California Mortgage News

Countrywide California Foreclosures

2008-04-04T09:44:00.000-07:00

Looking to find out how many foreclosure Countrywide has in CA

http://www.streamfx.com/CW/4-3-2008/REO-California.html

The Countrywide California REO foreclosure list list some great properties for sale (all marked down, with prices dropping every day). I know that this blog predicted that Countywide would survive the real estate crash but clearly I was WAY wrong. Countrywide's exposure in the highly frothy markets (California & Florida) meant they were left holding the chair when the music stopped.

Countrywide Continues the Slow Bleed.

2007-10-16T15:36:00.000-07:00

Countrywide takes a writeoff of $125-$150 Million in their re-structuring where they are laying off 20% of their workforce. Meanwhile Southern California home sales have dropped to their lowest since Dataquick began tracking home sale records in 1998.

A total of 12,455 new and resale houses and condos were sold in September in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties, according to DataQuick Information Systems.

It was the slowest month since the firm began keeping records in 1988, DataQuick said.

Finally rigorous process management comes to small residential construction

2007-09-22T12:48:00.000-07:00

The larger home builders have always had large scale project and modern business processes for building homes. They are able to leverage large economies of scale to more efficiently produce homes. This enables them to produce a home at a lower cost than a typical general contractor isn't able to do as efficiently. A friend of mine built his own home and had to deal with the vageries of the New Mexico and his project management tool was his spreadsheet. Smaller builders cannot afford or often lack the knowledge to implement such systems. A Construction Management System can be difficult to implement. 6x6 Builder has developed a web based system for managing, estimating for the builders. Their online building cost estimator for general contractors that integrates construction cost estimating and control tools in a complete construction project management system. This means a couple of things. The contractor doesn't need to manage an expensive piece of software. Being web based, all the problems that a typical software installation would entail are eliminated. The monthly price is reasonable at $69. It provides a rather extensive feature list but it provides an organizational structure that most general contractors lack. Most general contractors are not known for their organized management skills. The web based system is feature rich since it allows you manage you business, sub contractors, estimates and more.

One particular feature I found interesting was the ability to use and generate master templates for project and then customize these templates for later use. This allows a contractor to work from an existing template, customize it and then save it as a general template. This provides a pretty serious advantage since it's a great starting point. Estimating is always a somewhat black art but with 6x6 Builder's web based solution it's a lot more accurate. The system can query the latest prices on materials, fire off request for quotes and more. There is an entire subsystem devoted to sub contractor management along with pre-written contracts. Working with the system during my 7 day trial, I can easily see how this system properly used can save a contractor a huge amount of headache and time. In fact I will certainly use it as an owner/builder for my next home.

It's the fundamentals Stupid

2007-09-18T20:03:00.001-07:00

While Wall Street is rejoicing about the 50 basis points rate cut, I watched the talking the pundits discussing whether or not this would "save the housing" sector. It's unlikely to do that since the fundamentals of the housing market haven't changed. Properties are well out the reach of the average home buyer. In many California markets (San Diego, Bakersfield, Tattoine) properties were bid by people speculating in the market. Now that the easy credit is gone, there isn't anything supporting these prices. Prices will continue to moderate or stagnant for the next three years in California and the cutting of the discount rate isn't likely to change that little fact. In the end people need to be able to afford their monthly mortgage payment and you cannot do it with many California communities.

I hate to be a contrarian.

2007-09-12T20:32:00.000-07:00

But given the state of the real estate market and mortgage market nationally, now is a good time to become a mortgage broker. Downtimes are the best time to enter any market. (It's the buy low part of the buy low/sell high). Many mortgage brokers have been forced from the market and quite frankly the marginal players have been eliminated. The California Mortgage Exam is one of the tougher exams national. Compucram offers a downloadable free trial of their California Mortgage Lending CompuCram® Exam Prep Software. This software prepares you for the California mortgage broker exam. It's downloadable and more importantly offers a guarantee to help you pass your mortgage exam.

Countrywide to lay off 25% of workforce.

2007-09-08T16:24:00.000-07:00

Here's a game I like to play. When the CEO says that

[Mozilo] assured his audience that Countrywide's "proprietary technology" would help it meet its goal "to avoid any foreclosure." Countrywide invariably kept to "prudent underwriting guidelines," he said, to ensure that its adjustable-rate borrowers could handle the highest interest rates that might kick in during the life of their mortgage.

(Hat Tip LA Times)

It's time to short the stock. Their technology wasn't good enough to stave off the collapse off the credit market So they laid off 25% of their workforce. Oh yea they expect loan originations to be off by 25% this year. I am sure they are giving great RIF packages to those employees. Those that might remember I said the subprime market specifically in California would do EXACTLY THIS!

