Headlines...

NEW -> Contingent Buyer Assistance Program
<p>Lennar's New Homes Fetch 60% Less as U.S. Market Slump Deepens </p>

<p><a href="http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=aKTFOoHM.Jww">http://www.bloomberg.com/apps/news?pid=20601109&refer=home&sid=aKTFOoHM.Jww</a></p>

<p>Jan. 10 (Bloomberg) -- Lennar Corp.'s November sale of 11,000 properties in eight states set a price that may mark the bottom for the U.S. housing market: 40 cents on the dollar. </p>

<p>That's how much Morgan Stanley Real Estate paid for an 80 percent stake in the 32 communities, 60 percent less than the price at which the properties were valued just two months earlier. That's also what some investors say they would pay for distressed land, condominiums, homes and whole developments, whether it's now or later this year. </p>
 
<p>Bernake is revving up his helicopter to drop more free money for wall street .. . $150/barrel oil here we come!!! </p>

<p><a href="http://www.cnbc.com/id/22589686">www.cnbc.com/id/22589686</a></p>

<p class="textBodyBlack">With new signs that the US economy may be heading for recession, Federal Reserve Chairman Ben Bernanke signaled the central bank's willingnesss to cut interest rates again if necessary.</p>

<p class="textBodyBlack">"In light of recent changes in the outlook for and the risks to growth, additional policy easing may be necessary," Bernanke said in prepared remarks to be delivered at a 1 p..m ET speech in Washington. "We stand ready to take substantive additional action as needed to support growth and to provide adequate insurance against downside risks."</p>
 
CNBC is reporting that, <a href="http://www.nytimes.com/2008/01/11/business/11bank.html">the NY Times (Wretched Gretchen)</a> is reporting, it is official, B of A is taking over Countryfried.


<em>


If the deal goes through, Bank of America would brush up against a federal cap that prevents a bank holding company from controlling more than 10 percent of the nation’s deposits. Because Countrywide Bank is a federally insured savings and loan, the rule does not apply. </em>Not exactly true, but it is too late to rip Wretched Gretchen.





<em>Mr. Mozilo is expected to remain as chief executive of Countrywide until the deal closes, probably in the third quarter, people briefed on the transaction said. After that, he would serve on a transition team and would remain with the combined company on an interim basis.</em>

<p><em>He could be entitled to an exit package of roughly $72 million. That would be on top of the $410 million in pay, including $285 million in option gains, that Mr. Mozilo has taken home since he became Countrywide’s chief executive in 1999.</em></p>

<p><em>Selling Countrywide gets Mr. Mozilo out of a tightening financial vise. But doing so at a stock price below $10 is certainly not what he probably envisioned. Indeed, just last March, as the subprime crisis was starting to unfold, Mr. Mozilo crowed that Countrywide would benefit from the spreading mess. “This will be great for Countrywide,” he told an interviewer, “because at the end of the day, all of the irrational competitors will be gone.”</em> </p>

Awe... poor Tan Man. $10 a share is not what he envisioned, but he OD'd on the kool-aid, so it is his bed to lay in. Geez... nearly 3/4ths of a billion, in less than ten years, is not enough for his <em>large </em>family. I dunno, if you love <em>your </em>company so much, then sacrifice <em>your </em>own money. I guess I do not understand, I must not have a big family like he does. Buffett is donating his fortune, and his kids work for their money. Oh... that is right, Buffett's company is still profitable.
 
<p>As to lenders being stoopid, and my comments on the blog a couple of days ago, go over to Calculated Risk and check out Tanta's latest and the comments of the posters there.</p>

<p>Lenders are Stupid. Q. E. D.</p>

<p>My only question is that if being truthful will bring the whole financial system down, and I rather think it would, should we allow lying and cross our fingers and hope for a white swan (or another Black Swan) to cancel out the Black Swan mess we are in?</p>

<p> </p>
 
<p>Reuters by way of comments on Calculated Risk--</p>

<p>Vegas is down.</p>

<p>Down 14%. </p>

<p>Consumers must be totally totally tapped out.</p>

<p>The only thing that would amaze me more is if liquor sales were down. They're not are they?</p>
 
Gaming stocks are getting hammered. Unlike financials, builders, discretionary retail, and chip makers which have also gotten whacked, I think the gaming and casino stocks will become a good buy in the not too distant future.
 
