Housing Bubble Bursting?

[Scott Kibler]

Maybe the D's can prove me wrong.

My crystal ball says no.

 

[Randolph Kinney]

Who said Enron-style accounting was dead?

http://www.marketwatch.com/news/story/fremont-auditor-grant-thornton-llp/story.aspx?guid=%7B645BEFB9%2DBC7F%2D47C9%2DBD65%2D386E25B5AD5A%7D

SAN FRANCISCO (MarketWatch) -- Fremont General said late Monday that its auditor, Grant Thornton LLP, resigned roughly eight months after the company hired the firm. The two gave different reasons for the split.

Fremont shares fell 11% to $5.80 during after-hours trading. The stock closed down 5.9% at $6.52 during regular trading on Monday.

Grant Thornton said that during the audit Fremont sometimes didn't provide certain requested information on dates previously agreed upon with management, according to a letter it filed with the Securities and Exchange Commission.


"Additionally, as we resigned prior to completion of the audit, we are unable to evaluate or determine the completeness, sufficiency or timeliness of the information provided in response to our requests," Grant Thornton said in the letter.

In February, the company announced plans to shut down the unit after regulators ordered it to stop offering some subprime mortgage loans. In March, Fremont hired Credit Suisse to help sell the business. It also agreed to unload $4 billion of home loans at a discount.

Fremont said on Monday that it's audit committee will start looking for another auditing firm, but noted that it might not be able to find a replacement.

 

[Randolph Kinney]

U.S. Insured Mortgages Rise at Fastest in Four Years

http://www.bloomberg.com/apps/news?pid=20601203&sid=amEffUsFwodE&refer=insurance

April 2 (Bloomberg) -- The value of U.S. mortgages carrying insurance rose at the fastest monthly pace in at least four years as the subprime lending crisis escalated in February, industry data show.


Insured mortgages climbed 9.4 percent from a year earlier to $676.9 billion, according to the Mortgage Insurance Companies of America, a trade association in Washington. The policies typically cover about a quarter of the loan value.


The data signals lenders, or the investors in home loans, are demanding more protection from defaults as the subprime collapse triggers concerns about all borrowers, said Steve Stelmach, an analyst at Friedman Billings Ramsey & Co. The stocks of insurers such as MGIC Investment Corp. and PMI Group Inc. have been hurt on concern record foreclosures will trigger more claims.

 

[Greg Bell]

I like the "we've hit bottom" crowd, even though that field is getting smaller. Folks, now the the REIC is in full meltdown mode, and millions will eventually lose their jobs (including the illegals), all that does is speed up the crash even faster. The meltdown is just starting. And people think it's bad already? Man, just wait.



Throw in the inability of millions to get new loans, or refi their old toxic loans, and the writing is on the wall.


The Great Unwinding is here. What happens to a country who has lost it's manufacturing base, and the only thing left that they still build - houses - stops too? We'll now find out...


The housing market and the related construction industry is one of the biggest, if not the biggest driver of the economy.

The ability of “anybody with a pulse” (and probably their dog too) to get a loan is what drove the real-estate market.

The ability of people to refinance and cash-out home equity also fueled consumer spending and the economy.

But now a huge segment of prospective home buyers can no longer qualify for a mortgage to purchase a home, and home prices are stagnating and falling in many areas.

“It’s going to be a disaster for many people who don’t have a clue about what happens when a real-estate bubble pops,” said Rogers.Think of this as “the leading edge of the storm,” says Lou Ranieri, who is considered by some to be the father of the mortgage bond market.

 

[Terrel L. Shields]

The data signals lenders, or the investors in home loans, are demanding more protection from defaults as the subprime collapse

Duh, little late in the game, ain't it? The risk weighting is past doing.

housing market and the related construction industry is one of the biggest, if not the biggest driver of the economy.

sadly, with so few labor jobs for those with manual skills, they will hurt the worst...and a higher percentage will lose their homes.

(and probably their dog too)

Editorial page Cartoon in our paper today, Fido is sitting in a chair and across the desk, the Subprime boys are saying, "we didn't realize you might have a problem..."

“the leading edge of the storm,” says Lou Ranieri,

Heaven help us if it is...it will be a hard downturn.

 

[moh malekpour]

new century stock was closed at 91cents per share. 9 months ago, its share was $52 per share. Its share has declined 97.7% this year. Which one declined more, Enron or new century? Should the CEO and owners of new century get the same treatment that Enron got?

 

[Terrel L. Shields]

9 months ago, its share was $52 per share. Its share has declined 97.7% this year. Which one declined more, Enron or new century?

Do you think any hedge funds lost money on that one? Do you think anyone's pension fund had a stake in the hedge fund that will lose money? Do you think there is going to be a spate of lawsuits over this bankruptcy? Do you think this is going to be the only one?

 

[moh malekpour]

Do you think any hedge funds lost money on that one? Do you think anyone's pension fund had a stake in the hedge fund that will lose money? Do you think there is going to be a spate of lawsuits over this bankruptcy? Do you think this is going to be the only one?

Yes to the first 3 and no to the last one

 

[hastalavista]

Do you think any hedge funds lost money on that one? Do you think anyone's pension fund had a stake in the hedge fund that will lose money? Do you think there is going to be a spate of lawsuits over this bankruptcy? Do you think this is going to be the only one?

Being a "hedge" fund, I might think the fund sold the stock short and made a killing?

 

[Randolph Kinney]

Moody's: 40-50 banks on review for downgrade

http://www.marketwatch.com/news/sto...82-4F09-B18D-71AD267B8D35}&dist=TQP_Mod_mktwN

LONDON (MarketWatch) -- Ratings agency Moody's Investors Service Inc. said Tuesday that it has identified 40 to 50 banks whose ratings under the revised Joint Default Analysis bank rating methodology are being placed on review for downgrade.


The move follows the ratings agency's announcement Friday that it refined its JDA methodology with the aim of reducing assumptions regarding the likelihood of government support for banks.


Moody's said the JDA changes are in response to market participants' expressed preference for credit ratings that incorporate but aren't overly reliant on systemic support. The new JDA system applies lower support assumptions, using fewer support levels and giving more weight to bank's intrinsic financial strength.