Housing Bubble, credit bubble, public planning, land use, zoning and transportation in the exurban environment. Specific criticism of smart growth, neotradtional, forms based, new urbanism and other top down planner schemes to increase urban extent and density. Ventura County, California specific examples.
Wednesday, August 15, 2007
One Leg of the Stool
Amgen just announced restructuring and 2200 layoffs. THe CNBC breaking news guy couldn't help but mention that Amgen is HQ'd just a few miles from Countrywide.
And might I say, CFC taking another bath today really makes me smile. Can you hear it in the streets? Mo money mo money mo money. What is it now...29.30 short to 21.29 or some crap like that? And check out the after hours drop? Sweet....
Well come on. Don't tease us. The afternoon went exactly like I said it would. A 5 million trade and 30 mins later the absolute bottom. Did you pull the trigger?
Yeah, I had it set at 19.75 so sniff sniff...my sweet anchor stock is now gone:-( This is usually where people get greedy and try to short it again or even worse..state that it "can't get any lower" it's gotta be going up!
Nah, I'm done for awhile. 38,200 is enough for the amount of work I did...now THAT is passive income:-)
Thanks Rob, now just think, when H.Simpson agrees to buy that brown monstrosity house and allows me to be the bird dog..that's another 10K cold cash in my pockey...kaching kaching I'm telling you, it's like all these golden nuggets keep falling into my lap!!!!!!
Sweet passive income Legion! I read there is now a new class action suit against CFC for something or another. That's not surprising considering all the crap Mozillo has been spewing on TV and the print the last few months.
Ok fiancee said no to the strip club thingy..but OT, I just got a Magellan Meastro 4000 GPS, why you ask? Well, cuz I recently went on a trip and used one of these things in the Hertz car..and let's face it..that's a pretty sexy voice on there...now if only I could get my computer to talk to me like that!!
The timing of this is terrible. The gene jockeys were on the cusp on being able to rapidly and efficiently clone FBs (with slightly diminished cognitive skills per generation) who would have rescued the housing market. But no! The sharks in suits have to protect their bonuses.
WASHINGTON — A central California agricultural town, the automobile capital of the world and a down-on-its-luck gambling hotspot had the nation's highest rates of foreclosure filings for the first half of 2007, according to real estate data released Tuesday.
Stockton, Calif., Detroit and Las Vegas — three areas with vastly different economies and demographic trends — have all been hit hard by the nation's growing foreclosure crisis, which is ravaging both major urban areas and Middle America.
Averaging one foreclosure filing for every 27 households during the first six months of 2007, Stockton had the highest filing rate among the 100 largest metro areas of the United States, according to RealtyTrac, a real estate data firm...[link]
Sure would hate to be one of the early buyers in those areas holding on for their dear life as they watch all the greedy scumbags get floreclosed on around em, and pushing property values into the toilet. I mean look at fliptard..I sure would hate to be a neighbor living next to the green pool that like the great wall of china, can be seen from space...
As an early buyer I saw my zestimate go down by $70,000. Seventy thousand dollars. And it doesn't bother me. We aren't going back to 1995 prices or my refi at 4.99% either. I live in a nice place for less than what neighbors pay in taxes alone. I'm fully out of all my investment real estate and won't even look for another 6 months. In six months I figure we'll be able to tell a little better how long after that before optimizing best total returns. I'd rather buy before the bottom if the cash flows or the taxe breaks are needed for instance.
"Stockton, Calif., Detroit and Las Vegas — three areas with vastly different economies and demographic trends — have all been hit hard by the nation's growing foreclosure crisis, which is ravaging both major urban areas and Middle America."
How is that possible, since "all real estate is local"!?!?
@Edgar...oh yes, it will get worse...the ARM's haven't even adjusted yet
Just think, right now we are seeing all the dumbasses who bought more than they can afford or took out all their equity as they hit the proverbial fan. In the next year or two, we are going to see the morons who took out ARM's which will adjust in that time or interest only payments as they realize that they are upside down and can't refinance into better rates. That is when you are going to see 1 in 5 stockton houses in foreclosure. the property prices will go so far down people will just be walking away. Who wants to live in a ghost town? Or next to houses used by drug dealers vagabonds or even worse..Casey Serin.
lol at Stockton on realtytrac...in a 600 yard radius there are 64 properties for sale..any further out and it becomes "Too many properties to list..please zoom in"
Stockton is a Central Valley canary. Bakersfield to Sacramento is going "Okie Boomerang" over the next few years. The Crisp & Cole crimes are going to undermine the entire BKfield economy.
