to cut after great earnings.
So once again, they stay at 17, stocks does just fine.
They raise to 18, stock soars.
You want to stay short in the face of "headwinds" like these, you go right ahead.
But I think there are much better opportunities for you Fellas elsewhere right now. Many, in fact.
This one is clearly in the Long camp.
If the mortgage refinance program for loans currently owned by FHA agencies did not work, what makes you think this will work? To date, most of Obama's HAMP stuff did nothing. This "short refinance" phase of the HAMP applies to loans owned by lenders other than FHA agencies. There are a few catches. First, the current lender must agree to accept less that what is owed; that probably sounds okay for some lenders since they can get "market value" now -- albeit some hair cut. Unless the government is willing to give away money to make up for the losses, this probably eliminates most cases. And if there is a second mortgage, the second lein holders have to agree to get nothing. (The article did say this program won't work in such cases. Guess why?)
Second, the homeowner must find a new lender that believes the he/she is good for the new loan; sure the new loans will be sold to Freddie/Fannie, but they must qualify -- and most won't qualify. Forget the loan-to-value requirement, most of these people don't have sufficient income to pay a modified loan -- period.
IMO: This is mostly political rhetoric and has no real teeth.
This "news" is not new. It's been know for months.
Good read. Thanks and I totally agree.
The BS is about to end. Once again people will have to prove income and put some money in the game (down payment please). Being aRealtor I was getting sick to my stomack going to closings and watching as some put 0.)) down. I once saw a man walk away with 1k in his pocket.
BTW I am in NLY & DHY. Guideance(sentiment) on CIM here would be appreciated.
FYI: here's a better link with some details:
This will work for some higer-income people who do not have 2nd mortgages. But even they will have to live with damaged crdit.