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    • Mon Aug 25th 08:38 AM | Rating: 0 0
      Commented on:
      Mortgage/Credit Trends [Housing Tracker]
      Jason, ditto.. .. . .

      Additionally, as an FYI to those interested in the Option ARM issue, Wells Fargo did ZERO Option ARMS, none. They didn't like the program and didn't think it was the right thing for their customer or bank. The sales field lost an opportunity to do 20% or more additional business during the Option ARM hay-days ('01 through '06) but the senior management stuck to their guns. Turns out they were right.
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    • Sat Aug 16th 09:18 AM | Rating: 0 0
      Commented on:
      Checking In on George Soros
      The above comments are correct; this article is full of discrepancies and incorrect data. This is just another example of the quality and value of 99.98% of these stock advisors/soothsayer/sn... oil salesman’s advice and recommendations.

      The vast majority of these so called financial advisors and “Strategic Wealth Builders” are gene-related to the Snake Oil salesman from the late 1800s and early 1900. Yea, there are a few great ones like Warren Buffett, but most of these guys make money off of trading stocks back and forth (usually churning) using somebody else’s money. IF you guys are so bright and smart (NOT the above commenters) why are you “selling, touting, and hawking” your advice at $39.95 a month when you could be making millions per day investing, buying, and selling based on your knowledge of the market. The advertisement I most enjoy is the one that professes that he turned $33,000 into $7,000,000 in less than two years. YEA, right. IF he did that, then he should be able to turn his $7,000,000 into $1,484,848,485 in the next 2 1/2 years or so and retire comfortably rather that pimp his DVD and book at $79 bucks apiece or so. The other thing is, if all these guys profess to never “take a haircut” why are so many bald??
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    • Sat Aug 16th 09:16 AM | Rating: 0 0
      Commented on:
      Checking In on George Soros
      The above comments are correct; this article is full of discrepancies and incorrect data. This is just another example of the quality and value of 99.98% of these stock advisors/soothsayer/sn... salesman’s advice and recommendations. The vast majority of these so called financial advisors and “Strategic Wealth Builders” are gene-related to the Snake Oil salesman from the late 1800s and early 1900. Yea, there are a few great ones like Warren Buffett, but most of these guys make money off of trading stocks back and forth (usually churning) using somebody else’s money. IF you guys are so bright and smart (NOT the above commenters) why are you “selling, touting, and hawking” your advice at $39.95 a month when you could be making millions per day investing, buying, and selling based on your knowledge of the market. The advertisement I most enjoy is the one that professes that he turned $33,000 into $7,000,000 in less than two years. YEA, right. IF he did that, then he should be able to turn his $7,000,000 into $1,484,848,485 in the next 2 1/2 years or so and retire comfortably rather that pimp his DVD and book at $79 bucks apiece or so. The other thing is, if all these guys profess to never “take a haircut” why are so many bald??
      View article »
    • Sun Jul 27th 11:07 AM | Rating: 0 0
      Commented on:
      A Very Cheap Shot on the WSJ Editorial Page
      I just re-read the WSJ editorial and I think it's right on target. What part is so incorrect that it should be called a "Cheap Shot"?
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    • Sun Jun 29th 09:49 AM | Rating: 0 0
      Commented on:
      Writedowns and Capital Raised by Financial Firms
      You’ve got to buy when everybody says "sell", and sell when the crowds say "buy". While watching the stock market and getting caught up in the dramatic rise in price and the buying frenzy, I asked my stock broker about Apple stock. He said it was a great buy so I bought 500 shares on 9/18/06 at $73.81 each or a total of $36,905. On May 14th 2007 my broker called and said the stock was up to $109.62, did I want to buy some more. NO way I said, too costly. Through Spring, Summer, and Fall of 2007 Apple stock was going through the roof; it was skyrocketing, it was Wall Street’s new favorite stock. I was really upset with myself because I felt like this express train to financial nirvana was leaving without me. I got caught-up in the herd mentality (sounds a little like the real estate market, doesn’t it?). On December 11th 2007 I frantically called my stock broker and told him to buy 1000 shares; I didn’t care what the price was, I wasn’t going to be left out of this market, these rising prices. The price was $194.75. In February and early March I was tired of the roller coaster ride and was ready to dump everything at about $120 a share; more herd mentality. I still own the stock, I like the company. Wells Fargo is a GREAT, well-run company that’s been around for 156 years. They have a well known and well respected brand name as well know world-wide as Coke and McDonalds. Sure, they are getting beat-up and will suffer additional losses due to the credit and real estate meltdown, but they will be left standing and strong, ready to gain market share from their competitors. I think Warren Buffet is its biggest investor and Wells Fargo & Co is his third most popular stock. I own some WFC stock and I’m not happy about its price reduction, but like Warren Buffet, I’m in for the long haul. When asked “When is the best time to sell a stock”, Warren Buffet answered “Never”.
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    • Thu May 29th 08:33 AM | Rating: 0 0
      Commented on:
      More on HELOCs, Second Liens and Rose Colored Glasses
      Your data is informative and interesting; very well done. However, your charts are so full of your logos and self promotion that they are nearly impossible to read. The last two charts with line graphs use similar colors and pencil thin lines. Increase the color contrast and line size. Also, please stop twisting them sideways, it doesn't change the outcome, it just makes it harder to read, once again.
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    • Thu May 8th 08:46 AM | Rating: 0 0
      Commented on:
      Downey Financial: Higher Delinquency When Minimum Payments Reset
      Wait till these Option ARMs start to kick-in for WaMu and Countrywide. You ain't seen nuttin' yet!!!

