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Coles2
August 7, 2010, 12:54am
2
From InvestorWords.com
Alt-A; A category of mortgages which have a risk potential that is greater than prime but less than subprime. The interest rate offered on these mortgages is usually between the prime and subprime levels. The reason for the increased risk is usually not the borrower’s credit history, but rather something specific about the mortgage.
The characteristics of an Alt-A mortgage wouldn’t be unfamiliar to the average Irish broker or the mainstream lenders here.
Reduced borrower income and asset documentation (for example, “stated income”, “stated assets”, “no income verification”)
Borrower debt-to-income ratios above what would be “normal”
Credit history with too many problems to qualify for an “agency” loan, but not so many as to require a subprime loan
Loan to value ratios (percentage of the property price being borrowed) above at higher than “normal” rates.
Blue Horseshoe
That’s true and Hilarious, practically every mortgage made in most of the last decade in Ireland was in reality Alt-A or sub-prime.
Average Prime mortgage =
My friend has a 100% , 35 year , 525k tracker(.9%) mortgage from AIB he got in may 2008,
Edit: I believe he could also have had interest only for the first 2 years.
This report, while still relevant, is from December 2008.
The second wave of resets are only starting to peek now in 2010 and for the next 2 years.
The theory is that the low interest rates now mean that interest rate resets on ARMs aren’t going to be a problem. I think there are a couple of problems with this.
Refinancing a negative equity mortgage. The FHA has been looking at bending its rules to allow these to be qualifying and so cheap. ( calculatedriskblog.com/2010/ … ative.html ).
While ‘vanilla’ hybrid ARMs offer a fixed period followed by a floating rate are addressed by low interest rates, option and Cash flow ARMs are not. en.wikipedia.org/wiki/Adjustable … M_Variants . In these cases, the resets are from a reduced payment to full amortisation (it is more properly referred to as a recast as the interest rate may not change, but the terms of repayment do).
See the wonderfully coherent CR for more details: calculatedriskblog.com/2010/ … chart.html
Arbitrager:
That’s true and Hilarious, practically every mortgage made in most of the last decade in Ireland was in reality Alt-A or sub-prime.
Average Prime mortgage =
My friend has a 100% , 35 year , 525k tracker(.9%) mortgage from AIB he got in may 2008,
Edit: I believe he could also have had interest only for the first 2 years.
Really was ludicrous when you look back on it, my brother got into a similar situation with the flat that he bought although on a lesser scale. Easy to say it now but the government should have regulated much more effectively.
Ever wonder why the reset graph falls off a cliff near the end 2012,
That’s just pure unadulterated corruption !
Aha! By the time I saw the FDIC’s refutation of that video I’d forgotten where I’d seen it posted. Now that this thread has been bumped, I noticed it again. FWIW, here’s what the FDIC says:
"It is unfortunate but necessary to respond to blatantly false claims in a web video that is being circulated about the loss-sharing agreement between the FDIC and OneWest Bank. Here are the facts: OneWest has not been paid one penny by the FDIC in loss-share claims. The loss-share agreement is limited to 7% of the total assets that OneWest services, and OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets. In order to be paid through loss share, OneWest must have adhered to the Home Affordable Modification Program (HAMP).
The producers of this video perpetuate other falsehoods. The FDIC has not requested to borrow money from the Treasury Department. Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as claimed in the video.
This video has no credibility. Regardless of the personal or professional motivations behind its production, there is always a responsibility to be factually correct and transparent. The FDIC made available a fact sheet on the day that the sale of IndyMac was announced that details the terms of the contract. It’s too bad that the creators of this video opted to premise it on falsehoods."
fdic.gov/news/news/press/201 … share.html
2Pack
September 6, 2010, 9:13pm
14
It is a bank holiday weekend in the US ( Labour Day today). The New York Times has relentless probed the double leg of the dip in a series of articles over the past few days. Here is another version of the chart Arbitrager started the thread with. Look at the right hand scale
https://mortgage.freedomblogging.com/files/2009/05/reset-chart-for-blog-april.jpg
Same data rebased to when subprime resets were still a problem
https://mortgage.freedomblogging.com/files/2009/05/reset-chart-image-for-blog.jpg
.About 2 million houses will be seized by lenders through 2011.
