Edward Harrison

Nationwide Brings Back the Dreaded 125% Mortgage

John, you are right that, despite the gratuitous insult, I do agree with SoCalGal. The Nationwide proposal is a lot better than the 125% FHFA proposal. They are dealing with customers with whom they already have a lending relationship and the interest rates rightly reflect the extra risk from having an unsecured loan for the previous negative equity portion.

You have seen my FHFA post and obviously I see that program in a vastly different light. I should also point out that Nationwide has explained this program and I posted their explanation on my site:

www.creditwritedowns.c...

Nevertheless, as I indicated, this program operates on the border of what should be considered prudent lending and gives me great pause as to whether Nationwide is taking too much risk. Time will tell.

In the end, oversight on programs like this is critical because lending more than 100% LTV is a practice not to be encouraged, especially for systemically important institutions like Nationwide.


On Jul 10 02:31 PM John Lounsbury wrote:

SoCalGal - - -
After reading your comment, I can not see how your views (with which I agree) contradicts anything the author said. You offer some different aspects of the discussion, but you are not in opposition to what the author wrote.

European Finance Now Under Attack

I am playing this by staying well clear of financial services until they have put in a bottom. No one knows how things will play out, so calling a bottom is more gambling and less investing -- unless, of course, you can get a sweetheart deal like JPM on the WaMu acquisition or like Warren Buffett at Goldmans.