Mortgage News To Make Your Day
Sep 23rd, 2007 @ 9:22 AM by Alden Smith
In my search this morning for relevant content, I ran across a very interesting site. The site, “The Mortgage Lender Implode-O-Meter“, gives an indication of how many mortgage lenders have gone belly up since December of 2006. Since that time, 159 major U.S. lending operations have “imploded”. Scary indeed. What was scary to me was the list of articles on the site. And I did not find it surprising that the site is currently under litigation.
Recaps of Relevant Articles
I want to recap some of the content on these articles, to give the reader an opportunity to see what is going on, mayhaps behind the scenes. We don’t see some of these things on the evening news. It takes a strong interest to really dig for the pertinent information, and it can be time consuming. I offer it here.
Broker sentenced to 28 years for mortgage fraud in Atlanta
Phillip E. Hill’s mortgage fraud scheme milked millions from inflated home values. He was running a conspiracy that involved loan officers and real estate appraisers and racked up $112 million in fraudulent loans, of which Hill himself pocketed a cool $14 million. A federal judge in Atlanta sentenced Hill to 28 years in prison.
Moody’s Investors Service said banks eased borrowing terms on just 1% of subprime mortgages with interest rates that reset higher in January, April and July. Their research was based on its study on 16 servicers that handle $950 billion of subprime mortgages.
Many feel that the Fed cut was done to protect and bailout the banks. The cost of money had to be brought down sharply or the banks would have to sell collateral (CDOs, CLOs, etc.) in a depressed market and write huge losses in their books. First, they have to find a buyer.
The Beat Goes On
I can go on and on with this. I think there is enough here to make the Sunday afternoon browser more than a bit upset, and will make them put on the thinking cap to determine in their own mids exactly what the situation is about. It is not all about big banking, money markets and what the latest, greatest hedge fund is doing, but is about the impact that this whole profit taking debacle is having on the economy of the United States. The dollar is devaluated, which means we will have more problems at the pump. Because our dollar is weak, it takes more of them to buy a barrel of oil. Rent will skyrocket, and the price of food will continue to climb. Consumers will not be able to buy new homes because of the stricter lending laws. Why do I think that the mortgage market will just put a new spin on this situation, and continue business as usual? One thing I am seeing? Lots of emails from Countrywide offering me the best deal in a lifetime. And I am not even on their mailing list!