Countrywide Downgraded by Merrill Lynch, Bankruptcy 'Possible'
One day after Countrywide Financial Corp. (CFC), the largest U.S. mortgage lender, said foreclosures and mortgage delinquencies in July had risen to a five-year high, the lender was downgraded to “sell” by Merrill Lynch & Co., which raised the possibility of bankruptcy if the company loses access to short-term financing.
Last week, Countrywide’s Chief Financial Officer Eric Sieracki issued a statement to ease market concerns about its liquidity. He stated that, “Countrywide has longstanding and time-tested funding liquidity contingency planning. Our liquidity planning proved highly effective earlier during 2007 when market concerns first arose about subprime lending, and it remains so today.”
On the issue of Countrywide’s liquidity, a Merrill analyst today told Bloomberg.com that, “We cannot understate the importance of liquidity. “Effective insolvency” would result should creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash.”
The analyst added that, “If liquidations occur in a weak market, then it is possible for CFC to go bankrupt.”
Merrill had rated Countrywide a “buy” since April 2005.
CFC said it has access to about $187 billion in credit.
Chief Executive Officer Angelo Mozilo assured investors the company has enough cash to cope with the market turmoil, reported Bloomberg.com.
He further stated that CFC may even benefit as its competitors are forced out of business.
Sactown and Stockton have not reached bottom yet. Not in pricing and not in # of foreclosures. Lower prices to come and plenty of houses still to be foreclosured upon. It will not be a seller's market for a few years.
FMW, that was this morning. Interestingly the stock didn'y move on that news but on some other bit of company generated news around 2PM. That's when it cratered. CFC will be nothing but pain for everyone. The price will continue to fall and then somebody is going to buy a mess of calls way out of the money and then buy the company and be able to afford it based on the ill gotten gains on the calls. The stock is all one big green pool of algae.
CFC said it has access to about $187 billion in credit...
Well, la dee friggin' da! I'd be more impressed if they had $187 billion worth of qualified borrowers. There is a lot of ballast in the CFC keel, they don't need any more.
I wonder why people in LA & OC think that they will avoid the carnage? I think it will be worse when this wave hits. The harder the come, the harder they fall.
LA & OC think they have a case of "it'sifferent here" in the fridge. OC in particular is over exposed to real estate at every level. LA & OC also have one of the worst cases of boiling frog syndrome ever observed. IMO they've become really crappy places for the 80% of everything everyone does day to day. They just don't notice the little bit of quality of life they loose over time. The housing bubble will be the last straw. What remains will be seriously third world.
-------------------------- The housing bubble will be the last straw. What remains will be seriously third world. -------------------------
If it has the same vibrancy, fluidity , adaptability,pricing, pathos, ethos and other oz's as the real third world I might come back to LA. Meet ya on the way out perhaps ?
Edgar said... CFC said it has access to about $187 billion in credit...
Well, la dee friggin' da! I'd be more impressed if they had $187 billion worth of qualified borrowers. There is a lot of ballast in the CFC keel, they don't need any more.
Lol That's like Casey saying he had access to 2.2 million dollars, it may be true, but it doesn't mean they AREN'T up the proverbial creek without a paddle.
Bakersfield Bubble was noting only last month that David Crisp was waving a letter of credit for 1.8 billion dollars. Countrywide has so many commercial leases in the county commercial rents are gonna get crushed before residential.
Speaking of Countrywide, I discovered that the Fidelity Cash Reserves fund where so many people have money parked right now has a big ol Countrywide buttnugget.
Higher interest rates function as a tax on people who hold variable debt,” says Daniel Gross, reporter for The New York Times, a “truism that is particularly apparent to homeowners holding adjustable rate mortgages.” In his article, Gross cites Mark Zandi, chief economist at Moody’s Economy.com, who estimates that nearly $2 trillion in ARMs are due to reset by the end of calendar year 2008.
