Welcome to Las Vegas, for the 2009 American Securitization Forum

[metalman]

Re: Welcome to Las Vegas, for the 2009 American Securitization Forum

In the real world FHA lenders are doing great this year, not silly money, but are pulling in much more $$ then say a typical corporate economist.

Jumbos are harder to get, but still easy if you can actually afford the mortgage by traditional measures.

Perhaps the real action is looking at distressed mortgages, deep discounts, returns look better then funding new mortgages on still overpriced homes.

Ever wonder what happend to the other financial brain behind Countrywide? Dave Sambol went to Bank of America, but what about Stan Kurland? The guy that was smart enough to bail before the crash.

Well he started a distressed mortgage fund and loss mitigation company! Ha Ha.

In other words, buy back the same loans from taxpayers for pennies on the dollar as they got GW Bush to dump onto (I mean purchased by) taxpayers at full, top of market price, as his last presidential act. LOL.

PennyMac (ha ha, love the name, LOL) http://www.pennymacusa.com/

'PennyMac is a different kind of mortgage company...'

[vanvaley1]

Re: Welcome to Las Vegas, for the 2009 American Securitization Forum

Perhaps this link provided by Rajiv is what you're looking for?

Thanks. Remember reading that but had forgot how emphatic the lender was that money would be used 'elsewhere'.

[c1ue]

Re: Welcome to Las Vegas, for the 2009 American Securitization Forum

Could something like that be used here to keep the inside info of the banksters in check when they did the securitization bundling?

The weak point with this proposal is that the assumption made is that the 'bad' parts of securitization are only a portion of the bundle.

It is now quite clear that the problems weren't just a portion, it was a wholesale inflation of quality in every part of the bundle.

BBB and lower tranches going to zero are no more nor less fraudently rated than a AAA losing 10%.

The analogy I would use is the old pea under the 3 walnuts scheme.

If the pea is actually held in the scammer's little finger, then all 3 walnuts are equally losing propositions.

[vanvaley1]

Re: Welcome to Las Vegas, for the 2009 American Securitization Forum

That would probably be an FHA loan. They are tough loans in bad times. In good times the underwritters looked the other way on a lot of regulations. Lot size, private well agrements. easments, peeling paint, older roofs. etc.

We heard it was an FHA loan. Good call.

[cjppjc]

Re: Welcome to Las Vegas, for the 2009 American Securitization Forum

We heard it was an FHA loan. Good call.

Many lenders are forcing people into FHA loans. Even if the buyer has 20% down, and great credit. The FHA loan is easier to re sell. It has so many strings to attached to it, that it can become a real burden. For example:

You want to purchase a condo. FHA will not approve the loan if the ratio of owner occupied units to rental units in the building does not meet a certain threshold. I think around 70%. Also the project has to be fully completed. No litigation currently involving the complex. In a downmarket these thresholds are harder to get over. In previous years a lot of things were overlooked. Although I never found this ratio to be overlooked.Believe me when I say a lot of white out was used in the last couple of years. Not just on mortgage applications.