Thursday, March 15, 2007

"Tsunami of foreclosures may wash over Central Valley"

This looks like one of my headlines. From the Central Valley Business Times:


As the so-called “subprime” market – the industry that spawned the no money down home buying spree – is rocked by financial failures, the waves of the financial storm could wash over the Central Valley, says an expert on the industry.

The national delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 4.95 percent of all loans outstanding in the fourth quarter of 2006 on a seasonally adjusted basis, up 28 basis points from the third quarter, and up 25 basis points from one year ago, according to the Mortgage Bankers Association’s national delinquency survey revealed this week.

The increase was driven by increases in delinquencies for all major loan types, most notably for subprime and FHA loans, it says.

"As we had expected, in the fourth quarter, delinquency rates again increased across the board. Increases in delinquency and foreclosure rates were noticeably larger for subprime loans,” says Doug Duncan, MBA's chief economist and senior vice president of research and business development.

“As we have noted before and as recent events have made clear, market discipline in this industry is swift, can be severe, and is more effective at changing lending practices than any potential changes in regulation," says Mr. Duncan.

11 comments:

Anonymous said...

“As we have noted before and as recent events have made clear, market discipline in this industry is swift, can be severe, and is more effective at changing lending practices than any potential changes in regulation," says Mr. Duncan.

"Swift"? Where was that 'swift market discipline' back in 2001-2006, when all the corrupt fraudulent practices in the mortgage business were actually going on!!!

Oh, yeah: everyone was too busy making $$$ back then to worry about enforcement. The Feds had no worries about this rampant white-collar crime, as the real estate bubble saved us from a recession.

So now that the bubble has burst and a recession looms, NOW we're going to do a post-mortem on the carcass and start pointing fingers of blame... Fortunately, there's no lack of scapegoats within the REIC, and frankly, most of it is deserved...

Anonymous said...

This is just the very begining of this mudslide. It's going to get very..very ugly.

Anonymous said...

Speaking of mudslides, has anyone heard anything about Crisp and Cole lately?

Anonymous said...

They have subpoenaed escrow files at title companies they work with for a DRE investigation. Looks like they will be going down sooner rather than later.

Anonymous said...

Most pundits are downplaying this fraud as being confined to the mono-line sub-prime lenders, but look at the names of the companies mentioned in this article:

http://origin.mercurynews.com/news/ci_5411822

Do these look like small-time lenders? Not to me....

Anonymous said...

As if it were needed, here's another account of how crooked the game had become, with lenders giving anyone as much cash over asking price as they asked for:

http://www.mkgappraisal.com/letter01.htm

Is this the same game-plan taken out of Crisp and Cole's playbook? I loved how they ran those T.V. commercials last year, with them standing in front of their Mercedes in their Armani suits as they got on their Lear jets. Conspicious consumption, fueled by greed and hubris...

Bakersfield Bubble said...

I think the spread to Alt-A and then Prime loans will "surprise" all the pundits.

Thanks for the appraisal link!

Keep us updated (as much as you can) on the progress of the DRE investigation.

Anonymous said...

"The nonprofit Center for Responsible Lending predicted the subprime failure rate would reach 22.8 percent in Santa Ana, Anaheim and Irvine, 22 percent in Los Angeles and Long Beach, and 25.2 percent in Bakersfield." - Reuters, Mortgage meltdown pulls in more than those on edge, Thursday March 15, 6:13 pm ET, By Gina Keating

http://biz.yahoo.com/rb/070315/usa_subprime_borrowers.html?.v=3&.pf=loans

the diceman said...

Casey serin is a worthless piece of shit.Send this sob back to russia now.

Anonymous said...

You can't get "market discipline " during a real estate mania . The only thing that brought on the market discipline was the fact that real estate stopped going up .

The very reason regulation is needed is because by the time the market decides that some "market discipline " is in order ,its to late .

You could say that in 1929 and onward there was some pretty swift market correction ,but way to late to be of any help .

To insure that the RE market is stable a little regulation would of gone a long way toward preventing this fake false hyped up market.In 2002 when the market started to contract because of the prices the lenders should of rejected the unqualified/speculators and the market would of slowed down because affordability had reached it max.Instead new loans were created in order to stop the "market discipline" and we entered the world of funny money liar loans .

Anonymous said...

What really kills me is when people act like there should be MORE laws created to prevent this, when in fact all the laws ever needed to combat mortgage fraud are ALREADY ON THE BOOKS!

All we really needed was ENFORCEMENT of EXISTING laws, but the regulators were conveniently looking the other way ("see no evil, hear no evil, speak no evil"....) Of course, enforcement would not be "good for business".

Utterly maddening, and I'm surprised people are not as mad as hell over this 5 year run of rampant fraud. I guess most sheeple don't really understand how they were getting screwed by those in the REIC who were in on the fix...

FWIW, here's a link that was added to the California Association of Realtors website today.

CAR site:

http://www.car.org/index.php?id=MzY3OTM=

Story pointing out the warning signs should've been obvious to the Feds:

http://news.yahoo.com/s/usatoday/20070315/cm_usatoday/mortgagelenderscantclaimthatnoonetoldthemso;_ylt=AmFF_vyKc6JJuXwk_IplL7bMWM0F


The CAR actually posted some stories that are critical of mortgage practices, although it's no surprise they NEVER add any news reports that are critical of the Real Estate agents' role in the debacle, e.g.:

http://origin.mercurynews.com/news/ci_5411822

PS I love the part in that article which recounts how those real estate agents and mortgage lenders were kicked out of the Flea Market (and blocked from renting a space in the future) for being too disruptive! How obnoxious must one be, to get ejected from a swap meet!