The mortgage industry isn’t just hemorrhaging money anymore, it’s hemorrhaging jobs. Two more mortgage lenders (Lehman Brothers Holdings and the National City Corporation) announced that they would be laying off 2,000 employees.
mortgages
By 9.7.07
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A mortgage maker that positioned itself as a “Christian” lender wasn’t immune to secular market forces and fired employees are learning to turn the other cheek when it comes to their severance pay: a $20 supermarket gift card. [Atlanta Journal Constitution]
Pending Home Sales Plummet 12% In July
By 9.5.07
“The housing market is bad and is going to stay bad for some time,” said Zach Pandl, an economist at Lehman Brothers Holdings Inc. in New York, who predicted a 3 percent drop. “This number does not look good for existing home sales for August.”
By 8.31.07
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Bush will announce later today a plan for helping low-income homeowners curtail foreclosure. [NYT]
Inside The Countrywide Subprime Lending Frenzy
By 8.27.07
The New York Times has a very interesting article about the business practices that resulted in Countrywide’s dramatic spiral into the dirt. Recently, the nation’s largest mortgage lender had to tap $11.5 billion in emergency credit and was the beneficiary of a $2 billion investment bailout from Bank of America.
As The Fed Snoozes, States Step Into The Subprime Breach
By 8.26.07
States are beginning to enact protections for subprime borrowers, reacting to the absence of a national solution from Washington. North Carolina last week became one of one of several states to clamp down on the adjustable-rate mortgages that have fueled the subprime meltdown.
Mortgages Are Disappearing But The Advertising Isn't
By 8.24.07
Even as lenders face bankruptcy and banks are closing down their mortgage divisions and cutting jobs, the advertising for subprime and non-conforming loans is still going strong. What’s the deal?
Capital One To Close Mortgage Unit
By 8.21.07
“Current conditions in the secondary mortgage markets create significant near-term profitability challenges,” Capital One said in a statement. “Further, recent and continuing developments in the mortgage markets reduce the long-term outlook for profitability in the business, as the company expects markets for prime, non-conforming mortgage products are likely to remain challenged.”
Later, gator.
Getting Foreclosed? We Want To Hear About It
By 8.20.07
Have you or someone you know experienced or are experiencing foreclosure? The Consumerist is interested in interviewing people who are losing their house. Please send an email, subject line “foreclosure” with your contact information and the best time to reach you at tips@consumerist.com.
After Foreclosure, Here Comes The IRS
By 8.20.07
If your house is being foreclosed on, don’t expect the pain to end with the foreclosure.
Brokers Lured Naive Homebuyers Into Mortgages They Couldn't Afford
By 8.20.07
The core of the subprime meltdown are homeowners not paying their mortgages. A contributing factor to the default rate are people who signed up for loans with low teaser rates that ratcheted up afterwards, and now it’s time to give the devil his due. Why would people do such a foolish thing?
By 8.20.07
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Easy credit of dubious worth isn’t some new and unparalleled scandal; in fact, our nation’s economy was built upon it. [New York Times Magazine]
Take Advantage Of The Subprime Meltdown
By 8.19.07
Prospective home buyers shopping for houses worth around $500,000 are taking advantage of rising interest rates caused by the ongoing subprime mortgage meltdown. Buyers and sellers alike are becoming increasingly mindful of one magic number: $417,000. Fannie Mae and Freddie Mac will only guarantee mortgages worth less, forcing some sellers to lower their asking price to accommodate buyers looking to avoid so-called jumbo mortgages. From the Wall Street Journal:
Countrywide Borrows $11.5B from 40 banks
By 8.16.07
Countrywide has secured $11.5B in financing from 40 banks in an effort to remain afloat as the mortgage market crashes.
Global Market "Correction" Just Like Pork Chops And Sausages
By 8.16.07
It’s easier to understand the subprime mortgage meltdown and how it’s erasing gains in the global markets with the humorous little metaphor we heard offered on the BBC world service this morning from the editor of Britain’s MoneyWeek magazine. She likened the “eventuality” (seeing as we’re not quite ready to call it a crisis yet) to a butcher shop. It used to be that retail banks kept mortgages on their books for the life of the loan, but within the past five years, they realized that you instead of just eating the porkchop among your family, you can chop it into “tiny bits” and make them into “loads and loads of sausages” and sell them to everyone.
Whoops, Where'd My Mortgage Go?
By 8.15.07
NPR interviewed a would-be Brooklynite named Claudia who is trying to buy an apartment for herself and her teenaged sons. Everything seemed settled, when all of a sudden the lender that was going to be offering Claudio her HELOC loan decided they didn’t really want to anymore.
Countrywide, America's Largest Mortgage Lender, May Have To File For Bankruptcy
By 8.15.07
“If enough financial pressure is placed on Countrywide or if the market loses confidence in its ability to function properly then the model can break, leading to an effective insolvency,” Bruce wrote. “If liquidations occur in a weak market, then it is possible for Countrywide to go bankrupt.”
Mortgage Payments Shouldn't Exceed 28% Of Your Income
By 8.14.07
Those with option-ARM mortgages ratcheting up to a higher APR in October, take note: A well-polished piece of advice for home owners is that mortgage payments, including principal, interest, insurance, and taxes, should not be more than 28 percent of your gross monthly income, according to the August issue of the USAA member magazine. Individual situations may vary, but the basic idea is not get more house than you can afford. Around 28% gives you enough to take care of day-to-day living expenses and food and gas and going to see Transformers and whatnot.
