Bankrate has a really interesting article about the effect that the Fed’s rate cuts are having on the mortgage industry. As constant readers of the site are already well aware, the subprime meltdown has lead to a crisis in the secondary mortgage market—investors are no longer interested in purchasing non-conforming loans.
subprime meltdown
Countrywide Gets Another $12 Billion In Bailout Money Financing
By 9.20.07
Reuters is reporting that Countrywide has announced that it has secured an additional $12 billion in financing to help it hang on through the housing slowdown.
IRS Launches Special Website Section For People Facing Foreclosure
By 9.18.07
The IRS has launched a special section of its website aimed at helping people who are facing foreclosure navigate the tax issues that surround debt forgiveness.
Fed Cuts Rate by Half Percentage Point
By 9.18.07
The Fed cut interest rates by half a percentage point this afternoon, citing “tightening of credit conditions” that have the potential to “intensify the housing correction.”
Foreclosures Up 115% From Last Year
By 9.18.07
Foreclosures “zoomed” in August, up 115% from last year and 36% from July according to the newest numbers from RealtyTrac. This is the beginning of one of three remaining waves that will hit the market in the next year. This wave is expected to peak in October as 2 million 2/28 ARMs reset to market rates and an estimated 600,000 homeowners can no longer afford their payments.
ETrade Exits Wholesale Mortgage Business, Warns Investors About Subprime Fallout
By 9.17.07
E*Trade is warning its investors that profits will come in 31% below estimates and that it is exiting the wholesale mortgage business and “streamlining” its direct mortgage operation due to the “disturbance in the credit markets.”
Greenspan "Didn't Really Get" That Subprime Lending Could Hurt The Economy
By 9.14.07
Former U.S. Federal Reserve chairman Alan Greenspan told 60 Minutes that he “didn’t really get” that irresponsible subprime lending could be significant enough to hurt the economy, but he still defends the decision to keep interest rates low from 2001-2004.
By 9.14.07
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WaMu has closed Long Beach Mortgage Co., their Southern California subprime mortgage lender, laying off 150 people. WaMu says they will also drop 1,000 jobs and stop financing mortgage companies. Subprime mortgage candidates will now have to deal directly with WaMu to apply for a loan. [Orange County Register]
Southern California Home Sales Sink To 15-Year Low Forcing "Blow-Out" Sales Of New Homes
By 9.13.07
Bad news for Southern California; home sales in August dropped to a 15-year low according to the LA Times. Sales plunged 36% from last year and 71% of Southern California zip codes are reporting declines in housing prices.
By 9.12.07
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The dollar hit a new all-time low against the euro overnight as investors freaked out over impending interest rate cuts and fears of an extended housing recession. [Wall Street Journal]
The Big, Big List Of Subprime Mortgage Layoffs And Closures
By 9.10.07
The Truth About Mortgage has been compiling a list of mortgage lending layoffs and closures since the end of February and the effect is staggering. The list, last updated today, now has over 250 entries. Anyone looking for a quick and easy way to freak out about the mortgage market need look no further than this list.
Ameriquest Is Dead
By 9.10.07
Ameriquest, the lender the epitomized everything that was f*cked up about the subprime mortgage meltdown, is dead.
WaMu Says Housing Market In "Perfect Storm"
By 9.10.07
“The combination of rising delinquencies, higher foreclosures, more housing inventories, increasing interest rates on many mortgages and greatly reduced availability of mortgages due to limited liquidity is creating what we call a near-perfect storm for housing,” Chief Executive Officer Kerry Killinger said.
By 9.8.07
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Countrywide Financial announced that it will fire 10,000-12,000 employees responsible for approving and underwriting mortgages.
Facing Foreclosure? Take A Deep Breath And Don't Panic
By 9.8.07
The ongoing subprime meltdown will claim its next victims in October, when adjustable rate mortgages worth over $50 billion reset, but homeowners facing foreclosure can keep a roof over their head by following a few common-sense tips. Above all, don’t panic, and don’t ignore the problem – instead, try the following:
Mortgage Industry Lays Off More Workers
By 9.7.07
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.
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]
