I was looking for some info on a mortgage lender that I heard went under, when I stumbled onto this website.
http://ml-implode.com/ The Mortgage Lender Implode-O-Meter
The site identifies the 12 lenders that have "imploded" since Dec '06, as well as at-risk lenders. They also have links to what they call "The Top Mortgage Banking Bust News and Commentary", as well as links to blogs on the Housing and Credit Busts.
Thought some of you might find it interesting.
Replies
101Beach FanaticAuthor
New subprime implosion story. HSBC (this planet's 3rd largest bank) has just announced that 'loans-gone-bad' is much worse than thought just 2 months ago. They're upping their estimate by 20%. This is expected to be market-moving today (both in Europe and US).
Update: the implode-o-meter is now up to 18.
http://bloomberg.com/apps/news?pid=20601087&sid=ar.WRLz45vtA&refer=home
HSBC Says Bad-Loan Charges to Exceed Analysts' Estimates by 20%
By Christine Harper
Feb. 7 (Bloomberg) -- HSBC Holdings Plc, Europe's biggest bank, said it's increasing loan-loss provisions for 2006 because mortgages to risky borrowers in the U.S. are going bad faster than the company expected only two months ago.
Provisions will be 20 percent higher than the $8.8 billion that analysts now estimate, London-based HSBC said in an e-mailed statement.
``It is clear that the level of loan-impairment provisions to be accounted for as at the end of 2006 in respect of Mortgage Services operations will be higher than is reflected in current market estimates,'' the bank said in the statement.
HSBC, the world's No. 3 bank by market value after New York- based Citigroup Inc. and Charlotte, North Carolina-based Bank of America Corp., bought Household International Inc. for $15.5 billion in 2003. The purchase of the Prospect Heights, Illinois- based company, a lender to consumers with lower-than-average credit ratings, left HSBC more vulnerable a slowdown in house price growth.
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net .
Update: the implode-o-meter is now up to 18.
http://bloomberg.com/apps/news?pid=20601087&sid=ar.WRLz45vtA&refer=home
HSBC Says Bad-Loan Charges to Exceed Analysts' Estimates by 20%
By Christine Harper
Feb. 7 (Bloomberg) -- HSBC Holdings Plc, Europe's biggest bank, said it's increasing loan-loss provisions for 2006 because mortgages to risky borrowers in the U.S. are going bad faster than the company expected only two months ago.
Provisions will be 20 percent higher than the $8.8 billion that analysts now estimate, London-based HSBC said in an e-mailed statement.
``It is clear that the level of loan-impairment provisions to be accounted for as at the end of 2006 in respect of Mortgage Services operations will be higher than is reflected in current market estimates,'' the bank said in the statement.
HSBC, the world's No. 3 bank by market value after New York- based Citigroup Inc. and Charlotte, North Carolina-based Bank of America Corp., bought Household International Inc. for $15.5 billion in 2003. The purchase of the Prospect Heights, Illinois- based company, a lender to consumers with lower-than-average credit ratings, left HSBC more vulnerable a slowdown in house price growth.
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net .
Edited
SoWal Insider
I was looking for some info on a mortgage lender that I heard went under, when I stumbled onto this website.
http://ml-implode.com/ The Mortgage Lender Implode-O-Meter
The site identifies the 12 lenders that have "imploded" since Dec '06, as well as at-risk lenders. They also have links to what they call "The Top Mortgage Banking Bust News and Commentary", as well as links to blogs on the Housing and Credit Busts.
Thought some of you might find it interesting.
That site is put up by someone who isn't making it selling mortgages or lead generation, so now looking to get advertisers on that site. :roll:
Beach FanaticAuthor
That site is put up by someone who isn't making it selling mortgages or lead generation, so now looking to get advertisers on that site. :roll:
I've been reading Aaron's blogs and posts on various sites for some time now. I seriously doubt he has ever tried to "make it selling mortgages or lead generation." (there is a link to his profile on the site).