The top story on the LA Times web site is that Merrill says bankruptcy a possibility for Countrywide. Tomorrow will be a run for the exits. Could it be over by next week?
But outside Countrywide's offices in Calabasas, several employees said reports of credit problems at the company weren't making the rounds inside the company's huge headquarters complex.
"As far as we know, it's a stable company," said a 27-year-old technology specialist who said he had worked at Countrywide for five years and declined to be identified. "I don't know what the rumors are."
Geez, I wonder how many ENRON employees made that exact same comment just before finding out they were completely broke and out of a job.
the higher ups are going to keep positive bullshit going and rah rah attitude while they are unloading their stock behind their backs before it goes completely under...
Oh brother class action lawsuits against CFC..so what dat mean? The lawyers make 5 million dollars in fees which gets paid before any investors, and the investors get a couple of CFC t-shirts and a CFC fridge magnet...great.
If Countrywide is going BK... who is next? Goldman Sachs?.. why is the fed injecting so much money?.. to save their rich friends?... stay tuned.... this is just the beginning..
I'm in the liquor business. History has shown that when the going gets tough, the tough get drinking. My friends ITB tell me a lot of their Wall Street customers are switching from high-end Pinot to liquor. One customer who usually spends about $800 a week on wine is now buying a fifth of Smirnoff in the plastic bottle.
Liquor is a recession-proof business. What you no longer sell in high-margin, high-end product you make up for in volume sales of low margin crap.
I wonder what the returns would have been if you were to short all of the mortgage companies casey dealt with. Is there a list out there, I checked out casepedia but got nothing.
@TK (and everyone else): If you haven't already seen it, the following presentation, "Who's Holding the Bag?", is required reading; special thanks to the Value Quest blog for posting it:
Presentation was given roughly late spring, but it's dead-on. It also has an absolutely stunning graph on p. 27. Let's just say we're not even close to the bottom when it comes to foreclosures.
@Rob: "Bakersfield to Sacramento is going 'Okie Boomerang' over the next few years."
There's a certain rich irony to the thought of Californians packing up and heading out of state. Strap Granma's rocking chair to the bed of the truck and tell Ma and Pa and Rosasharn and the rest of the fambly to get in, we're headin' back to Oklahoma!
Unfortunately, if there ever is any exodus out of California, I suspect the prime destinations won't be in the Midwest, but rather whichever metropolitan areas still have a surplus of jobs--one of which would be D.C. As if it wasn't already crowded here. Oh well, at least we've got lots of shiny new condos going up. Lots and lots and lots of them.
And all joking aside..I'm really not liking the economic picture here. The dow has been getting creamed on a daily basis, it is becoming a meltdown of international proportions, and I think people are really going to start panicking.
Ok joking back on, at least I am in Montana and already have a survivor outpost for the coming apocolapyse. I am converting the 38 grand I made on CFC into gold coins....
PV, The sad parts are 1 you knew exactly what I meant by Okie Boomerang and 2 it is already happening. The lower middleclass exodous started in mid 2005 according to Dept Finance records matched to drivers licienses. 3rd you are correct. We are not going to repopulate the midwest. LV, PHX, Tuscon, and Austin and at the extremes St. Loius, ATL, and Memphis type places are the destinations. In the upper echelons (my neighbors) the PacNorWest seems likely.
My Mother in Law refinance her home with countrywide. She pulled out 1/4 of the equity for some repairs and what not. She has owned the home for over 20 years.
Does this countywide stuff affect her in some way - even down the road?
Peripheral Visionary, Nice link. Not to worry, the fed will bailout mbia and citi with our money. It's in the bag. The whole money system is a giant rip off.
Bee's Knees: The question you asked has been covered by a number of articles, but basically, a lender going bankrupt does not affect the people with a mortgage from that lender. Even if the company goes under, the mortgage contract is still intact, and may be transferred to a new company. The good news is that the new owners of the debt can't change the terms of the loan (like change the rate or the payment structure); the bad news is the money is still owed and the payments still have to be made.
