surferdude808's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/296970/comments http://seekingalpha.com/article/174505/comments?source=feed#comment-779083 779083
laughable! how about performance linked pay for fdic executives and senior managers. so far their malfeasance has cost the insurance fund $49 billion. moreover, most of these executives and senior managers are still in place and bair has even promoted some of them. do not take my word for it, look at the material loss reviews done by the fdic's inspector general for independent documentation of the malfeasance. the fdic formed a new division (insurance & research) in 1995, based on lessons from the previous crisis. this division is supposed to warn about systemic risk to the insurance fund. they failed spectacularly in this job yet the division director and chief economist remain in place. before the fdic shoots its mouth off again about performance-linked pay, perhaps bair should sit many fdic executives and senior managers in the corner and cut their pay.]]> Thu, 26 Nov 2009 22:40:32 -0500
laughable! how about performance linked pay for fdic executives and senior managers. so far their malfeasance has cost the insurance fund $49 billion. moreover, most of these executives and senior managers are still in place and bair has even promoted some of them. do not take my word for it, look at the material loss reviews done by the fdic's inspector general for independent documentation of the malfeasance. the fdic formed a new division (insurance & research) in 1995, based on lessons from the previous crisis. this division is supposed to warn about systemic risk to the insurance fund. they failed spectacularly in this job yet the division director and chief economist remain in place. before the fdic shoots its mouth off again about performance-linked pay, perhaps bair should sit many fdic executives and senior managers in the corner and cut their pay.]]> http://seekingalpha.com/article/170840/comments?source=feed#comment-746865 746865
guess what, the use of the tax credit as the downpayment is a very common practice. go to fha website FAQs (federalhousingtaxcredi...) see question #19.
"...some state housing finance agencies have introduced programs that provide short-term second mortgage loans that may be used to fund a downpayment..."

this mechanism of using a 2nd to fund the downpayment via a housing agency is why the adminstration recently provided $35 billion to housing authorities and allowed fannie and freddie to buy up to $20 billion in housing agency bonds.

fha is taking substantially risks with taxpayer monies, which are fully endorsed by the chairman frank of the house financial services committee as quoted in the NY Times on october 9th:

Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it. “I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”

smalltownbanker, you may live long enough to regret this quote
"The FHA program has historically performed well and its insurance fund has adequately covered its losses. The same goes for VA and USDA Rural Housing programs. Comparing these to the programs that led to failure in the marketplace is ridiculous and unsubstantiated."

the best thing about this is that time will tell if your view is correct.
]]> Thu, 05 Nov 2009 16:02:27 -0500
guess what, the use of the tax credit as the downpayment is a very common practice. go to fha website FAQs (federalhousingtaxcredi...) see question #19.
"...some state housing finance agencies have introduced programs that provide short-term second mortgage loans that may be used to fund a downpayment..."

this mechanism of using a 2nd to fund the downpayment via a housing agency is why the adminstration recently provided $35 billion to housing authorities and allowed fannie and freddie to buy up to $20 billion in housing agency bonds.

fha is taking substantially risks with taxpayer monies, which are fully endorsed by the chairman frank of the house financial services committee as quoted in the NY Times on october 9th:

Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that the defaults were, in essence, worth it. “I don’t think it’s a bad thing that the bad loans occurred,” he said. “It was an effort to keep prices from falling too fast. That’s a policy.”

smalltownbanker, you may live long enough to regret this quote
"The FHA program has historically performed well and its insurance fund has adequately covered its losses. The same goes for VA and USDA Rural Housing programs. Comparing these to the programs that led to failure in the marketplace is ridiculous and unsubstantiated."

the best thing about this is that time will tell if your view is correct.
]]> http://seekingalpha.com/article/171033/comments?source=feed#comment-746841 746841
although i do agree there is no definitive metric like a share price that could be readily looked at for easy credit, but one could have looked at many factors and determined that credit was very easy. the most explicit, which was measurable, was the expilicit price -- in this case the interest rate. here rates on subprime, while higher than prime, were not high enough to compensate for the credit risk.

