cromag

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    • Sun Oct 5th 23:39 PM
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      Rating: 0 0
      Commented on:
      Fannie and Freddie Did Not Cause This Crisis
      Some of the info you state is plain ignorant and shows a lack of understanding in loan origination.

      You say "they [Mortgage Brokers] have every incentive to push the guidelines as hard as they can and to find a way around them whenever possible.

      If mortgage brokers had done their job and only made loans to people who could pay them back..."

      Fannie and Freddie created an automated underwriting system where a computer algorithm checks the data and issues an approval. The algorithm would approve loans in excess of 65% total debt ratio and sometimes not require income verification. This had nothing to do with the Broker/Originator and everything to do with Fannie and Freddie.

      The GSE's approved these parameters and the rest of the lenders followed suit, even within their own porfolio products. The Algorithms did the underwriting, the brokers did the originating, not the other way around.
      View article »
    • Tue Sep 9th 20:37 PM
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      Commented on:
      The Great Dollar Pump of 2008: A Doomed Central Bank Intervention
      Great Article! Thanks for the eye-opener!

      I wonder how the Gold Carry Trade and spiking Gold Lease Rates play into this.

      www.gata.org/node/4608
      www.kitco.com/lease.ch...
      View article »
    • Mon Jul 7th 03:36 AM
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      Commented on:
      ETF Update: There's Gold in Them Thar Hills!
      How do the gold carry trade manipulations fit into this?
      View article »
    • Tue Jun 3rd 01:51 AM
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      Commented on:
      The Rising Risk of Emerging Markets
      Cicero: I think Stockcharts.com might meet that criteria.
      stockcharts.com/charts...
      View article »
    • Thu May 22nd 02:14 AM
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      Commented on:
      The New Wave of Infrastructure Investing - JP Morgan
      Actually FXZ may not be much of a global play. I have been tracking iShares S&P Global Infrastructure Index (IGF) for a few months and it's done OK but what's with the Macquarie Global Infrastructure Total Return Fund (MGU)? It's trading at a discount of -6.60% with a 5.71% dividend, paid quarterly.

      www.etfconnect.com/sel...
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    • Thu May 22nd 01:51 AM
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      Commented on:
      The New Wave of Infrastructure Investing - JP Morgan
      I like First Trust Materials AlphaDEX Fund (FXZ)

      It's up 11.49% in the last 3-months and 7.62% YTD

      Also, it's trading at a 0.41% discount as of 5/20/2008 !

      Here are their top 10 holdings
      Cleveland-Cliffs Inc. CLF 3.78 %
      Fluor Corporation FLR 3.26 %
      Westlake Chemical Corporation WLK 3.16 %
      AK Steel Holding Corporation AKS 3.08 %
      The Mosaic Company MOS 2.86 %
      Crown Holdings, Inc. CCK 2.74 %
      Nucor Corporation NUE 2.73 %
      Steel Dynamics, Inc. STLD 2.71 %
      Reliance Steel & Aluminum Co. RS 2.69 %
      McDermott International, Inc. MDR 2.64 %

      Here's a link to their website
      www.ftportfolios.com/R...
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    • Sat May 3rd 03:30 AM
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      Commented on:
      Fed Delivers a Steep Yield Curve: A Bull’s Best Friend
      I looked into this a few months back and saw that not every steep yield curve preceded a bull market rally right away. Sometimes it took a long time and more drop in stocks.
      View article »
    • Sat May 3rd 03:21 AM
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      Rating: 0 0
      Commented on:
      Fast and Easy Fannie
      CWBC Fast & Easy guidelines were abused by the loan officers. They would just put whatever income they needed to qualify the borrower. Borrowers didn't understand and/or were ignorant to the full scope and ramifications of the fraud. Borrowers signed the applications written by the loan officers without even reading them.

      Fast & Easy were real A-paper loans and very high jumbo loan amounts in California.

      The worst part is that this fraud is still going on in the industry. I don't think that the people who work for lenders care because there are no consequences for their actions so they recommend them to their wholesale clients and the wholesale clients are just dumb enough to do what they are told is OK. The borrowers just go with the flow. The sad thing is the good Brokers lose a lot of business because they don't play along. It's terrible. But it happens at the in-house bank level too. More even! I personally caught one and had the regional VP of this huge bank pay for it by redoing the loan properly at a huge cost to the bank and very low rate to me.