      Wells Fargo is one of the very few national lenders that never did Option ARMs; they don't have one on their books. Wachovia picked-up a mess of them when they bought Great Western. Talk about bad timing.....
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    • Thu Apr 17th 08:29 AM | Rating: 0 0
      Commented on:
      Misinformation From Fannie and Freddie On Walking Away
      The most important part of the “walking away is good” theory is that it doesn’t take into consideration moral and ethical standards that say “if you borrow money, for any reason or endeavor, you are morally and ethically obligated to repay that debt. Suppose you borrow money from your family to buys stocks and the stocks go in the tank. Michael Shedlock believes that “it’s OK to walk away” from that debt. Suppose you borrow money from a bank and purchase a boat and the boat sinks and, unfortunately, it is drastically underinsured. Michael Shedlock believes that “it’s OK to walk away” from that debt. Suppose you call your stock broker and make a substantial stock purchase and the stock collapses during the same day. Michael Shedlock believes that “it’s OK to walk away” from that debt, it’s OK to say that you made a mistake and you’re not going to pay for those stocks, sorry. Most stock brokers have experienced that situation at least once. It’s a slimy, despicable way of doing business and it shows the total decay of morals and ethics for a great number of people.

      I’ve made my share of bad bets, bad purchases, and bad investments, but I’ve always honored my obligations. I didn’t screw anyone due to my mistake.


      On the other hand, Michael Shedlock and many people like him believes that “it’s OK to walk away” from your debts and obligations; morality and ethics play no part in their daily activities. So sad.
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    • Sun Apr 6th 12:32 PM | Rating: 0 0
      Commented on:
      Ten Comments on Housing
      Danish Dude wrote: “If you live in Paris, do you want to own a vacation place 6 time zones and 8 hours of flight-time away in Miami - or take the TGV to southern France? The food is better there, too.”

      While I am not agreeing or disagreeing with most of your comments, I would ask you this; would you call it unlikely and a bad investment for somebody on the Eastern seaboard of America to have purchased real estate (second home or rental property) in Hawaii 5 or 10 years ago; we are 6 timezones away? I would neither call that possibility unlikely or imprudent. Also, food in Hawaii is not nearly as good as food in New York City, Washington DC, or Miami Florida.
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    • Fri Mar 28th 09:30 AM | Rating: 0 0
      Commented on:
      Wells Fargo Seeking Fed Shotgun Marriage
      DSX Lover - - - -Let me correct some of your misconceptions about WaMu’s mortgage position. First of all WaMu was and still is the poster boy for Option ARMs which are probably more toxic than all of the subprime loans. The Option ARMS that they did, and are still doing, give the borrow the “option” to pay at a rate that is so low that, not only does it NOT cover any principal, it doesn’t even cover all of the required interest. The unpaid interest creates a NEGATIVE amortization that can, and most likely has, gone up to 115% of the original loan balance. At the same time, these borrowers’ (NOT small loan amounts, by the way) properties are depreciating in value. A significant portion of all of their mortgages, and an even greater portion of their Option ARMs are in the most distressed markets such as Las Vegas, California, and Florida. Additionally, many of these borrowers did no income, no asset, loans and got a second mortgage with WaMu making the total LTV 95% to 100%. These loans are just now starting to reset. The teaser rates were substantially below the fully indexed rate plus the margin. Therefore, your statement “Resets of interest rates, will be at the same rate, as the introductory rates, for SUB-prime, because the FED has lowered 325 Basis Points” is incorrect. If their loan balance is now at 115% of the original loan amount, the borrowers are required to make the full mortgage payment, including principal, based on the applicable treasury rate plus the required margin. Most of the borrowers have been making a payment based on 1% or 2% at most and excluding principal. Knowing that their mortgages with WaMu exceed the current property value buy 10% to 25%, how many of these borrowers do you think are going to be making the much bigger payment versus stop paying and staying in the property for 4 to 12 months rent and mortgage free until evicted by the Sherriff at the foreclosure. My guess is not many.
      Granted, traditionally “Only 2% off All outstanding loans go into Foreclosure”, but these are not traditional times and WaMu is NOT sitting on a high percentage of “traditional fixed rate loans”. Your statement that “Foreclosures are at peak right now” is ridiculous, they have not even started to peak. I am guessing that they will peak at the end of 2009 or very early 2010.
      I have 38 years experience in the retail mortgage business and oversaw an average of $100 million per month in retail fundings over the past 14 years. I am intimately aware of the mortgages WaMu originated and funded during that time, a substantial portion of which were originated through the worst possible method, mortgage brokers. Brace yourself..