Credit Tips

2007-07-03T19:14:00.000-07:00

The sudden collapse of the sub-prime market has made managing your credit even more important than before. The credit market is going to tighten up considerably in the future and managing your credit and improving your credit is going to be key to getting the best rate on a mortgage. Credit Tips offers a blog and series of videos dedicated to helping people who might have marginal credit, improve their credit. Improving your credit isn't a magic formula but rather it's due to the fact that people often have inaccurate information on their credit report. Many late payments aren't actually late because creditors don't face a penalty for reporting inaccurate information. Frank Bruno's blog covers his complete line of videos on managing your credit. He has launched a new video on disputing items on your credit report for verified items which launched June 29, 2007. His blog on credit tips which covers his videos and offers regular credit report tips.

Frank offers a pretty wide selection of videos and he is far more knowledgable about the specifics of the credit industry. This sort of insider knowledge is very very helpful since his techniques and tips are specifically geared to take advantage of both the current law on fair credit reporting act and the practices of the credit industry. Bruno's knowledge of the credit industry is a clear advantage in his videos and his blog. Having this information can help dispute items on your credit report, improve your credit score by 123 to 200 points and more importantly get you the accurate credit you deserve. I would encourage you to try his video and read his blog to get one leg up for your next mortgage application. His videos take a specific topic in dealing with your credit report and go in depth on the matter. This means he goes into far more detail than a blog devoted to generic advice on improving your credit.

Buying outside California

2007-07-02T21:01:00.000-07:00

Charlotte real estate has been one of the better real estate investment opportunities in the last five years. The real question is after the housing slow down ends, where will be a good place to buy? The more important thing to remember is that real estate is a highly regional market. While things have decidedly cooled in Southern California, there are quite a few places where houses and homes continue to appreciate. Now is a good time to buy as you can see when you compare mortgage rates. They are still at an historical low. This means that owning a house is still within reach of many Americans. It just means that you need to do your research and invest in the right areas of the country - preferably ones that didn't get run up by real estate speculators.

Casey - He's like crack

2007-06-12T17:01:00.000-07:00

I realize that the saga of Casey Serin is getting pretty old but I cannot help myself. Casey is like crack. In the lastest saga of Casey's meltdown - someone gave him $1000 so he decided to fly to Australia - leaving his wife behind. I promised myself I would get back to covering the less juicy sub-prime explosion in California real estate but watching someone as nuts Casey publically is too func

Casey Can't Quite Quit

2007-06-01T14:20:00.000-07:00

He keeps changing the single page that is his web site. Currently it has in nearly completely greyed out letters the single sentence, "I'm sorry." This marks the 5th time he has changed the blog since closing it. I guess he thrives on the attention. One of his previous version had a complete list of his various media appearances. Viewing source on Casey's blog reveals his last two versions which he has simply commented out.
Here's a previous version

I am Facing Foreclosure Story is Over.

It will never be back as we knew it.

Advertisers: Feel free to cancel your PayPal subscription. I will be issuing pro-rated refunds this week.

Everybody: I'm very sorry to end like this. I wish I could say a lot more, but it all came down to choosing between my wife and this blog. As much as I resented having to make this choice, I love my wife and am trying to do the right thing. May God help me move on and help us rebuild our lives.

Thanks: to all the "haterz" (original, biggest, funniest) and to all the "supporterz" (original, longest, mixed) and everyone else who linked to me. You guys made the last 9 crazy months of blogging possible. (Sep 5th, 2006 - May 30th, 2007). Remember to keep it Sweet!

Press:

May 14, 2007: Casey Serin: The world's most hated blogger? - CNET

April 13, 2007: Real Estate Leaves One Investor High and Dry - ABC Nightline

April 12, 2007: Spekulanten werden nun bestraft - Stern, a German news magazine

April 7, 2007: Facing Foreclosure - Suzie Orman Show

March 22, 2007: America's housing market - The Economist

March 7, 2007:
Central Valley Man Poster Child Of Mortgage Crisis - CBS 5 News

October 31, 2006:
On Rich Dad TV with Robert Kiyosaki

October 22, 2006:
10 mistakes that made flipping a flop - USA Today

October 6, 2006: A would-be real estate mogul follows boom tips straight to bust - San Francisco Chronicle

September 25, 2006:
24 Years Old, $2 Million in the Hole - The Motley Fool

Others include: NPR Radio, The Sacramento Bee, Local TV stations, and more...

