Sheila C. Bair, the chair of the FDIC, suggests that lenders “restructure all 2/28 and 3/27 subprime hybrid loans for owner-occupied homes in cases where the borrower has been making timely payments but can’t afford the reset payments. Convert these to fixed-rate loans at the starter rate.”
subprime meltdown
Anatomy Of The Subprime Meltdown
By 10.18.07
Three years ago, Colorado truck driver Roger Rodriguez was in the market for a new mortgage loan. With radio and Internet ads trumpeting easy approvals, he picked up the phone.
WaMu's Net Income Down A Whopping 72%
By 10.18.07
The “housing correction” is turning out to be “more dramatic and more rapid” than Kerry Killenger, WaMu’s chairman and chief executive had expected.
Critics Say Countrywide Isn't Doing Enough To Help Foreclosed Homeowners
By 10.16.07
Countrywide is catching hell from consumer advocates who say they’re not doing enough to help the homeowners they’ve foreclosed on.
Foreclosures Doubled In September
By 10.11.07
Last month saw twice as many foreclosures than last September, says RealtyTrac, the foreclosure tracking organization.
Subprime Meltdown Kicks WaMu's @#$, Profits Down 75%
By 10.5.07
It must not be fun around WaMu headquarters today. Profits are down a whopping 75%.
Baltimore Feeling The Pain Of The Housing Slump
By 10.4.07
In the spring quarter, 25 percent of the foreclosures were in the city itself. The numbers are up even in Belair Edison, a stable working-class neighborhood of neat, two-story row houses adjacent to a picturesque wooded public park.
Congress To Bush: How About A Mortgage Czar
By 10.4.07
Leaders of the House and Senate will fight the ongoing subprime meltdown by demanding that President Bush appoint the weakest of government figureheads: a czar. American czars have guided failed federal policy on energy, food safety, borders, drugs, AIDS, and the Iraq war. The appointment of a mortgage czar might be the strongest signal yet that all is lost; recession, if not a crash, a near certainty.
Democrats say they will offer a plan for increased funding for foreclosure prevention, and will seek to temporarily lift limits on the portfolios of government-sponsored Fannie Mae and Freddie Mac, which could help the housing market if they were allowed to handle more expensive mortgages.
Citibank Warns Of 60% Drop In Earnings Due To Subprime Meltdown
By 10.1.07
Citibank is warning investors to expect a 60% drop in earnings due to “dislocations in the mortgage-backed securities and credit markets, and deterioration in the consumer credit environment.”
By 9.30.07
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Allan Sloan from Fortune magazine argues that Bernanke is the enemy of the prudent investor. [CNNMoney] (Thanks, Michael!)
NetBank Fails, Assets Disgorged To FDIC, ING
By 9.29.07
NetBank is the first federally regulated bank to fail thanks to the ongoing subprime meltdown. The failure spotlights the importance of FDIC insurance, which guarantees deposits of up to $100,000. Customers who abided by the FDIC limits and deposited less than $100,000 with the internet bank will become ING customers, and will have immediate access to their funds. The 1,500 customers who collectively deposited $109 million above the FDIC limits stand to lose half of their funds.
American Home Mortgage Bounces Checks, Blames Chase Bank
By 9.29.07
It seems that bankrupt mortgage lenders are no different from bankrupt home owners. When they start bouncing checks they blame the bank, and hey, they might even be telling the truth.
By 9.28.07
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Will the Fed cut rates again following August’s depressing home sales numbers? Someone sure thinks so. [Bloomberg]
Worst Month For New Home Sales In 6 Years
By 9.27.07
Here’s a cute but meaningless graphic from ABC News that illustrates a very important statistic: New home sales are down. Way down. 8.3% down. It’s the worst month for new home sales in 6 years.
By 9.25.07
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Home prices in 20 U.S. metropolitan areas fell the most on record in July, indicating the threat to consumer spending was rising even before credit markets seized up in August. [Bloomberg]
Proposed Law Would Let Bankruptcy Courts Rewrite Predatory Mortgages
By 9.25.07
Several Democrats proposed a bill last week in the House of Representatives that would allow bankruptcy courts to alter mortgages written by so-called “predatory lenders.” The bill would save around 600,000 Americans from foreclosure, says its author, Representative Brad Miller from North Carolina.
The Optimal Mortgage For The Rational Borrower
By 9.22.07
Two professors have released a paper branding adjustable rate mortgages, which are responsible for the subprime meltdown, as the optimal mortgage type for rational borrowers. As we know all too well, few borrowers are antiseptically rational. According to Columbia professor Tomasz Piskorski and NYU professor Alexei Tchistyi, ARMs hold several unrivaled advantages:
Credit Card Companies Slashing Credit Limits
By 9.22.07
The continuing subprime meltdown is leading jittery creditors to reduce cardholder credit limits at the first sign of trouble. According to a recent survey, up to 75% of banks are cutting credit limits to minimize their exposure to risk. The move can adversely affect credit scores, which are determined by considering the percentage of available credit used. From the Chicago Tribune:
A change can stem from late payments of any kind, a drop in your credit score or the addition of new lines of credit. Bryan found out limits on three cards were actually cut after he took out a home equity loan to pay off some debt.