He's been looking for the tipping point, and has identified this subprime implosion as "it". It certainly is possible, and many of the more extreme 'housing-led-financial-apocalypse' people beleive the same thing. I for one am going to watch closely.
By the way, since I posted this HSBC update a few hours ago, another subprime lender has gone "kaput", so now we're up to 19.
Edited
Beach FanaticAuthor
when it rains, it pours ...
New Century Financial's stock is down 30% today on this news:
http://www.latimes.com/business/inv...64488.story?coll=la-headlines-business-invest
New Century to restate earnings
The 'sub-prime' lender says it failed to properly record losses when it was forced to buy back mortgages last year.
By E. Scott Reckard, Times Staff Writer
February 8, 2007
In another big mortgage-industry setback, New Century Financial Corp. said Wednesday that it would reduce the profit it had reported for the first nine months of 2006 and record a surprise loss for the final quarter because it had understated the damage caused by a recent rash of soured loans.
Irvine-based New Century is the second-largest lender after Wells Fargo & Co. in the so-called sub-prime mortgage market, for borrowers with credit flaws or other high-risk characteristics. It postponed release of its fourth-quarter earnings, which had been scheduled for today, to an "undetermined future date" and didn't estimate how big its loss would be.
New Century put out the news after the stock market closed. Its shares gained 13 cents to end at $30.16 in regular trading. After hours, the stock plunged nearly 16% to $25.46.
The company said it had failed to account properly for losses sustained when loan buyers forced it to buy back mortgages that quickly went into default. The rising volume of such repurchases has plagued the sub-prime industry recently and drove Ownit Mortgage Solutions Inc. of Agoura Hills, another large sub-prime lender, into bankruptcy proceedings.
New Century said it also would write down the value of the residual interests it retains in loans that have been used to create the mortgage-backed securities that have found eager buyers around the world.
As the housing market cooled over the last year and competition intensified for a shrinking number of mortgage borrowers, some lenders provided loans on overly easy terms to unqualified buyers, analysts have said. Some of these buyers, particularly those who purchased homes for the first time with low or no down payments, are believed to have stopped paying their mortgages when housing prices declined.
For the first three quarters last year, New Century had reported earnings of $268 million, or $4.72 a share, down from $297 million, or $5.10, in the comparable period of 2005. It said it hoped to file amended reports by March 1.
Wall Street analysts had expected a profit of 34 cents to $1.64 a share for the fourth quarter, with an average of $1.08, down from $2 a share a year earlier.
New Century Financial's stock is down 30% today on this news:
http://www.latimes.com/business/inv...64488.story?coll=la-headlines-business-invest
New Century to restate earnings
The 'sub-prime' lender says it failed to properly record losses when it was forced to buy back mortgages last year.
By E. Scott Reckard, Times Staff Writer
February 8, 2007
In another big mortgage-industry setback, New Century Financial Corp. said Wednesday that it would reduce the profit it had reported for the first nine months of 2006 and record a surprise loss for the final quarter because it had understated the damage caused by a recent rash of soured loans.
Irvine-based New Century is the second-largest lender after Wells Fargo & Co. in the so-called sub-prime mortgage market, for borrowers with credit flaws or other high-risk characteristics. It postponed release of its fourth-quarter earnings, which had been scheduled for today, to an "undetermined future date" and didn't estimate how big its loss would be.
New Century put out the news after the stock market closed. Its shares gained 13 cents to end at $30.16 in regular trading. After hours, the stock plunged nearly 16% to $25.46.
The company said it had failed to account properly for losses sustained when loan buyers forced it to buy back mortgages that quickly went into default. The rising volume of such repurchases has plagued the sub-prime industry recently and drove Ownit Mortgage Solutions Inc. of Agoura Hills, another large sub-prime lender, into bankruptcy proceedings.