If a lender goes into bankruptcy, the mortgages will be sold to another entity, who will take them over in their entirety. The only difference the homeowner will see is a different mailing address to send the mortgage to. The new entity can't force any changes to the loan, even if the homeowner is "underwater" (e.g. owes more than the home is worth.) The new entity may want to renegotiate, but that may or may not be a good deal, and the homeowner has the right to stay with the original contract.
In short, the home is perfectly safe as long as the mortgage payments keep getting sent according to the payment schedule.
Amgen just announced restructuring and 2200 layoffs. THe CNBC breaking news guy couldn't help but mention that Amgen is HQ'd just a few miles from Countrywide.
72 comments:
First
And might I say, CFC taking another bath today really makes me smile. Can you hear it in the streets? Mo money mo money mo money. What is it now...29.30 short to 21.29 or some crap like that? And check out the after hours drop? Sweet....
Well come on. Don't tease us. The afternoon went exactly like I said it would. A 5 million trade and 30 mins later the absolute bottom. Did you pull the trigger?
So how much do you expect house values in the area will fall tomorrow, or should I say Monday (after the big splash in the Sunday paper)?
How long before you see current house prices go down as some owners try to get out fast?
-Tight Credit
-Job Losses
-High cost of living
There is a trifectia one does not want to win.
Sounds like rt128/495/Boston in 1988 when the minicomputer industry blew up. That was not pretty either..
Good Luck
H.
go to business section of
www.cleveland.com
See that the County will not take checks from CFC as they fear they may be worthless.
Pretty sad when Cleveland disses you...
Yeah, I had it set at 19.75 so sniff sniff...my sweet anchor stock is now gone:-(
This is usually where people get greedy and try to short it again or even worse..state that it "can't get any lower" it's gotta be going up!
Nah, I'm done for awhile. 38,200 is enough for the amount of work I did...now THAT is passive income:-)
No, sweet passive income is when a little something shows up unexpectedly in the fishy treats jar.
Seriously, congrats. You did well and..., and this is important, you'll sleep tonight.
North Ranch McMansions for everyone!
Thanks Rob, now just think, when H.Simpson agrees to buy that brown monstrosity house and allows me to be the bird dog..that's another 10K cold cash in my pockey...kaching kaching
I'm telling you, it's like all these golden nuggets keep falling into my lap!!!!!!
Sweet passive income Legion! I read there is now a new class action suit against CFC for something or another. That's not surprising considering all the crap Mozillo has been spewing on TV and the print the last few months.
@Ratlab
Thanks a bunch! I'm gonna be at the strip club if anybody needs me....heh heh
Ok fiancee said no to the strip club thingy..but OT, I just got a Magellan Meastro 4000 GPS, why you ask? Well, cuz I recently went on a trip and used one of these things in the Hertz car..and let's face it..that's a pretty sexy voice on there...now if only I could get my computer to talk to me like that!!
The timing of this is terrible. The gene jockeys were on the cusp on being able to rapidly and efficiently clone FBs (with slightly diminished cognitive skills per generation) who would have rescued the housing market. But no! The sharks in suits have to protect their bonuses.
NR
WASHINGTON — A central California agricultural town, the automobile capital of the world and a down-on-its-luck gambling hotspot had the nation's highest rates of foreclosure filings for the first half of 2007, according to real estate data released Tuesday.
Stockton, Calif., Detroit and Las Vegas — three areas with vastly different economies and demographic trends — have all been hit hard by the nation's growing foreclosure crisis, which is ravaging both major urban areas and Middle America.
Averaging one foreclosure filing for every 27 households during the first six months of 2007, Stockton had the highest filing rate among the 100 largest metro areas of the United States, according to RealtyTrac, a real estate data firm... [link]
@Edgar
Sure would hate to be one of the early buyers in those areas holding on for their dear life as they watch all the greedy scumbags get floreclosed on around em, and pushing property values into the toilet. I mean look at fliptard..I sure would hate to be a neighbor living next to the green pool that like the great wall of china, can be seen from space...
As an early buyer I saw my zestimate go down by $70,000. Seventy thousand dollars. And it doesn't bother me. We aren't going back to 1995 prices or my refi at 4.99% either. I live in a nice place for less than what neighbors pay in taxes alone. I'm fully out of all my investment real estate and won't even look for another 6 months. In six months I figure we'll be able to tell a little better how long after that before optimizing best total returns. I'd rather buy before the bottom if the cash flows or the taxe breaks are needed for instance.