      I have no financial interest in WaMu and could not care less if they survive, fold, or are acquired.
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    • Tue Mar 18th 08:27 AM | Rating: 0 0
      Commented on:
      Bear's Gone - Is Lehman Next?
      Lehman has stying power; yes, they made some BIg MBS mistakes but have written down the value by almost 100%. They'll continue to get slapped around but will survive this and be stronger for it in '09 and going forward.
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    • Tue Mar 18th 08:20 AM | Rating: 0 0
      Commented on:
      Next Up: Lehman Brothers?
      Lehman has stying power; yes, they made some BIg MBS mistakes but have written down the value by almost 100%. They'll continue to get slapped around but will survive this and be stronger for it in '09 and going forward.
      View article »
    • Sat Mar 8th 08:52 AM | Rating: 0 0
      Commented on:
      Banks Using Leverage to Force Home Equity Repayments
      This is just another example of “you’re damned if you do and you’re damned of you don’t”. The mortgage lending institutions are being chastised and demonized because they expanded their guidelines and approved borrowers for mortgages that would “normally” not be approved for a mortgage. Now the lenders are being demonized for more prudent underwriting and guidelines for borrowers who are refinancing their first mortgage with another lender and are asking that the current lender who is in second place to stay in second place without reviewing the current circumstances. Let’s say the second mortgage holder originally granted a $70,000 HELOC on a property appraised for $300,000 that had a first mortgage of $200,000. The first mortgage exposure is less than 67% of the appraised value and the second is 23%; a combined LTV of 90%, marginally risky for the HELOC lender, very little risk for the first mortgage lender. Now let’s say that the property owner wants to refinance the first mortgage and have the second subordinated. The home’s current market value is down a little, about 5% or $285,000. The first mortgage holder’s exposure is the first 70% of the value (very little risk) and the second mortgage holder’s exposure is the next 25% of the value; a combined LTV of almost 95%. Now you’re in to high risk territory. IF the house goes in to foreclosure and is sold after foreclosure expenses at 85% (more likely 65% to 75%) the first mortgage holder gets paid in-full and the second mortgage holder gets back about $32,000, about 46% what is due. Who’s carrying the risk? It sure isn’t the lender in first position; it sure is lender number two who gleefully subordinated the HELOC. Another bad decision for the mean old mortgage lender who won’t lend money to every “Tom, Dick, and Harry”. Frankly, I’m glad lenders are tightening credit and approval guidelines and standards. If YOU were the lender in second position holding the vast majority of the exposure and risk, what would you be doing?
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    • Thu Jan 17th 15:05 PM | Rating: 0 0
      Commented on:
      Mortgage Brokers, RIP
      I’ve been in the retail mortgage origination business for 38 years. Over that past 14 years I’ve worked for one of the most successful lenders in the country. During that time I’ve directly oversaw an average of more than $100 million per month in fundings. To say that a broker who is brokering a loan though me or another national lender can close a loan faster than we can close the same loan ourselves is irrational and ludicrous. While there certainly are a few honest brokers out there, the VAST majority are unethical scumbags with one goal in mind on every loan they do; make as much money for themselves on each loan as possible. Their entire calculation and strategy for the loan was how many points over market and how big of a YSP they could get to build their commission. Whenever I would try to recruit a mortgage broker, they would say “why should I work for you and make 50 to 70 basis points commission per loan when I am making 250 to 600 bps brokering loans?”

      I’ve always operated on a theory that my father taught me: You can scalp a man once or cut his hair a thousand times. I’ve made plenty of money in this business over that past 38 years treating customers right and making a little on every loan. There will be a huge fallout of brokers, it’s already happening. Most of the dropouts are and have been brokers over the past 16 months. However, brokers are like cockroaches (no offense to cockroaches meant) a number of them will survive, there’s no way around it.
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    • Wed Dec 5th 07:23 AM | Rating: 0 0
      Commented on:
      E*Trade, Wells Fargo and Downey: 'Subprime' Problems With Prime Loans
      As I posted before on part of this subject, the home equity loans that Wells Fargo is concerned about are not necessarily subprime loans due to credit scores, they are "less than prime" because they were originated by third party sources, mostly under supervised, less than trustworthy brokers, the source of 90% of all subprime loans whether firsts mortgages or seconds. The loans that were originated and processed directly by their retail origination platform are very well underwritten and high performing loans. Wells Fargo did not do even one of those toxic Option ARMs because of Wells Fargo's conservative underwriting and their believe that those loans were never in the best interest of their customers. Wells Fargo was the number one mortgage originator for almost 10 years, but gave up that spot because they were unwilling to put their customers in exotic toxic mortgages. They knew they missed out on at least 25% of the origination opportunity during '03 to '06, but the decision and their high ethics are proving correct. They’re taking their lumps on these less than perfect home equity loans that they funded for brokers and a few other brokered-in loans, but they have far less exposure than most other major banks and mortgage companies.
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