New Century said it also would write down the value of the residual interests it retains in loans that have been used to create the mortgage-backed securities that have found eager buyers around the world.
As the housing market cooled over the last year and competition intensified for a shrinking number of mortgage borrowers, some lenders provided loans on overly easy terms to unqualified buyers, analysts have said. Some of these buyers, particularly those who purchased homes for the first time with low or no down payments, are believed to have stopped paying their mortgages when housing prices declined.
For the first three quarters last year, New Century had reported earnings of $268 million, or $4.72 a share, down from $297 million, or $5.10, in the comparable period of 2005. It said it hoped to file amended reports by March 1.
Wall Street analysts had expected a profit of 34 cents to $1.64 a share for the fourth quarter, with an average of $1.08, down from $2 a share a year earlier.
Beach Fanatic
And the point to all of this? 
Beach Lover
Does anyone know the proportion of sub prime mortgages we have on 30A in comparison the the national average?
Beach Lover
Does anyone know the proportion of sub prime mortgages we have on 30A in comparison the the national average?
This article may give you some related data, but not exactly what you are looking for... I know it is a bit dated, but it shows how speculative this market from Pcola to Panama City is and has been...
http://www.sptimes.com/2005/06/06/Columns/New_rage_in_mortgages.shtml
From the article:
"In other parts of Florida, the boom in interest-only mortgages is even more intense. In Fort Lauderdale, a third of home buyers used interest-only mortgages last year, while 6.7 percent used them in 2001. In Panama City, 60 percent of home buyers chose interest-only loans in 2004, up from just 5 percent in 2001.
And in what may be Florida's most speculative area for real estate investing - Fort Walton Beach, located between Pensacola and Panama City - 71 percent of mortgage borrowers tapped interest-only loans in 2004. In 2001, only 1.9 percent chose them.
That's the highest percentage of interest-only loans in any market nationwide tracked by LoanPerformance."
Beach FanaticAuthor
And the point to all of this?
Everybody has been trying to figure out if we are having a hard or soft landing in real estate ... have we bottomed out or is there another leg down yet to come? Important questions to ponder, whether you are a buyer or a seller (or a good RE agent wanting to provide sound information to his/her clients).
Maybe a subprime collapse has little or no direct impact in the South Walton area ... I don't know. But it is certainly a piece in the puzzle of the bigger questions ...
... will we have a recession? ... will the consumer stop spending? ... will housing prices decline in '07? ... will liquidity dry up? ... is unemployment going to rise? ... will loan standards change? ... will loan problems seep into areas other than subprime? ... is the Fed's next move to raise or lower? ... what's going to happen to the US$?
I spend a lot of time trying to connect these dots. (I know, "get a life", right?)
Edited
SoWal Insider
Maybe a subprime collapse has little or no direct impact in the South Walton area ... I don't know. But it is certainly a piece in the puzzle of the bigger questions ...
Brings to mind an old rhyme:
For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.
SoWal Insider
... will we have a recession? ... will the consumer stop spending? ... will housing prices decline in '07? ... will liquidity dry up? ... is unemployment going to rise? ... will loan standards change? ... will loan problems seep into areas other than subprime? ... is the Fed's next move to raise or lower? ... what's going to happen to the US$?
I spend a lot of time trying to connect these dots. (I know, "get a life", right?)
What you should spend time pondering is WHAT is going to happen to prevent the above from happening. When you come up with an answer, I'd love to hear it.
Beach Fanatic
SoWal Insider
Beach Fanatic
What you should spend time pondering is WHAT is going to happen to prevent the above from happening. When you come up with an answer, I'd love to hear it.
The obvious answer......THE FED.
Beach Fanatic
... will we have a recession? ... will the consumer stop spending? ... will housing prices decline in '07? ... will liquidity dry up? ... is unemployment going to rise? ... will loan standards change? ... will loan problems seep into areas other than subprime? ... is the Fed's next move to raise or lower? ... what's going to happen to the US$?