Countrywide Falls; Merrill Cites Bankruptcy Prospect (Update4)
"Stockton, Calif., Detroit and Las Vegas — three areas with vastly different economies and demographic trends — have all been hit hard by the nation's growing foreclosure crisis, which is ravaging both major urban areas and Middle America."
How is that possible, since "all real estate is local"!?!?
"As an early buyer I saw my zestimate go down by $70,000. Seventy thousand dollars."
Better check again, Dawg.
hmmm... first, Amgen. now, Countrywide.
Maybe we Arizonians will have to build a fence along our boarder with CA!
Legion, 1 in 27 in the first six months of 2007? I consider that to be a total meltdown. Can it get much worse?
Sorry for the threadjack dawg,
I checked realtytrac, I thought their mapping software was going to melt down when I plugged in Stockton. OMG, it must be really ugly out there.
@Edgar...oh yes, it will get worse...the ARM's haven't even adjusted yet
Just think, right now we are seeing all the dumbasses who bought more than they can afford or took out all their equity as they hit the proverbial fan. In the next year or two, we are going to see the morons who took out ARM's which will adjust in that time or interest only payments as they realize that they are upside down and can't refinance into better rates. That is when you are going to see 1 in 5 stockton houses in foreclosure. the property prices will go so far down people will just be walking away. Who wants to live in a ghost town? Or next to houses used by drug dealers vagabonds or even worse..Casey Serin.
lol at Stockton on realtytrac...in a 600 yard radius there are 64 properties for sale..any further out and it becomes "Too many properties to list..please zoom in"
Better check again, Dawg.
Oh, right. Seventy thousand dollars in the last 30 DAYS!
Yeah, laughed out loud. I had to zoom in three times to get it to mark properties. Anyone want to go in on some flips in Stockton?
Stockton is a Central Valley canary. Bakersfield to Sacramento is going "Okie Boomerang" over the next few years. The Crisp & Cole crimes are going to undermine the entire BKfield economy.
Breaking News from MoneyNews.com
Countrywide Downgraded by Merrill Lynch, Bankruptcy 'Possible'
One day after Countrywide Financial Corp. (CFC), the largest U.S. mortgage lender, said foreclosures and mortgage delinquencies in July had risen to a five-year high, the lender was downgraded to “sell” by Merrill Lynch & Co., which raised the possibility of bankruptcy if the company loses access to short-term financing.
Last week, Countrywide’s Chief Financial Officer Eric Sieracki issued a statement to ease market concerns about its liquidity. He stated that, “Countrywide has longstanding and time-tested funding liquidity contingency planning. Our liquidity planning proved highly effective earlier during 2007 when market concerns first arose about subprime lending, and it remains so today.”
On the issue of Countrywide’s liquidity, a Merrill analyst today told Bloomberg.com that, “We cannot understate the importance of liquidity. “Effective insolvency” would result should creditors force Countrywide to sell assets at depressed prices or investors lose confidence in its ability to raise cash.”
The analyst added that, “If liquidations occur in a weak market, then it is possible for CFC to go bankrupt.”
Merrill had rated Countrywide a “buy” since April 2005.
CFC said it has access to about $187 billion in credit.
Chief Executive Officer Angelo Mozilo assured investors the company has enough cash to cope with the market turmoil, reported Bloomberg.com.
He further stated that CFC may even benefit as its competitors are forced out of business.
Sactown and Stockton have not reached bottom yet. Not in pricing and not in # of foreclosures. Lower prices to come and plenty of houses still to be foreclosured upon. It will not be a seller's market for a few years.
So don't start your flipathon yet Edgar.
FMW, that was this morning. Interestingly the stock didn'y move on that news but on some other bit of company generated news around 2PM. That's when it cratered. CFC will be nothing but pain for everyone. The price will continue to fall and then somebody is going to buy a mess of calls way out of the money and then buy the company and be able to afford it based on the ill gotten gains on the calls. The stock is all one big green pool of algae.
Amgen? Check.
Countrywide? Check.
Moretech Financial? Their giant Hummer is FSBO. What does that tell you?