U.S. Home Seizures Reach Record for Third Time in Five Months bloomberg.com/news/2010-09-16/ba … onths.html
Ally’s GMAC Mortgage Halts Home Foreclosures in 23 States → bloomberg.com/news/2010-09-2 … -n-y-.html
Ally Financial Inc.’s GMAC Mortgage unit told brokers and agents to halt foreclosures on homeowners in 23 states including Florida, Connecticut and New York.
GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 and obtained by Bloomberg News. Ally Financial spokesman James Olecki confirmed the contents of the memo. Brokers were told to stop evictions, cash-for-key transactions and lockouts, regardless of occupant type, with immediate effect, according to the document, addressed to GMAC preferred agents.
there is more
Interestingly this could be about a legal problem → stopforeclosurefraud.com/
GMAC stops some evictions, foreclosed home sales → google.com/hostednews/ap/art … wD9IBT5VO1
GMAC, which is owned by Detroit-based Ally Financial Inc., did not identify the specific internal issue that prompted the moratorium in its statement, but it has been linked to lawsuits this year surrounding the alleged falsification of a key foreclosure document.
The Florida attorney general is investigating three law firms for allegedly providing fraudulent affidavits that identify who holds the original mortgage note in foreclosure cases. In Florida and in other states, this document allows lenders to bypass a costly trial and proceed with a foreclosure.
Two of the three firms being investigated — the Law Office of Marshall C. Watson and the Law Offices of David J. Stern PA — have represented GMAC in foreclosure proceedings. And the person who signed many of these allegedly false affidavits was an employee of GMAC.
GMAC did not address how many homeowners would be affected by its suspension of evictions and foreclosure sales. It expects the issues to be resolved within a few weeks or, at latest, by year-end. The company didn’t respond to questions beyond its statement.
there is more
When quoting the Case Shiller index on a regular basis without takingzerohedge.com/article/those-who- … -are-missi
https://boombustblog.com/media/wpmu/uploads/blogs.dir/1/files/2010/10/image015.png
moneywatch.bnet.com/investing/bl … arket/511/
The Foreclosure Mills: How This Could Really Hurt the Housing Market
The law finally caught up with the home foreclosure mills. Some of the leading lenders and mortgage servicers — including Bank of America, JPMorgan Chase, and GMAC Home Mortgage, a unit of Ally Financial — have conceded that they’ve mistakenly filed for foreclosure based on faulty or even forged affidavits. At some mortgage service firms, an employee might robo-sign as many as 6,000 legal documents a week, making it impossible to verify the facts.
All of these borrowers are in default and most will almost certainly lose their homes. Some, however, might have been able to recover if the lender had offered to modify their loan. Their gripe, a fair one, is that lenders have been fatally unresponsive and in too big a hurry to evict. My MoneyWatch colleague, Ilyce Glink, says they’re in “loan mod hell.”
Various types of moratoriums are now in place in the 23 states that put foreclosures through the courts. Foreclosures in the other states are less affected, because borrowers can’t bring a challenge to a judge. Even so, title insurers are taking more time to examine documents, which can drag the process out.
What does this mean to people buying and selling homes? Plenty.
…(cont’d)
nytimes.com/2010/10/04/busin … tgage.html
Flawed Paperwork Aggravates a Foreclosure Crisis GRETCHEN MORGENSON
As some of the nation’s largest lenders have conceded that their foreclosure procedures might have been improperly handled, lawsuits have revealed myriad missteps in crucial documents.
The flawed practices that GMAC Mortgage, JPMorgan Chase and Bank of America have recently begun investigating are so prevalent, lawyers and legal experts say, that additional lenders and loan servicers are likely to halt foreclosure proceedings and may have to reconsider past evictions.
Problems emerging in courts across the nation are varied but all involve documents that must be submitted before foreclosures can proceed legally. Homeowners, lawyers and analysts have been citing such problems for the last few years, but it appears to have reached such intensity recently that banks are beginning to re-examine whether all of the foreclosure papers were prepared properly.
In some cases, documents have been signed by employees who say they have not verified crucial information like amounts owed by borrowers. Other problems involve questionable legal notarization of documents, in which, for example, the notarizations predate the actual preparation of documents — suggesting that signatures were never actually reviewed by a notary.
…(cont’d)
70% of Option Arms might default?!