more interesting signs of lax lending were in non-price terms. as an example, LTVs just exploded higher. also, the piggy-back structures which circumvented the additional protection of PMI to the lender. credit being extended to low fico borrowers. i suppose one could take these non-price terms and convert them into a quantative ranking system, which when added to the explicit price terms, could create the singular metric representing credit laxity or tightness.]]> Thu, 05 Nov 2009 15:48:21 -0500
although i do agree there is no definitive metric like a share price that could be readily looked at for easy credit, but one could have looked at many factors and determined that credit was very easy. the most explicit, which was measurable, was the expilicit price -- in this case the interest rate. here rates on subprime, while higher than prime, were not high enough to compensate for the credit risk.

more interesting signs of lax lending were in non-price terms. as an example, LTVs just exploded higher. also, the piggy-back structures which circumvented the additional protection of PMI to the lender. credit being extended to low fico borrowers. i suppose one could take these non-price terms and convert them into a quantative ranking system, which when added to the explicit price terms, could create the singular metric representing credit laxity or tightness.]]> http://seekingalpha.com/article/169413/comments?source=feed#comment-735355 735355

On Oct 28 02:56 PM Mark Alexander wrote:

> surferdude,
>
> "Loading up their books" is an overstatement. Based on 10-K’s, Fannie’s
> holding of subprime and Alt-A peaked at around $75B at year-end 2009
> – around 3% of Fannie’s mortgage credit portfolio, and around 3%
> of the balance of these mortgages outstanding at the time.]]> Thu, 29 Oct 2009 09:58:14 -0400

On Oct 28 02:56 PM Mark Alexander wrote:

> surferdude,
>
> "Loading up their books" is an overstatement. Based on 10-K’s, Fannie’s
> holding of subprime and Alt-A peaked at around $75B at year-end 2009
> – around 3% of Fannie’s mortgage credit portfolio, and around 3%
> of the balance of these mortgages outstanding at the time.]]> http://seekingalpha.com/article/169413/comments?source=feed#comment-733930 733930 Wed, 28 Oct 2009 11:00:46 -0400 http://seekingalpha.com/article/161550/comments?source=feed#comment-677698 677698 Tue, 15 Sep 2009 12:34:16 -0400 http://seekingalpha.com/article/118344/comments?source=feed#comment-375454 375454 Wed, 04 Feb 2009 10:28:25 -0500 http://seekingalpha.com/article/116074/comments?source=feed#comment-364139 364139
first, the fdic did not pay a pre-payment fee as the advance will be assumed by the acquirers. moreover, if the fee was going to be paid, feet dragging by the fdic caused it to rise. at the time IMB failed, the fee was less than half of the $341 million. the fdic did not pay back the advance at that time because they did not have the cash. as interest rates fell, the fee rose; hence, it was the fdic actions that were contributing to the cost.

it is a red herring to compare the size of the advance ($6.3b) to the resolution cost of IMB ($8.5b to $9.4b). Advances, deposits, or other borrowings do not cause losses. the losses at IMB came from the crappy construction and residential mortgage loans on the other side of the balance sheet. your inaccurate comparison of the advance to resolution cost shows you have a fundamental lack of understanding of financial intermediaries. stick to writing about something you actually know.

]]> Fri, 23 Jan 2009 11:09:10 -0500
first, the fdic did not pay a pre-payment fee as the advance will be assumed by the acquirers. moreover, if the fee was going to be paid, feet dragging by the fdic caused it to rise. at the time IMB failed, the fee was less than half of the $341 million. the fdic did not pay back the advance at that time because they did not have the cash. as interest rates fell, the fee rose; hence, it was the fdic actions that were contributing to the cost.

it is a red herring to compare the size of the advance ($6.3b) to the resolution cost of IMB ($8.5b to $9.4b). Advances, deposits, or other borrowings do not cause losses. the losses at IMB came from the crappy construction and residential mortgage loans on the other side of the balance sheet. your inaccurate comparison of the advance to resolution cost shows you have a fundamental lack of understanding of financial intermediaries. stick to writing about something you actually know.

]]> http://seekingalpha.com/article/114751/comments?source=feed#comment-355313 355313 Wed, 14 Jan 2009 09:02:54 -0500 http://seekingalpha.com/article/112851/comments?source=feed#comment-342966 342966 Wed, 31 Dec 2008 18:19:07 -0500 http://seekingalpha.com/article/105657/comments?source=feed#comment-304477 304477 Wed, 12 Nov 2008 16:44:33 -0500