| Index Value: | 12,706.04 |
| Trade Time: | 10:27AM ET |
| Change: |  155.43 (1.21%) |
| Prev Close: | 12,861.47 |
| Open: | 12,859.52 |
| Day's Range: | 12690.03 - 12859.68 |
| 52wk Range: | 11,207.80 - 14,121.00 |
Posted on 08/16/2007 7:25:50 AM PDT by TigerLikesRooster
| Index Value: | 12,706.04 |
| Trade Time: | 10:27AM ET |
| Change: | 155.43 (1.21%) |
| Prev Close: | 12,861.47 |
| Open: | 12,859.52 |
| Day's Range: | 12690.03 - 12859.68 |
| 52wk Range: | 11,207.80 - 14,121.00 |
Another buying opportunity!
Let this play itself out. Hopefully, the lesson will be learned about risky loans and bad credit. If the fed were to bail these guys out, this would only encourage them to play these risky games again.
i just want to know one thing...everyone is wanting to talk bail out now...and stocks are going to hell and bonds are still stuck low and no amount of diversification works anymore...intl or domestic or even real estate...but all my gains in 18 months are gone in two weeks and some sobs (congress with third world type of banking laws) allowed these scam artists to offer these types of loans in the first place and now honest folks end up with the losses again...just like dumping common stock holders with bankruptcies and then reissuing stock with same assets in another month or two...something smells as usual!!!!!
oh yea...and since i am not on the inside...screw any gains or profits for me...i am just a little guy!!!!!!!!!!!
Countrywide isn’t a “risky” lender. They are one of the largest lenders and are probably doing a decent job. Their problem is that they are just a mortgage lender and have no backup liquidity like a large bank does.
Crashing the housing market will not be a good thing for anyone. If people think they can just sit back back, pat their selves on back, and let things burn, they are deluding theirselves.
Countrywide is a competitor to me, but I have no desire to see them go down.
A very wise post.
for later
I agree completely with your sentiment. The big losers will be the hedge funds who have been raking in enormous profits the last few years as the gov’t allowed the mortgage companies to loan money to virtually anyone, regardless of credit score. The retail investor will be hurt, but the bubble needed to be popped. If you haven’t bought a home recently in areas like florida, las vegas, or you haven’t taken an ARM, you will be fine in the long run.
People are stupid wishing for a housing crash. Either stupid or selfish.
First off, me, you and thousands of others would lose jobs that, honestly, for those of us who have originated loans a long time, pay better and fit us better than any other job we could get. Not to mention, finding ANY other job will be hard after the economic turmoil that would undoubtedly result. Methinks the “I’m better than you” crowd would also be in economic danger, but they’re too stupid/myopic to realize it.
It is government intervention in credit and money markets that cause these problems. And you want more ?
When idiotic, greedy consumers take out interest only or low initial interest rate loans and are not vetted whether they can pay when terms reset, you blame Congress ? How about blaming the idiots who leaped at these loans ?
When mortgage lenders cause their own credit problems, you think they should have been restrained from such practices by Congress, a bigger collection of idiots who have difficulty managing their own lives let alone the lives of the rest of us ?
Your entire rant is a classic example of someone who thinks the government exists to keep you from being an idiot and hurting yourself. You are delusional if you think that the clowns who make laws and the regulators who write the regulations are some sort of super beings who know better than all of us.
Start taking responsibility for your own life and you won't be so dependent on others. That's for little children.
Me neither! I’ve got a very large amount of money on deposit with them.
So what is their problem, then ? Clearly they made loans with money they didn’t have. Perhaps they should have followed a more conservative business model.
And regardless, they made secured loans and will be able to recoup some of their losses altho certainly not in the short term.
Maybe mortgage lenders should have some reserves, or suffer the consequences. No, they got greedy and overreached and now they’ll pay the price.
I have to agree, this is going to hurt a lot of people, but I can’t feel sorry for the industry for what it did.
With the Chairman’s cut in prime, and why not discounts, too, the big boys can make their funny-money/jargoned-leveraged deals and the sun will shine again!!!
They have a liquidity issue potentially.
No lenders keep the loans they originate.
Since the 1980’s most loans have been bundled into pools with other similar loans and turned into mortgage backed securities. These securities end up as good, low risk investments for many people after passing through Wall Street firms. Fannie Mae, Freddie Mac and Ginnie Mae have made this possible. They set the standards for lending. Major lenders do keep the servicing however so the consumer will continue to deal with the original lender (Countrywide, Bank of America, Wells Fargo).
From the time the loan closes, until it is sold into a pool takes some time. It takes line of credit to keep these loans on the books.
That is where American Home Mortgage crashed (they were also doing a decent job but had a liquidity issue) and where Countrywide potentially has an issue.
The banks that float these lines of credit pulled the lines back due to uncertainty in the markets.
‘When idiotic, greedy consumers take out interest only or low initial interest rate loans’
I have a fixed loan so this doesn’t really affect me but I am always amazed at the number of people who consider interest only loans so horribly risky. The risk is in the term of the arm and all of those 2 to 5 year arms that are coming due. The interest only aspect is a great option IMHO. If you have a 500K loan with 10 years fixed and interest only we’re talking about whether you owe 500K or $430K in ten years. 70K over 10 years is not the issue. Try to find a 10 year period where real estate hasn’t appreciated and it’s not easy. The interest only is not a major new risk factor. The problems are when they are combined with zero down or low down and therefor no equity just as the market turns down. This is a risk however with all loans. In the end the risks are low downs and short term arms and not the interest only feature. Obviously there is additional risk when your situation isn’t improving by paying down your principal but I don’t see it as that big a deal in the larger scheme of things.
Didn't the financial experts at FR insist that there was no "bubble"?
I heard CW is the largest mortgage holder in the country and that they bought up every mortgage they could get their hands on in the last few years. Mine is one of them.
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