More: My photos, videos (here, here and here) and podcasts are still up (for now).

You may contact me or join my mailing list here.

--

Casey Serin

"It's All Good!"

Last updated June 1st, 2007

Jesus Serin your wife is gonna kill you. Instead of actually quiting he keeps making small little changes to the blog. His need for attention is pathelogical!

Who would hire Casey Serin?

2007-06-01T10:26:00.000-07:00

In yesterday's post I mentioned that Casey Serin'g blog is closed. The scuttlebutt is that Galina (his wife) finally pulled the contract he signed out and said "Get a fracking job." It then occurred to me who is going to give Casey Serin a job? I mean Googling an employee is a pretty standard practice these days. Wouldn't anyone who googled Casey Serin would find his Wikipedia entry, the News.com article claiming him to be the world's most hated blogger and the multiple cases of mortgage fraud that he committed? Wouldn't this make Casey Serin largely unemployable? I mean who is going to trust an employee who defrauded companies of hundreds of thousands of dollars? I wouldn't trust him with a burnt out match and I doubt the human resources of any major company is going to allow him to get a job there. That's leaves a small business stupid enough to hire someone as unethical as Casey. Last time I checked Enron wasn't hiring.
Update: The out of touchness continues
Anyone that has read Casey's blog realizes he is completely out of touch (leading explanation - bi-polar disorder) but he UPDATED his CLOSED BLOG.

Everybody: I'm very sorry to end like this. I wish I could say a lot more, but it all came down to choosing between my wife and this blog. In order to keep the marriage I had to kill my 9-month-old baby who was just beginning to walk and talk (meaning the blog starting to produce full-time income). As much as I resented having to make this choice, I love my wife and trying to do the right thing. May God help me move on and help us rebuild our lives in the right way

A blog that generated the tinest amount of income and he compares it to a baby. You Casey Serin are one sick fucking moron.

Casey Serin's Blog Closed

2007-05-31T14:47:00.000-07:00

Mortgage fraudster Casey Serin has shuttered his blog I am facing foreclosure.

IamFacingForeclosure.com is over. It will never return.

Advertisers: Feel free to cancel your PayPal subscription. I will be issuing pro-rated refunds this week.

Everybody: I'm very sorry to end like this.

Thanks to all the supporterz, haterz and everyone who wrote about me. You guys made the last 9 crazy months of blogging possible.

You may contact me or join my mailing list here.

No doubt Casey's wife finally used that contract when Casey was unable to pull down $1,000/week steady income. I also suspect that someone close to Casey (it certainly wasn't Casey - he was clueless the entire time) realized that the numerous statements of mortgage fraud on the blog were just a lawsuit waiting to happen. Serin was the poster child for liars loans who bought 8 houses in several different states using no doc liars loans. IS the closing of the web site just prelude to avoid Cashcall? Or is it minimizing any potential legal liability? Who knows? More importantly who cares?

Wachovia Buys AG Edwards

2007-05-31T14:22:00.000-07:00

In continue consolidation of the mortgage marketplace, Wachovia has bought AG Edwards for 6.8 Billion dollars. See Yahoo article here or CNN's coverage here. It's apparent that Wachovia is making it's play to become one of the big four essentially. It's been picking up regional banks left and right. The shock of the subprime market has left a lot of companies that previously wouldn't have considered a merger, gussing up the place and getting ready to be bought.

Subprime Feature Story

2007-05-30T15:15:00.000-07:00

It seems as though the sub prime market in California seems to inspire feature story after feature story about someone who goes from rags to riches and then rags again. Bloomberg has a feature about someone who went from a manager at a warehouse for Target, became a salesperson for Costa Mesa based Secured Funding Corp. I am not sure how many more stories like these I can take. Quite simply the mortgage brokers in California were able to quickly package loans and sell them off to firms on Wall street or large banks

Under U.S. law, investors who buy mortgages or securities backed by them are typically not susceptible to lawsuits alleging fraud on the part of brokers.

I would encourage you to skip the obvious lead-in of the story and read some of the meat of the matter. The body of the article tells yet another sordid tale of the high pressure sub prime sales techniques. It seems nearly inevitable that some sort of new regulations regarding sales tactics, disclosures and appraisals will happen. With the new Democratic Congress these are sure to be more stringent than the previous Republican Congress.