CFC said it has access to about $187 billion in credit...
Well, la dee friggin' da! I'd be more impressed if they had $187 billion worth of qualified borrowers. There is a lot of ballast in the CFC keel, they don't need any more.
Yours is a nice part of the world, Dawg. It's a shame the assholes ruined it.
...Stockton. OMG, it must be really ugly out there.
Yeah, Stockton is pretty ugly. And there are going to be alot of forclosures as well.
I wonder why people in LA & OC think that they will avoid the carnage? I think it will be worse when this wave hits. The harder the come, the harder they fall.
LA & OC think they have a case of "it'sifferent here" in the fridge. OC in particular is over exposed to real estate at every level. LA & OC also have one of the worst cases of boiling frog syndrome ever observed. IMO they've become really crappy places for the 80% of everything everyone does day to day. They just don't notice the little bit of quality of life they loose over time. The housing bubble will be the last straw. What remains will be seriously third world.
"The Crisp & Cole crimes are going to undermine the entire BKfield economy."
True dat!
--------------------------
The housing bubble will be the last straw. What remains will be seriously third world.
-------------------------
If it has the same vibrancy, fluidity , adaptability,pricing, pathos, ethos and other oz's as the real third world I might come back to LA. Meet ya on the way out perhaps ?
-K
Edgar said...
CFC said it has access to about $187 billion in credit...
Well, la dee friggin' da! I'd be more impressed if they had $187 billion worth of qualified borrowers. There is a lot of ballast in the CFC keel, they don't need any more.
Lol
That's like Casey saying he had access to 2.2 million dollars, it may be true, but it doesn't mean they AREN'T up the proverbial creek without a paddle.
Bakersfield Bubble was noting only last month that David Crisp was waving a letter of credit for 1.8 billion dollars. Countrywide has so many commercial leases in the county commercial rents are gonna get crushed before residential.
@Rob
Didn't that deal fall thru?
Speaking of Countrywide, I discovered that the Fidelity Cash Reserves fund where so many people have money parked right now has a big ol Countrywide buttnugget.
Robert-
I sent you an email wav file of a very funny Crisp song.
Do you know how to get this up on blogger.
Pardon my ignorance in such matters, but when precisely are we expecting all these ARMs reset?
Higher interest rates function as a tax on people who hold variable debt,” says Daniel Gross, reporter for The New York Times, a “truism that is particularly apparent to homeowners holding adjustable rate mortgages.” In his article, Gross cites Mark Zandi, chief economist at Moody’s Economy.com, who estimates that nearly $2 trillion in ARMs are due to reset by the end of calendar year 2008.
Geez, it's like Armageddon...the end is nigh...
The top story on the LA Times web site is that Merrill says bankruptcy a possibility for Countrywide. Tomorrow will be a run for the exits. Could it be over by next week?
Oh no! I ejaculated my stock too soon!!!!!
But outside Countrywide's offices in Calabasas, several employees said reports of credit problems at the company weren't making the rounds inside the company's huge headquarters complex.
"As far as we know, it's a stable company," said a 27-year-old technology specialist who said he had worked at Countrywide for five years and declined to be identified. "I don't know what the rumors are."
Geez, I wonder how many ENRON employees made that exact same comment just before finding out they were completely broke and out of a job.
the higher ups are going to keep positive bullshit going and rah rah attitude while they are unloading their stock behind their backs before it goes completely under...
Oh brother class action lawsuits against CFC..so what dat mean? The lawyers make 5 million dollars in fees which gets paid before any investors, and the investors get a couple of CFC t-shirts and a CFC fridge magnet...great.
If Countrywide is going BK... who is next? Goldman Sachs?.. why is the fed injecting so much money?.. to save their rich friends?... stay tuned.... this is just the beginning..
Legion, hang on to your money for a year or two and you will probably be able to buy a holiday home anywhere outright.
Market is a sea of red here this morning.
Looks like Red and more Red. Time to buy more GSPG.
My trolls, my trolls!
Europeon trading is looking ugly today. Butt-ugly.
Like the asscrack of doom.
Holy crap futures are getting whacked.