<p><img id="photoMain" alt="Graphic charts the monthly changes in U.S. imports, exports ..." src="http://d.yimg.com/us.yimg.com/p/ap/20080111/capt.f4209e11da5641898ba6cae4547271b5.us_monthly_trade_gfx568.jpg?x=204&y=345&sig=dKZIf.uCaW9FXyzt51gnbQ--" /></p>

<p>WASHINGTON - The U.S. trade deficit in November rose to the highest level in 14 months, reflecting record foreign crude oil prices. The deficit with China declined slightly while the weak dollar boosted exports to another record high. <a href="http://news.yahoo.com/s/ap/20080112/ap_on_bi_go_ec_fi/economy;_ylt=Am1XobV8EU8yEguMJbMXpkayBhIF">linky</a></p>
 
<p>OFHEO - Potential Implications of Changing the Conforming Loan Limit in HIgh-Cost areas</p>

<p><a href="http://www.ofheo.gov/media/research/MMNOTE11108.pdf">http://www.ofheo.gov/media/research/MMNOTE11108.pdf</a></p>

<p>The idea of indexing the limit to the median seems a bit strange. Wouldn't that tend to help inflate prices on the way up (when people can borrow more), and crash them on the way down (when people can't refi)?</p>

<p>I thought the legislators wanted to reduce the bubbling effect ....</p>
 
<p>OMFG... check out this excerpt from the LA Times about option ARMs and Downey Savings. I knew Downey's portfolio was bad but this thing is going make the death star explosion look like a mouse fart.</p>

<p> --<strong>Miller said Downey Financial Corp. was "the canary in the coal mine." The Newport Beach S&L has specialized in making option ARMs since the 1980s and keeps them as investments. Option ARMs make up about three-quarters of Downey's loan portfolio, with most of the rest being similar loans that allow interest-only payments during the first five years but don't allow the loan balance to rise. Miller thought Downey had shown prudence in cutting back on lending in 2006, when home prices stopped rising and competition intensified from option ARM newcomers such as Countrywide and IndyMac Bancorp of Pasadena. But a key indicator of loan troubles -- the ratio of nonperforming assets to total assets -- shot up from 0.55% to 3.65% at Downey over the last year, with the dud loans on Downey's books growing by $80 million in November, Miller said. That number, disclosed last month, was larger than the entire amount of non-performers Downey had a year earlier."--</strong></p>
 
<a title="Permanent Link: Calif. real estate short sellers face state taxes" rel="bookmark" href="http://mortgage.freedomblogging.com/2008/01/14/calif-real-estate-short-sellers-face-state-taxes/">Calif. real estate short sellers face state taxes</a>





<p>http://mortgage.freedomblogging.com/2008/01/14/calif-real-estate-short-sellers-face-state-taxes/</p>
 
<p>Link to lendingmaestro's LA Times article. Probably has registration required. ( I can't tell because I'm registered)</p>

<p><a href="http://www.latimes.com/business/la-fi-optionarm14jan14,0,5555667.story?coll=la-home-business">http://www.latimes.com/business/la-fi-optionarm14jan14,0,5555667.story?coll=la-home-business</a></p>

<p>SCHB</p>
 
Anon,



I agree in regards to setting Conforming Limit to Median Price. Logic dictates that it should be set to median household income.



However, politicians are getting nervous about housing prices dropping, and are looking for artificial supports.
 
<p>Companion link to the LA times article socalhousingbubble linked above (which I can see, with no registration)</p>

<p><a title="Permanent Link to Straight Talk on the Mortgage Mess from an Insider" rel="bookmark" href="http://blogs.marketwatch.com/greenberg/2007/12/straight-talk-on-the-mortgage-mess-from-an-insider/">Straight Talk on the Mortgage Mess from an Insider</a></p>

<p>http://blogs.marketwatch.com/greenberg/2007/12/straight-talk-on-the-mortgage-mess-from-an-insider/</p>
 
<p>This link has been posted several times before. It now has over 600 comments attached to it, including comments which have been posted in the last couple of days.</p>

<p>The thing has legs. Considering all the lurkers, this post may have been read by hundreds of thousands of people by now. Few of them will have been dopes If we feel panic-y, well all I can say is we ought to feel that way.</p>
 
If I had to guess, I would say that FTB will not follow the Fed rule for forgiven loan amounts, and if the taxpayer is solvent, the FTB will hound them and place liens. FTB is viscious.
 
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