“. if they find they can’t sell their paper and get stuck actually having to hold most of the notes they have written, they’ll cashflow crunch quickly.”
They had enough cash to buy my mortgage last week.
IMHO, all this hype is much to do about a correction that was bound to happen. Rates go up and the people who had ARMS can’t pay. Banks knew it would happen. I think they are just trying to manipulate the market so their companies don’t have to take the hit.
Drift,
No, this is more than just ARMs... this is overly loose lending practices... not just ARMS resetting, trust me that’s MSM drive by laziness, not reality.
As to having the money to initiate your loan last week, AMH or whoever it was was originating loans no problem until less than a week before they declared.
If Countrywide (or any large mortgage lender) can’t sell its paper to boost its cash on hand, they cashflow crunch quickly.