We won't have a recession but we will have a slowing of growth ( 1-2% GDP growth). The consumer will negligibly cut back on spending. Housing prices will continue to erode. Liquidity will not dry up, the FED will make sure of that. Unemployment will remain the same. Loan standards will change and be more stringent ( I think they already have. This is the bitter and much needed medicine). The subprime loan problem WILL seep into other areas, it has to (this will cause the FED to become aggressive in lowering rates). The US$ is going lowering because of all of the above, BUT that may be the silver lining by bringing in a large new source of demand. This is all a normal occurence in the business cycle. We have gone through this before and we will go through it again.
We won't have a recession but we will have a slowing of growth ( 1-2% GDP growth). The consumer will negligibly cut back on spending. Housing prices will continue to erode. Liquidity will not dry up, the FED will make sure of that. Unemployment will remain the same. Loan standards will change and be more stringent ( I think they already have. This is the bitter and much needed medicine). The subprime loan problem WILL seep into other areas, it has to (this will cause the FED to become aggressive in lowering rates). The US$ is going lowering because of all of the above, BUT that may be the silver lining by bringing in a large new source of demand. This is all a normal occurence in the business cycle. We have gone through this before and we will go through it again.
SoWal Insider
Although I am not thrilled with site layout that bcd posted which puts the top 25 lenders, but right above it says 19 have imploded and put the closed or bk businesses below (implode o-meter)
I have a feeling the mortgage companies listed are just the tip of the iceberg. The 19 defunct cos. most likely did not sell those subprime loans directly on Wall Street, but most likely sold them in bulk transactions to the top 25. Those top 25 not only made subprime loans (BBB) but also Alt A, A- loans, as well as some of them the exotic ARM programs.
We still have yet to see how the impact of defaults to the top 25 is going to trickle down to hedge funds, pension funds, and mainly derivatives (an unregulated market :shock: (almost 400 trillion dollars) and when mortgages go bad, they may not have the financial assets to withstand such a influx of defaults.
I've been in the mortgage business 22 years and I can tell you Subprime lending has never been tested by a severe downturn in house prices and the economic cycle to this extent.
We still need to see how all this plays out IMO.
I have a feeling the mortgage companies listed are just the tip of the iceberg. The 19 defunct cos. most likely did not sell those subprime loans directly on Wall Street, but most likely sold them in bulk transactions to the top 25. Those top 25 not only made subprime loans (BBB) but also Alt A, A- loans, as well as some of them the exotic ARM programs.
We still have yet to see how the impact of defaults to the top 25 is going to trickle down to hedge funds, pension funds, and mainly derivatives (an unregulated market :shock: (almost 400 trillion dollars) and when mortgages go bad, they may not have the financial assets to withstand such a influx of defaults.
I've been in the mortgage business 22 years and I can tell you Subprime lending has never been tested by a severe downturn in house prices and the economic cycle to this extent.
We still need to see how all this plays out IMO.
Beach Lover
The Clerk of Courts lists 8 Foreclosures over the next 30 days.
Below are some of them.
http://clerkofcourts.co.walton.fl.us/default.aspx?id=31
FORECLOSURE: LOT 15 BLK H FRANGISTA BEACH 2ND ADD
FORECLOSURE: UNIT 312 AMALFI COAST RESORT CONDO
FORECLOSURE: LOT 104 DRIFTWOOD ESTATES PH 1B
FORECLOSE: UNIT 3010 CIBONEY CONDO
FORECLOSURE: LOT 2 BUENA VISTA
Would this be considered a significant number of foreclosures?
Below are some of them.
http://clerkofcourts.co.walton.fl.us/default.aspx?id=31
FORECLOSURE: LOT 15 BLK H FRANGISTA BEACH 2ND ADD
FORECLOSURE: UNIT 312 AMALFI COAST RESORT CONDO
FORECLOSURE: LOT 104 DRIFTWOOD ESTATES PH 1B
FORECLOSE: UNIT 3010 CIBONEY CONDO
FORECLOSURE: LOT 2 BUENA VISTA
Would this be considered a significant number of foreclosures?
