Housing Bubble Bursting?

[Pamela Crowley (Florida)]

Please be very careful of any and all contracts you sign with any clients. Have both your E&O carrier and your personal attorney go over them very carefully BEFORE you sign anything.

 

[Randolph Kinney]

China has no problem with subprime losses

Liquid Chinese banking sector absorbs subprime blow

'It is quite fortunate that a big chunk of these subprime assets ended up in China. It is one of the countries that can more easily absorb the losses due to its rapidly growing economy.' — Matt McKeith, First State Investments

Among rating agencies, Moody's Investors Service retained its ratings on the Chinese banks in the wake of the disclosures.

"Chinese banks are traditional commercial banks, largely funded by domestic deposits, and exhibit good liquidity," wrote Moody's senior credit officer May Yan in a statement.

"These banks have no asset-backed or commercial paper funding needs... Therefore, the recent deterioration in the credit markets has had a minimal impact on their liquidity."

 

[hastalavista]

Liquid Chinese banking sector absorbs subprime blow

'It is quite fortunate that a big chunk of these subprime assets ended up in China. It is one of the countries that can more easily absorb the losses due to its rapidly growing economy.' — Matt McKeith, First State Investments

This guy is going to be a favorite in Beijing!

 

[Randolph Kinney]

Foreign Regulation / Oversight of US Financial Products

Calls Grow for Foreigners to Have a Say on U.S. Market Rules

Politicians, regulators and financial specialists outside the United States are seeking a role in the oversight of American markets, banks and rating agencies after recent problems related to subprime mortgages.

Their argument is simple: The United States is exporting financial products, but losses to investors in other countries suggest that American regulators are not properly monitoring the products or alerting investors to the risks.

“We need an international approach, and the United States needs to be part of it,” said Peter Bofinger, a member of the German government’s economics advisory board and a professor at the University of Würzburg.

While regulators in the United States have not been receptive to the idea in the past, analysts said that Europe and Asia had more leverage now. Washington might have to yield if it wants to succeed in imposing bilateral regulations on government-owned investment funds from emerging economies.

“America depends on the rest of the world to finance its debt,” Mr. Bofinger said. “If our institutions stopped buying their financial products, it would hurt.”

Here we go, the result of being a debtor nation. We cheated foreign investors with lax oversight and unenforced regulation as they see it. The world is now looking at the U.S. differently now. It was the safe place to be, the safe place to invest.

Could this be the beginning of the transition to a new hegemony?

 

[Terrel L. Shields]

'It is quite fortunate that a big chunk of these subprime assets ended up in China. It is one of the countries that can more easily absorb the losses due to its rapidly growing economy.'

like they don't know how to hire a lawyer in America???

the result of being a debtor nation. We cheated foreign investors with lax oversight and unenforced regulation as they see it. The world is now looking at the U.S. differently now. It was the safe place to be, the safe place to invest.

Too true and if they don't buy our Treasuries...how we gonna finance our debt???? We ain't, short story.

 

[Randolph Kinney]

Too true and if they don't buy our Treasuries...how we gonna finance our debt???? We ain't, short story.

The government debt is the first choice for a safe-haven. If there is a risk in the non-government debt, it is priced accordingly. In fact the price may be so high (high interest rate), it effectively denies credit. This is a "classic crowding" out effect. This will slow or retard economic growth significantly.

The U.S. has enjoyed lower than normal interest rates on all debt for the last 10 years. Government spending and the trade deficit has been financed with foreign money. That foreign money is going away from non-government debt now. That is why the FED is going to have to lower interest rates.

 

[Randolph Kinney]

FED - here comes new mortgage products from the government

The Fed: New mortgage products could help, Bernanke says

WASHINGTON (MarketWatch) -- The private sector and Congress should create new, affordable mortgage products that would help some homeowners refinance their mortgages and keep their homes, Federal Reserve Chairman Ben Bernanke suggested in a letter released Wednesday.

In the letter to Sen. Charles Schumer, D-N.Y., Bernanke repeated that the Fed is closely monitoring markets and stands ready to act if needed. The Fed issued a statement with almost identical wording on Aug. 17 after it cut the discount lending rate to 5.75%. The letter from Bernanke was dated Aug. 27 and released by Schumer's office on Wednesday.

 

[MARK JOLLIFF]

Yesterday in the snail mail I received a letter with a "hand written" address to me from Wacovia Mortgage. They are looking for some good honest appraisers to add to their network. It went right into file 513. How long do you think that will last? Good honest appraisers come in below value a lot of times and in these days and times most of the times. They couldn't pay me enough at this state of the game to do a mortgage loan appraisal.
I might be fat and ugly, but I ain't stupid.

I did work for them as a WIC( World independant contractor) for 4 years. No one even comes close to them as far as being a good client. Not one negative thing to say about them. Give them a shot. What have you got to lose. I know someone will chime in with "your license". Don't listen to them. World is wonderful!

 

[Randolph Kinney]

High price real estate sales fall sharply

Mortgage woes spread to pricey real estate

NEW YORK - The subprime mortgage crisis is spreading to a somewhat unexpected place: homes costing more than $500,000.

As lending has rapidly gotten more restrictive for borrowers taking out large loans, sales of expensive homes have fallen sharply around the country during what should be one of the busiest seasons for buyers and sellers, mortgage bankers and real estate agents say.

To some degree the change is due to difficulty getting financing, as borrowers are finding fewer lenders willing or able to fund "jumbo" mortgages, loans for amounts greater than $417,000. Such loans are too big to be guaranteed by government-sponsored housing finance agencies Fannie Mae, Freddie Mac or Ginnie Mae.

Some lenders _ such as Countrywide Financial Corp. _ have made a point of saying they're now most focused on making loans that can be guaranteed by Fannie and Freddie.

Other lenders have simply tightened up their lending standards, for example by no longer making jumbo loans to borrowers who can't fully document their income, even if they make large down payments and have stellar credit histories.

In California, where the median home price is well above $500,000, jumbo mortgages are as much as 44 percent of all mortgages issued in certain metro areas, according to data from First American LoanPerformance.

In and around San Francisco, where the median home price is about $1.1 million, the tougher financing environment has created a "hesitancy" and has led to some canceled escrows for buyers around the $1 million range, said Rick Turley, president of the San Francisco and Peninsula Region for Coldwell Banker Residential Brokerage.

 

[Austin]

Some lenders _ such as Countrywide Financial Corp. _ have made a point of saying they're now most focused on making loans that can be guaranteed by Fannie and Freddie.

I didn't know Fannie and Freddie "guaranteed" loans. Is this something new?