http://ml-implode.com Tracking the housing finance breakdown. en http://ml-implode.com/staticnews/2008-05-15_MLAlertSaxonServicingnowWellsFargoPlusBBTnewsHTFCdramaandmore.html http://ml-implode.com 2008-05-15 Read the latest full scoop -- premium members only (cheap, $10/mo subscription required. Cancel at any time). http://ml-implode.com/staticnews/2008-05-15_DynamicMapsofNonprimeMortgageConditions.html http://ml-implode.com 2008-05-15 "The Federal Reserve bank of New York Has Dynamic Maps of Nonprime Mortgage Conditions for the United States. The maps offer a switch between Alt-A and Subprime. Here is one such map showing the percentage of Alt-A loans in California that were low-doc or no-doc." http://ml-implode.com/staticnews/2008-05-15_MoodyssecondlienRMBSwoesmaydentbondinsurerratings.html http://ml-implode.com 2008-05-15 Poor performance of second lien residential mortgage-backed securities (RMBS) could impact the credit ratings of bond insurers, Moody's Investors Service said on Tuesday. Bond insurers have significant exposure to second lien RMBS, mainly through guaranties on the securities and, to a lesser extent, through exposure to collateralized debt obligations backed by such assets, the rating agency noted. http://ml-implode.com/staticnews/2008-05-15_Whymorehomeownersarentgettinghelp.html http://ml-implode.com 2008-05-15 ... all of the efforts to keep people in their homes run through the mortgage servicers, who are responsible for deciding which troubled borrowers will get more affordable mortgages. The problem is that servicers are being overrun by the foreclosure crisis: They were set up to process payments, not do loan workouts on a massive scale. As such, they lack the financial incentive to help homeowners workout new loans. ... In fact, servicers have financial reasons for not helping homeowners who fall behind... Porter, who has testified before Congress on mortgage lending issues, said more than half of 1,700 foreclosures she has studied involved questionable servicer fees. Half is a lot. http://ml-implode.com/staticnews/2008-05-15_ChaseWholesaleEliminates2ndMortgages.html http://ml-implode.com 2008-05-15 "According to reps from the bank Chase Wholesale is eliminating second mortgage products from its product offering. All loans need to be registered/submitted by end of business tomorrow. There has been wide concern and speculation about the value of second mortgage loan portfolios held by the big banks with the precipitous decline of housing prices nationwide. Many of the second mortgages issued over the last two to three years in bubble areas are now essentially unsecured." http://ml-implode.com/staticnews/2008-05-15_DoubtsAboutCreditMarketRecovery.html http://ml-implode.com 2008-05-15 ``Randall Forsyth notes that fixed income markets often price in a recovery after a round of monetary easing, but then resume their trajectory as the economy continues to flag.'' http://ml-implode.com/staticnews/2008-05-15_Mortgageratesdownasinflationfearsease.html http://ml-implode.com 2008-05-15 "Mortgage interest rates dropped as fears of inflation eased. Adjustable rate mortgages were helped the most. The Fed’s aggressive posture and track record for action (i.e. Bear Stearns, liquidity injections, rate cuts), and led by stability of the dollar and tamer-than-expected inflation data all helped the cause." http://ml-implode.com/staticnews/2008-05-15_NAHBHomeBuilderConfidenceSlides.html http://ml-implode.com 2008-05-15 "The NAHB reports that builder confidence was at 19 in May, from 20 in April. Usually housing bottoms look like a "V"; this one will probably look more like an "L". (this refers to activity like starts and sales, but will probably also be apparent in the confidence survey)." http://ml-implode.com/staticnews/2008-05-15_ShutdownImminentforChaseHomeEquitySubprime.html http://ml-implode.com 2008-05-15 Chase has a conference call scheduled at 12pm EST for staff in it's Home Equity and Subprime Wholesale divisions, to be followed by another call to their Prime Wholesale at 1pm. A source writes "After cancelling attendance at all upcoming broker conferences, most think these channels are going to be shut down and integrated into Prime Wholesale." Additional reports will be forthcoming. http://ml-implode.com/staticnews/2008-05-15_CountrywideSubjecttoFTCProbe.html http://ml-implode.com 2008-05-15 "Countrywide, the poster-child for housing bubble lending greed is facing an inquiry by the FTC regarding it’s lending practices. The probe, requested by New York Senator Schumer, asks the FTC to review the lending practices of the mortgage