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NEW -> Contingent Buyer Assistance Program
Ranger Rick,





I think the goverment is only going to help the low-income homeowners and still going to punish the subprime lenders. Dont know how this will help the subprime defaults - only time will tell.
 
The mainstream media appears to be picking up on the problems. From the front page of MSN on 3/15/07





<a href="http://articles.moneycentral.msn.com/News/CommunityGroupsWarnOfDefaultTsunami.aspx">Community groups warn of default 'tsunami'</a>
 
<a href="http://www.ocregister.com/ocregister/homepage/abox/article_1620584.php">Layoffs at Ameriquest parent</a>

<a href="http://www.msnbc.msn.com/id/17650758/">Subprime fallout, Ameriquest cuts 3,000 jobs</a>

This can't be good for the local economy.
 
It isn't clear to me whether all 3,000 jobs are in Orange? If so, it is pretty bad indeed for local economy. Hopefully things wont get much worse.
 
Good article from San Diego:


<a href="http://www.signonsandiego.com/uniontrib/20070318/news_lz1b18calbrea.html">


No denying mortgage crisis likely will worsen</a>





<em>"</em><em>

<body.content>

Most people, it is commonly said, go through five stages when dealing with doom: denial, anger, bargaining, depression and acceptance.

</body.content>

</em>

<p> <em>As far as San Diego bankruptcy attorney Mark Miller is concerned, many homeowners are only in the “denial” stage regarding the subprime lending crisis, although they may soon slip into “anger.</em><em>"</em></p>
 
<a href="http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&Date=20070320&ID=6639132">People's Choice Home Loan files for Chapter 11</a>




<strong>Another employer in Irvine bites the dust.</strong>





<p> NEW YORK (Reuters) - People's Choice Home Loan Inc., a California-based mortgage lender to people with poor credit histories, filed for Chapter 11 bankruptcy protection on Tuesday, according to court papers.</p>

<p> The Irvine, California-based unit of People's Choice Financial Corp., a real estate investment trust, became at least the fourth large U.S. subprime lender to seek protection from creditors in the last three months.</p>

<script src="http://news.moneycentral.msn.com/relevance/js.asp" type="text/javascript"></script>

<xml src="http://news.moneycentral.msn.com/relevance/relatednews.axd?articleid=6639132" id="RAData"></xml>

<p> It listed more than $100 million of both assets and debts in its filing with the U.S. Bankruptcy Court for the Central District of California.</p>

<p> Many subprime lenders have struggled from rising delinquencies and defaults, and more than two dozen have quit the industry in the last year.</p>

<p> People's Choice and its lawyers did not immediately return calls and e-mails seeking comment.</p>

<p> Founded in 1999 by Neil Kornsweit, a former executive at subprime lender Aames Financial Corp., People's Choice employs about 1,150 people nationwide, according to its Web site.</p>

<p> The company has retail offices in four states and wholesale offices in eight, and offered its first public securitization in April 2004, the site said.</p>

<p> People's Choice listed Wachovia Corp. as its largest unsecured creditor, but didn't say what it owes the bank. Among other listed creditors are Residential Funding Corp., Credit Suisse and Bear Stearns Mortgage Capital Corp.</p>

<p> .</p>

<p> On March 14, People's Choice Financial withdrew plans with U.S. securities regulators to register common stock, citing "various business and market reasons."</p>

<p> Subprime mortgage lenders that recently sought Chapter 11 protection include Mortgage Lenders Network USA Inc., Ownit Mortgage Solutions Inc. and ResMae Mortgage Corp.</p>

<p> Others, such as Irvine-based New Century Financial Corp. and Santa Monica, California's Fremont General Corp. , have this month cut jobs or announced planned cuts.</p>
 
Wells Fargo cuts 500 jobs in mortgage unit

"Most of the cutbacks, concentrated in South Carolina, Arizona and California, stem from Wells Fargo’s recent decision to make it more difficult for borrowers with blemished credit records to qualify for subprime mortgages."
 
RPT-Wells Fargo cuts another 121 subprime jobs

"Wells Fargo & Co., the fifth-largest U.S. bank, on Tuesday said it is eliminating 121 jobs in Tempe, Arizona, in a unit that offers mortgages to higher-risk borrowers.

<p class="textBodyBlack"> The cuts are on top of 323 previously announced job cuts in the home loan unit, including 252 in Fort Mill, South Carolina, and 71 in Concord, California."</p>
 
<p>I know some here read Calculated Risk but since this focuses on mortgage fraud I thought that it would be a good addition here for those who don't read Calculated Risk. I also think that it is great that Tanta shares the experience of how mortgage backed securities and the risk involved with the public. The few that I have met in the capital markets departments of lenders are not anywhere near as willing as Tanta to discuss what they do and the stuff they see. </p>

<p><a href="http://calculatedrisk.blogspot.com/2007/03/unwinding-fraud-for-bubbles.html">http://calculatedrisk.blogspot.com/2007/03/unwinding-fraud-for-bubbles.html</a></p>

<p>I believe the M. Mouse signature is very true. I believe this because the company I worked for started to crack down on the "stated income" loans because they had to buy some of them back. One of the loans they had to buy back was a Blockbuster clerk who made $9k a month. Gee I wonder what the problem is here? Why the loan officer, underwriter, underwriting supervisor (who signs off on the deal), funder or the capital markets auditor thought this was reasonable and not think for a second that this would be a loan that no one would buy if they ever saw it. This is where Tanta's third theory comes to reality in that a few bad apples shouldn't spoil the basket but the mold just starts to spread. </p>
 
Lennar profit plummets

Homebuilder reports 73% decline in quarterly net income amid ongoing softness in housing market.

<p class="storysubhead"><a href="http://money.cnn.com/2007/03/27/news/companies/lennar/index.htm?postversion=2007032707">http://money.cnn.com/2007/03/27/news/companies/lennar/index.htm?postversion=2007032707</a></p>

<p class="storysubhead"> </p>
 
<p>Noteworthy article in the Economist that provides their perspective of the US housing market along with researched stats. Seems like their fear is not so much the bubble bursting but that Congress will pass bandaid laws to cover up a laceration, which will make things worst.</p>

<p><a href="http://www.economist.com/finance/displaystory.cfm?story_id=8885853">http://www.economist.com/finance/displaystory.cfm?story_id=8885853</a></p>

<p> </p>
 
<strong>34 percent of homeowners are clueless about their mortgage





</strong>http://biz.yahoo.com/brn/070326/21330.html?.v=1&.pf=loans




 
Graph - Speaking of Tanta's fraud piece, do you think that this MLS property might be one of those? MLS # P558800. The buyer is offering "financial incentives upon close of escrow."<strong>


</strong>
 
Eval - I checked the listing on Zip and while it is overpriced it doesn't look like it is kickback overpriced. But what is disturbing is that the listing agent put that comment in the listing. They can get in trouble for that. Hopefully tomorrow I will be able check the title history and I will know more. By the way that is actually a nice area of Santa Ana.
 
mah posted this to the blog. This is too important not to post here as well.





<a href="http://www.bloomberg.com/apps/news?pid=20601103&sid=alOjASNOLKcQ&refer=us"><strong>Subprime Mortgage Collapse Eviscerates California Headquarters </strong></a>





The MSM is starting to pick up on the fact that the collapse of sub-prime lending is going to hurt Irvine's economy.
 
<a href="http://www.housingtracker.net/affordability/california/santa-ana">Santa Ana, California Affordability</a>

The chart on this link speaks volumes.
 
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