      I'll take this one further in the Prime Alt-A direction, where guidelines allowed a No Ratio loan. Borrowers with 80% equity (LTV), good credit scores like 700+ FICO or even 680 and with 2-months PITI reserve assets like 401k or IRA, were allowed to leave the income line BLANK. They just needed to verify that they had a job. If you gave the lender tax returns you were suppose to black out the income. Rates for these No Ratio Alt-A loans were not much higher than the Fast & Easy rates. 0.25% to 0.50% higher in rate. That's a quarter to half a percent higher rate! for NO Income.

      The only thing protecting us 'investors' is the tighter liquidity and declining home values. Most people just don't qualify anymore.

      SIDE NOTE: We had a plumber come by the house yesterday to quote a re-pipe and when he found out I was a mortgage broker he asked if there was anything he could do because he took all his equity out of his inflated Silicon Valley CA home and bought FOUR rental properties in Florida. All the properties have lost a lot of value since then and he is in negative cashflow in all but one. This is not an isolated thing. I think there is a lot more pain coming.
      View article »
    • Thu May 1st 02:16 AM
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      Rating: 0 0
      Commented on:
      Are Homebuilders a Buy?
      Maybe the builders that can afford to continue building are doing it because of commodity price increases and lower labor costs.

      Construction work is slow and contractors are bidding lower to get jobs and are taking smaller side jobs.

      The price of raw materials is going up and if inflation hits hard, the builders may end up holding on to properties short term but may clean up big if long.
      View article »
    • Sun Apr 27th 03:20 AM
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      Commented on:
      The "No Amount of Bad News Can Bring This Market Down" Trades
      LOL great post

      GrantMe: "1.who are you voting for in Nov? 2. Why?

      Does it matter? The boy with the money just buy the sheeple votes or rig the numbers anyway. I don't think we the people have much say because the she lower IQ sheeple are easily controlled. Love the "running others over in the Wal-Mart parking lot" quote LOL
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    • Fri Apr 25th 21:23 PM
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      Rating: 0 0
      Commented on:
      Money Flows Into the Market: What They're Telling Us
      A lot of egos in this thread.

      Anyway, the $150B stimulus package just might inflate another GDP bubble of illusionary consumption spending. We the people elect a President who hands our money back to us in a stimulus package to re-inflate and make us think we are still 'collectively' rich. The nouveau riche a have exhausted their equity lines and it's time for the pain.

      This is far from over.
      View article »
    • Fri Apr 25th 18:18 PM
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      Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      Curious Cat: LOL Thanks for those inspiring comments and levity
      View article »
    • Wed Apr 23rd 23:34 PM
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      Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      Forgot to mention. I can see the HELOCs and the Alt-A paper causing a lot of problems down the road especially if an inflation fearing Fed ratchets up the Prime Rate, as it can go up quickly as can LIBOR.
      View article »
    • Wed Apr 23rd 23:31 PM
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      Rating: 0 0
      Commented on:
      The Impending Mortgage Crisis
      Regarding figure 1.7 Monthly Mortgage Rate Resets

      If my suspicion is correct, it would make a large part of this article worthless though I agreed with most everything Mr Goode is saying.

      It would be interesting to know if those statistics are based off of current loans still in existence or original mortgage originations. The huge difference would be that in the case of the latter, many of these people would have already, or will sell or refinance before they reset. Sure many cannot if they are upside down of course.

      "The greater problem, however, is recasts. Option ARMs allow for the choice of the size of the payment. Homedebtors can choose to pay an amortizing payment (such that their mortgage balance is reduced), an interest-only payment, or a negative-amortizing payment, where their mortgage balance increases. Recent data from Countrywide (CFC) indicates that 71% of borrowers with option ARMs are only making the minimum, negative-amortizing payment. Option ARMs have provisions such that when the mortgage balance exceeds the original mortgage by 10% to 15%, the loan converts into a fully self-amortizing loan."

      Some lenders are especially lenient when it comes to getting paid on their option ARMs while earning the high back-end effective rates. Also the loans do not all recast to fully amortized payments when they reach their 110%-125% threshold. Some loans allow for the payment of the interest portion on the capped threshold loan amount. (It doesn't go over this amount BTW) Sure the interest only payment is higher than the negAm payment and it could be a lot higher if the effective fully indexed rate increases, as it changes monthly. So in the end it is a problem but not as bad as fully amortized payments, though it probably would still lead to default.

      DISCLOSURE: California Mortgage Broker, short with QID, SKF and SRS, long with GLD, TIP, PWZ and foreign currency.
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    • Sun Apr 20th 15:53 PM
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      Rating: 0 0
      Commented on:
      Mortgage Resets: Subprime May Be Ending, Option ARMs Have Just Begun
      Kudlow is an ego maniacal control freak who thinks he has a duty to direct the 'free' market and defend his ignorant bullish statements.
      View article »