giant." http://ml-implode.com/staticnews/2008-05-15_Scenesofmonkeysrunningaroundduringthegreatesthousingcrashinhuman.html http://ml-implode.com 2008-05-15 The monkeys are "congress critters." http://ml-implode.com/staticnews/2008-05-15_ForeclosuresmovinguptheHousingChain.html http://ml-implode.com 2008-05-15 "The foreclosure signs that have been sprouting up in less-affluent communities since 2006 are beginning to appear in the well-off suburbs, attached to houses that once cost $1 million or more. Although those kinds of homes are in the minority now, real estate agents predict the numbers will swell." http://ml-implode.com/staticnews/2008-05-15_BarclaysProfitFallsAfter33BillionWritedown.html http://ml-implode.com 2008-05-15 "Barclays Plc, the U.K.'s third-biggest bank, reported a drop in first-quarter earnings because of 1.7 billion pounds ($3.3 billion) of writedowns and said further losses from the credit markets are possible." http://ml-implode.com/staticnews/2008-05-15_IstheNooseTighteningAroundCountrywide.html http://ml-implode.com 2008-05-15 "One of the reasons for Bank of America to walk from the Countrywide deal is the rising tide of legal costs and potential for sizeable damages. Admittedly, at this juncture the prevailing view is that the Charlotte bank would renegotiate the acquisition rather than abandon it (particularly since it should be able to limit liability to the merger sub), but it still begs the question of why buy an operation that has the possibility of having zero financial value with considerable headache and embarrassment attached?" http://ml-implode.com/staticnews/2008-05-15_SorryGreenspanButImNotSeeingIt.html http://ml-implode.com 2008-05-15 "According to Marketwatch yesterday, "Greenspan sees U.S. house price hit bottom in 2009". I think he’s seeing things. " http://ml-implode.com/staticnews/2008-05-15_FHAChiefCriticizesRescuePlan.html http://ml-implode.com 2008-05-15 "While most government officials scratch and claw for more authority, Federal Housing Administration Commissioner Brian Montgomery is pouring cold water on a housing rescue plan that would make his agency the linchpin of an expanded federal effort to keep people in their homes." http://ml-implode.com/staticnews/2008-05-15_PaintLipstickonthisPig.html http://ml-implode.com 2008-05-15 "Freddie Mac issued its quarterly “report” and gave clues as to how to paint lipstick on pigs and actually get away with it. The trick is to put $157 billion (from $32 billion before) over to Level 3, where absolutely no haircut is then reported." http://ml-implode.com/#imploded http://ml-implode.com 2008-05-15 In a conference call to its Home Equity and Subprime Wholesale divisions today, Chase announced the discontinuation of all products for those divisions and told employees it was shutting down both channels. "Third party origination of Home Equity and Subprime is totally done - elimination of channel and product, so no product migration to Prime Wholesale," a source told us. It is not yet known how many in total will be affected by layoffs. A call scheduled for the Prime Wholesale division later today may result in "some sort of downsizing there also," our source said. More information to come. Original Ailing/Watch Listing - 2008-02-05: We've seen this pattern played out time-and-time again: squeeze the guidelines; downsize the staff; cut the LTV's. We are hearing the Home Equity division is being absorbed into the broader Wholesale Channel. JP Morgan's Chase Home Equity (CHE) looks like it's still there, but looks can be deceiving. As of the date of this writing, there are 6 Area Managers covering the entire country per their web site (although one has a disconnected phone number). A tipster wrote in that "the HE division has merged under the umbrella of Home Mortgage which now encompasses Prime, HE and Subprime." Another source we spoke with confirmed 63 AE's remain, and the target is to have 1 or 2 left for each State. Yet another states they are now down to 25 AE's nationwide. That translates into yet more layoffs or internal transfers according to our math. J. P. Morgan Chase reported home-equity originations totaled $9.8 billion in the fourth quarter, down about 30% for the same period last year. But the full story is not just about declining originations, but loan performance: "Our consumer home equity and subprime loan portfolios performed worse than we expected," said Jamie Dimon, CEO, in a press release. Chase has been following the trend of other major lenders by cutting back or eliminating Home Equity lending in certain markets. Fortune reported on 