Beach Fanatic
This is the time to be shopping on Wall st. for opportunity being created by the sub-prime sell off created by HSBC's revolation. The weak shall perish, the strong propsper. I have owned Citicorp for 4 years. If it goes below 50 I will add. Subprime is negligible to them looking at the big picture. I bought WAMU today at 43.20....I will add to it as it goes lower( 5% yield and a strategic acquisition target for the major banks as a kicker).
Wall ST. always over-reacts and throws the baby out with the bath water. Again, this is not new news about sub prime lenders. It has been discussed widely on this board as well as the media in general. Use this to buy great companies ( Wells Fargo, Citicorp, JP Morgan, Bank of America ) in case they sell off appreciably because investors panic and sell the blue chips along with the crap !!
Wall ST. always over-reacts and throws the baby out with the bath water. Again, this is not new news about sub prime lenders. It has been discussed widely on this board as well as the media in general. Use this to buy great companies ( Wells Fargo, Citicorp, JP Morgan, Bank of America ) in case they sell off appreciably because investors panic and sell the blue chips along with the crap !!
SoWal Insider
... The subprime loan problem WILL seep into other areas, it has to (this will cause the FED to become aggressive in lowering rates).
I'm still betting that the next rate move (if there is one) will be up. The US needs all the help it can get in attracting much needed capital to keep paying off the interest on its debt. Moreover, the Fed will want to distance itself from the "easy, exotic money machine" it created that made homeOWERS out of the masses (Greenspan started the trainwreck when he touted ARMs vs Fixed as the 'way to go' just a few months before he started jacking up the rates.
). If Ben and Co. see the need to lower the rates, the U.S. will be in seriously deep do-do.
SHELLY'S ANSWER TO GOOFER'S "STRAW HAT" THEORY
.
Edited
SoWal Insider
This is the time to be shopping on Wall st. for opportunity being created by the sub-prime sell off created by HSBC's revolation. The weak shall perish, the strong propsper. I have owned Citicorp for 4 years. If it goes below 50 I will add. Subprime is negligible to them looking at the big picture. I bought WAMU today at 43.20....I will add to it as it goes lower( 5% yield and a strategic acquisition target for the major banks as a kicker).
Wall ST. always over-reacts and throws the baby out with the bath water. Again, this is not new news about sub prime lenders. It has been discussed widely on this board as well as the media in general. Use this to buy great companies ( Wells Fargo, Citicorp, JP Morgan, Bank of America ) in case they sell off appreciably because investors panic and sell the blue chips along with the crap !!
Goofer, I do not think the major Banks will become defunct due to subprime loans, I think that delinquincies will rise more than HSBC's "revelation"
HSBC, as well as some of the Banks like Chase and Citicorp, tried to get into a lucrative market with subprime loans and they went to play ball without a mitt. I started in the subprime market 22 years with one of the first subprime second mortgage lenders. I also was constantly recruited by the above lenders to come and show them how to enter the business years later.
IMO, the poo is going to hit the fan with much more impact than anticipated as a trickle down effect to the hedge funds, derivatives, and every other firm these Banks lent money to who played in the sandbox with them. No. its not news about subprime lending defaults, but what no one really talks about the potential trickle down effect.
I agree Wall Street overreacts, but this time I am taking the back seat, I've played in this sandbox and know what's still buried. ;-)
I'm still betting that the next rate move (if there is one) will be up. The US needs all the help it can get in attracting much needed capital to keep paying off the interest on its debt. Moreover, the Fed will want to distance itself from the "easy, exotic money machine" it created that made homeOWERS out of the masses (Greenspan started the trainwreck when he touted ARMs vs Fixed as the 'way to go' just a few months before he started jacking up the rates.