Credit Management - Student Loan Consolidation

2007-05-25T15:03:00.000-07:00

One of the most important elements in managing your credit is managing long term debt such as student loans or a second mortgage on your home. In my own case I have to be upfront, I did a very poor job of managing my student loans post graduation. One of the problems was the multiplicity of loans that took in my last two years of college. This meant that I often missed payments and in case of one loan, managed to completely drop the ball on it completely. I would have certainly benefited from student loan consolidation. This would have given me a single payment and single place to right a check. Consolidation would have also lowered my over all interest rate for the loans I had. The interesting thing of course was that this was well before the internet and before federal student loan consolidation was a common practice. Getting student loans consolidated back then was a time consuming process requiring multiple physical forms. Simply put it was really hard to do. This was too bad since this meant that I damaged my credit and made it harder to purchase my first home in California. By
consolidating my student loan debt I could have saved on the interest rate and my downpayment. As it was I bought my first California home with a 20% down payment.

Had I managed my student loan debt better I would have been able to purchase even earlier and would have enjoyed an even greater appreciation in my home's value. So to manage your credit, you should do the following.

Consolidate your student loan debt into a single payment
This will make it easy to track and manage your student loans. Having multiple loans with multiple vendors is the surest way to miss a payment.
Set up an auto pay
By autopaying the minimums+$1 on your student loan, you don't have to worry about the mail time or other inconvienences. By making the minimums+$1 you will show a payment history of paying more than the minimum and this will help with your credit. Additionally it will mean that you don't have to worry about the fiddle faddle associated with the mail.

This is a sponsored post.

Subprime Firm In OC beginning to collapse

2007-05-23T13:41:00.000-07:00

The Orange Country Registrar has a great story about Quick Loan Funding -- largely famous as being an active player in the California sub-prime market and more importantly the founder Daniel Sadek is famous for having actor Eddie Griffith crash his Ferrari Enzo during a publicity stunt for his failed movie - Redline.

Those willing to wade through the article are more than welcome to read it HERE.
The article highlights one thing - much of the problem in the California sub prime market lies with the incredibly easy way it is to become a mortgage lender in California

Daniel Sadek played Orange County's subprime lending boom like a card shark dealt the ace and jack of spades.

Just five years ago he was selling cars.

Then, in January 2002, he anted up $250 for a state lender license and started selling home loans through his company, Quick Loan Funding.

That right $250 and a $25,000 surety bond and you can be a mortgage lender in California. It's more difficult to become a barber than it is to become a mortgage lender. Today Daniel Sadek has sold his fleet of exotic cars to keep his firm afloat. The staff has shrank from 700 to 125 and his loan volume has dropped to about 60 deals a month. In other words he's done. The firm had to buy back $29 million in mortgages last month (they are writing about $30 mil a month) with numbers like that his firm cannot last. Daniel's desperation was such that he has mortgaged every piece of property to the hilt to keep the firm going. Given the aggressive tactics used by Quick Loan Funding and the number of lawsuits they have currently (the number they will have as a result of the article. Articles like that always increase the number people that come out) - I just don't see this firm making it.

Managing Loans and Secured Loans

2007-05-18T16:06:00.000-07:00

One of the principal reasons reasons people get Secured Loans is either debt consolidation or for temporary one time expenses. Most of the time these loans are small and not worth getting a larger homeowner loan. The essential problem that many people don't face when getting a loan is whether or not the loan is going to add to their overall debt load. Many people get a homeowner loan for debt consolidation but continue the overall spending that caused them to get into debt in the first place (for example paying off credit cards and then running them up again). If you are getting a loan for a one time expense such as home improvement, start with the kitchen. Kitchen home improvements yield the greatest return of any single home improvement. Typically you will see a great return on kitchen improvements

Plumbing and electrical - 260% Average Return on Investment: Consider repairing or replacing any defective plumbing or electrical items in your home. Make sure you have the right person for the job by getting several estimates.
Update kitchen and bath - 168% Average Return on Investment: Update kitchen and baths by resurfacing cabinets or painting with neutral color. Replace toilet seats, dated fixtures and drawer/cabinet handles. Freshly caulk and redo grout in countertops, sinks, tubs and showers.
Paint interior - 148% Average Return on Investment: Repair any damaged interior walls by patching all chips, holes and cracks; then touch up or repaint interior walls with neutral color.
Paint exterior - 76% Average Return on Investment: Repaint or resurface the outside walls of house, as needed. Patch and repair any damaged areas.

This is a sponsored post.

Countrywide Takes advantage of the Subprime Market Consolidation

2007-05-17T09:15:00.000-07:00

According to this Washington Post article, Countrywide will be adding 2,000 new positions. In addition they will be adding 50 year mortgages and reverse mortgages to their product mix. The consolidation in the industry continues as many of the sub prime lenders in the marketplace continue to let people go. They expect consolidation so much so that they have launched Country Wide Careers. The recent layoffs in the marketplace mean that Countrywide can cherry pick some of the best professionals in the industry. On that note Accredited Home Lenders Holding Coa San Diego subprime lender, on Friday said it cut 1,300 jobs, or 31 percent of its staff, in the first quarter.