Sign of things to come:
I'm in the liquor business. History has shown that when the going gets tough, the tough get drinking. My friends ITB tell me a lot of their Wall Street customers are switching from high-end Pinot to liquor. One customer who usually spends about $800 a week on wine is now buying a fifth of Smirnoff in the plastic bottle.
Liquor is a recession-proof business. What you no longer sell in high-margin, high-end product you make up for in volume sales of low margin crap.
AHHHHHHH CFC Pre-mkt: off 13% at 17.16!!!
Well, the LA Times has changed it's Countrywide story to an obituary.
Housing starts in 20 mins. Anyone else ready for more bad news?
CFC takes a page from the Casey Serin school of survival
@ TK,
Tell CFC that right now cash is king.
tee hee
Didn't casey have a mortgage with CFC?
I wonder what the returns would have been if you were to short all of the mortgage companies casey dealt with.
Is there a list out there, I checked out casepedia but got nothing.
Would have made good money on WM,CFC.
As long as CFC doesn't have to sell all those houses they bought for top dollar they will be fine.
@TK (and everyone else): If you haven't already seen it, the following presentation, "Who's Holding the Bag?", is required reading; special thanks to the Value Quest blog for posting it:
Who's Holding the Bag?
Presentation was given roughly late spring, but it's dead-on. It also has an absolutely stunning graph on p. 27. Let's just say we're not even close to the bottom when it comes to foreclosures.
@Rob: "Bakersfield to Sacramento is going 'Okie Boomerang' over the next few years."
There's a certain rich irony to the thought of Californians packing up and heading out of state. Strap Granma's rocking chair to the bed of the truck and tell Ma and Pa and Rosasharn and the rest of the fambly to get in, we're headin' back to Oklahoma!
Unfortunately, if there ever is any exodus out of California, I suspect the prime destinations won't be in the Midwest, but rather whichever metropolitan areas still have a surplus of jobs--one of which would be D.C. As if it wasn't already crowded here. Oh well, at least we've got lots of shiny new condos going up. Lots and lots and lots of them.
CFC down another 3 dollars...man, that was one golden nugget to be short on. I wonder how low it WILL get.
And all joking aside..I'm really not liking the economic picture here. The dow has been getting creamed on a daily basis, it is becoming a meltdown of international proportions, and I think people are really going to start panicking.
Ok joking back on, at least I am in Montana and already have a survivor outpost for the coming apocolapyse. I am converting the 38 grand I made on CFC into gold coins....
PV,
The sad parts are 1 you knew exactly what I meant by Okie Boomerang and 2 it is already happening. The lower middleclass exodous started in mid 2005 according to Dept Finance records matched to drivers licienses. 3rd you are correct. We are not going to repopulate the midwest. LV, PHX, Tuscon, and Austin and at the extremes St. Loius, ATL, and Memphis type places are the destinations. In the upper echelons (my neighbors) the PacNorWest seems likely.
Legion, don't worry. I can't remember who it was but when asked how he got rich, the reply was "I sold too soon".
Can someone tell what this exactly means?
My Mother in Law refinance her home with countrywide. She pulled out 1/4 of the equity for some repairs and what not. She has owned the home for over 20 years.
Does this countywide stuff affect her in some way - even down the road?
Thank you
Peripheral Visionary, Nice link. Not to worry, the fed will bailout mbia and citi with our money. It's in the bag. The whole money system is a giant rip off.
Bee's Knees:
The question you asked has been covered by a number of articles, but basically, a lender going bankrupt does not affect the people with a mortgage from that lender. Even if the company goes under, the mortgage contract is still intact, and may be transferred to a new company. The good news is that the new owners of the debt can't change the terms of the loan (like change the rate or the payment structure); the bad news is the money is still owed and the payments still have to be made.
If a lender goes into bankruptcy, the mortgages will be sold to another entity, who will take them over in their entirety. The only difference the homeowner will see is a different mailing address to send the mortgage to. The new entity can't force any changes to the loan, even if the homeowner is "underwater" (e.g. owes more than the home is worth.) The new entity may want to renegotiate, but that may or may not be a good deal, and the homeowner has the right to stay with the original contract.
In short, the home is perfectly safe as long as the mortgage payments keep getting sent according to the payment schedule.
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