SHELLY'S ANSWER TO GOOFER'S "STRAW HAT" THEORY
.
I agree on the rate increase and BTW- that looks like the hats they wore in that movie with Mel Gibson and the aliens.
Edited
Beach Fanatic
My playing days go back to the early 70's before the first oil embargo imposed by King Faisal. What I have learned is that 1) we ALWAYS muddle through no matter what the disaster dejour 2) it has always paid to be a buyer on these perceived "the end is near" scenarios. I see no reason to change my playbook now. BTW, Shelly...that "straw hat must be made of gold" since my theory proved very prescient last August regarding JOE and the other housing stocks I bought. 
SoWal Insider
BTW, Shelly...that "straw hat must be made of gold" since my theory proved very prescient last August regarding JOE and the other housing stocks I bought.
When did you sell?
Beach Fanatic
SHELLY, if you go back and read my posts , you will see that info. btw, still long a few shares of JOE. did sell march 60's at 3 on this week's run up. also remember my pm to you on energy stocks ( cvx ). that was up 20% in a short time. ;-)
Beach Fanatic
I'm still betting that the next rate move (if there is one) will be up. The US needs all the help it can get in attracting much needed capital to keep paying off the interest on its debt.
What debt? You know Clinton had a surplus...
http://www.marketwatch.com/news/sto...x?guid={A5547C6E-A23F-40A0-9EDA-445386E50184}
Moreover, the Fed will want to distance itself from the "easy, exotic money machine" it created that made homeOWERS out of the masses
In your opinion, should the masses not owe/own homes? Why did the FED make money easy?
(Greenspan started the trainwreck when he touted ARMs vs Fixed as the 'way to go' just a few months before he started jacking up the rates.
Are you suggesting he's @ fault for an individual's decisions?...
. If Ben and Co. see the need to lower the rates, the U.S. will be in seriously deep do-do.
Why?
Edited
SoWal Insider
What debt?
Are you suggesting he's @ fault for an individual's decisions?...
I suspect when Greenspan made his remarks, that were hailed by the mortgage/banking/RE industry as manna from heaven, he kinda had the idea he would start raising the interest rates pretty soon (and he did). At the time the industry was like hot,glowing grey charcoal brickettes....and Greenspan was the yahoo who squirts a full can of charcoal starter over the top.
As for the sub-prime/exotic mortgage bust....I don't believe for a minute that any banker/economist/mortgage broker with a single working brain cell couldn't see that mess coming (I can easily forgive the 70-year-old granny from Guatemala who got suckered into their schemes.)
If Ben and Co. see the need to lower the rates, the U.S. will be in seriously deep do-do.
Why?
(According to the Government)
Stock market good...........check
Unemployment rate good...check
Inflation OK.....................check
Wages raising..................check
Corporate profits good......check
Consumer sentiment good..check
(According to NAR)
Housing Market Recovering.......check
Mortgage Rates are GREAT!......check
NOW is the BEST time to Buy!...check
[The last statement reminds me of the joke-sign over the bar that reads "Free Beer Tomorrow"]
Why on earth would the Fed consider lowering rates when everything is going along just swell? If they do, they must know of some type of ecomonic problem they haven't been telling us about..
Edited
SoWal Insider
IMO, the poo is going to hit the fan with much more impact than anticipated as a trickle down effect to the hedge funds, derivatives, and every other firm these Banks lent money to who played in the sandbox with them. No. its not news about subprime lending defaults, but what no one really talks about the potential trickle down effect.
I agree Wall Street overreacts, but this time I am taking the back seat, I've played in this sandbox and know what's still buried. ;-)
So is it true that soon people applying for mortgages may actually have to 'prove' they can pay the money back???
I mean, they may have to provide some sort of {real} documentation that they actually have a job and salary--and that the mortgage broker and underwriter may actually 'check' to make sure they're telling the truth??? 
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