2008-02-04 that Chase, like Countrywide, has sent notices to California customers regarding their home equity lines of credit: "Right behind Countrywide was Chase Home Lending, which notified borrowers in Los Angeles, Imperial and Orange Counties that they could tap their credit lines for no more than 70% of the value of their house. Previously, the limit had been 90%." California isn't the only state where CHE has cutback on lending. According to rate sheets available on their web site, one or more counties in 17 other states are now subject to an additional reduction of CLTV's ranging from 5% to 10% below the now reduced national limit. The L.A. Times reported on Chase's retracting from home equity lending on 2008-02-01: "Through this week, Chase customers in California can tap as much as 90% of the equity in their homes. Starting Monday, however, that limit goes down to 85% in most of the state. In six counties, including three in Southern California -- Los Angeles, Orange and Imperial -- Chase won't let homeowners borrow more than 70% of the value of their homes. The bank wouldn't say how the six counties were chosen... Chase is still assessing whether to rescind existing lines of credit, he said." Info is still coming in, so we'll keep you posted! If you can provide us with details or corrections, please email us. Check out the forum discussion by clicking here. http://ml-implode.com/#imploded http://ml-implode.com 2008-05-15 In a conference call to its Home Equity and Subprime Wholesale divisions today, Chase announced the discontinuation of all products for those divisions and told employees it was shutting down both channels. "Third party origination of Home Equity and Subprime is totally done - elimination of channel and product, so no product migration to Prime Wholesale," a source told us. It is not yet known how many in total will be affected by layoffs. A call scheduled for the Prime Wholesale division later today may result in "some sort of downsizing there also," our source said. More information to come. Original Ailing/Watch Listing - 2008-03-31: We thought it was just a matter of right-sizing when we reported on the mid-March layoffs to Premium members. But this email just in makes it clear Chase BC belongs on our Ailing/Watch list: "I know this does not come as a surprise but I submitted a loan last week to Chase BC. So far in 5 business days the file has been assigned to 3 different underwriters, none of the people on my contact sheet are there and the one person I spoke with said matter of franklyŅ. Everyone is jumping ship. It really looks bad for the one trick pony that has become Chase BC." Here's a few of the emails we received about Chase Subprime B2B's layoffs on 2008-03-19: "Buying Bear Sterns for hundreds of millions is the front that they want to get headlines....not what's happening with sub prime. My opinion is.....that this way they can cut it down (sub prime) to a token 50 and you don't have to grab negative headlines for shutting down a channel. This way it quietly slips away unnoticed." "Chase Subprime B2B. (Subprime) announce it will be downsizing over 250 AE's nationwide from 300. Only 50 will be left nationwide. The Westmont, IL Subprime Center is closing and 15 Underwriters from Woodcliff, NJ have been let go today as well. The only center that will be open is Deerfield Beach, FL where only 45 subprime employees will be left." "i just got out of the severance meeting and only 2 managers in subprime B2B remain representing the 50 remaining AE's. One handling the east side of the Mississippi. The other handling the West. All sales managers and RPMs have been let go today. We have only been receiving 5 new loan submissions a day in our center and similar numbers in Deerfield Beach, FL due to eliminating all bank statement loans and stated loan products and reducing the LTV's on all loans in all states." "Not merging with prime....remaining separate. New product not known yet, suspicions are they may get Fha added to supplement the left over sub prime." We have several forum topics on Chase and their various units. Read more about the subprime group here. If you hear any news or can provide additional details drop us a line. http://ml-implode.com/staticnews/2008-05-14_StrengthinUnityPALendersGatewayandArlingtonUnite.html http://ml-implode.com 2008-05-14 As reported in the Philadelphia Inquirer, Gateway has acquired the assets of Arlington Capital Mortgage Corp. of Bensalem, PA, making the two "largest mortgage lenders based in the Philadelphia region ... one." We spoke with Gateway CEO Bruno Pasceri. Read more...