BottomFisher

ABS Market Shows Signs of Life: Expecting Upside From FMD

If this article is right and the market opens back up for FMD you're probably looking at $10/share once they announce any kind of a securitization. Even at this price the stock would still be incredibly cheap given that they earned over $4/share when the markets were health.

Evidence of "Walking Away" In WaMu Mortgage Pool

Scary stuff! Am I reading the chart right? These 700+ average FICO scores are walking away in less than eight months with 22% average initial equity?

Mortgage Lenders Toast Wall Street with Kool Aid

As FIG Trader said get you facts straight. IMB had less than 3% of their portfolio in subprime. There losses occured primarily due to four distinct problems.
1) They had slightly over $1BN lent out homebuilders who are now in serious distress. 2) They marketed an 80/20 product in which they provided the 80% (but still were part of a 100% financing product). 3) They had a small portfolio of second lien products. 4) They held a sizeable portion of RMBS that had to be marked down substantially when the market collapsed. Since they have now effectively written off close to 40% of their home builder portfolio, eliminated all previous problem loan products and substantially reserved against said problem loan products, substantially written down their RMBS portfolio (10% on AAA, 20% on AA, etc.) and continue to have to thriving business (loan servicing and reverse mortgage that are earning approximately $2/share, it is not unreasonable to assume the the worst is behind them. Barring a total collapse in real estate prices that take prices down another 20% nationwide from current levels, they should be profitable by the end of 2008. Nothwithstanding any of the foregoing, it is a high risk /high reward proposition.