Loose lending standard are a global phenomenon

2007-05-14T11:54:00.000-07:00

One of the most interesting things about the current credit markets is how global they truly are. Credit is truly global these days and it's interesting to find that easy credit might have been previously only regional in effect are global. For example in the United Kingdom and Scotland mortgages have been just as easy to get as in the United States. As a result, many people bought more home than they could afford and as a result of rising interest rates are now looking remortgage an existing ARM. Just as here in California secured loans against the homeowners residence are often quite popular as one way to consolidate debt.

In the United Kingdom, credit lending standards are already started to tighten up. Recent moves by the Bank of England have signaled markets to tighten up their lending standards. This is perfectly natural in today's environment. What's interesting of course is how the Feds action here in the States seemed to signal to global credit markets that it was time to tighten lending standards.

This is a sponsored post.

PNC Financial Services Group (NYSE: PNC - News) announced the acquisition of ARCS Commercial Mortgage

2007-05-14T11:42:00.000-07:00

The company has 10 U.S. origination offices and has focused on the agency loan market for the past decade. ARCS originated more than $2.1 billion of loans in 2006 and services a portfolio of approximately $13 billion. Terms of the deal were not disclosed.

PNC said that ARCS will provide the bank with a complementary customer base and expertise, particularly in financing plans for multifamily dwellings. "Multifamily housing is one of the largest lending sectors in commercial real estate, and agencies are leading providers of permanent financing products for market rate and affordable multifamily projects," said William S. Demchak, PNC vice chairman and head of Corporate & Institutional Banking in a statement.

New Century Financial sells loan portfolio for less than 30 cents on the dollar

2007-05-08T06:56:00.000-07:00

New Century Financial sold a 170 million dollar loan portfolio for less than 30 cents on the dollar to Ellington Management Group. Ellington Management is a hedge fund and this will be part of a growing trend of hedge funds, buyout firms and other Wall street firms trying to buy up sub prime assets as the market continues to collapse. New Century Financial will be selling its loan servicing units later this month. Carrington Capital Management, another fund manager, in early April agreed to buy the unit for $133 million unless a rival tops its bid.

Rockstart UP!

2007-05-07T10:23:00.000-07:00

Payperpost.com has been running a video blog to chronicle their reality show and startup. The idea is pretty simple. Start a company and then chronicle the changes and challenges that start up faces. In many ways it's pretty compelling. You get to see the inside of a internet funded start up and can be pretty interesting. The current episode is episode number #20 and it's a complete list of outtakes from previous 9 months. It's not two bad as far as outtake reels go (Why didn't the group cake plough make it into the regular series?). Finding your voice in a video blog is just as hard as finding your voice in a regular blog. The current problem with the this episode, is that it's apparent very often people are mugging for the camera to make something interesting. It's far more apparent in an outtake reel where Ted blows multiple set-ups or his "I gotta yell stuff". That stuff is transparently done for the audience and has almost no real appeal to me. In fact the problem with this episode is that it's an outtake reel which means it's a random series of vingettes without a lot of context. Previous episodes have focused on one aspect or another of a startup (explaining your business proposition, sales, getting customers etc) On the other hand, it's apparent that Ted has done quite a bit of traveling (Gotta raise those first round funds) and I found that interesting in terms of getting something like Payperpost off the ground.

New Century Financial to shutdown home lending unit

2007-05-04T08:15:00.000-07:00

New Century Financial is shutting down it's home lending unit (which it was shopping around for sale. Surprisingly no one seemed to think that jumping into the sub prime market was a good idea right now). The firings will take place tomorrow. This is on top of the 3,200 already let go. This means that New Century Financial will let go 70% of it's work force.

Related Article at Bloomberg
New Century Shuts Lending Unit as No Buyers Emerge (Update2)

New Mortgage Broker Directory

2007-05-01T09:19:00.000-07:00

There is a new mortgage broker directory covering California. California Mortgage Brokers is a service offered by Personalhomeloanmortgages.com. They cover Mortgage Rates nationally and have a full listing of California Mortgage Brokers, available on the web. You can use the city and state navigation links to find your local city/state pages to find a broker in your specific area. They offer a nation wide directory of mortgage brokers and you can easily navigate by city for example (San Jose Mortgage Brokers or Pasadena Mortgage Brokers. After a bit of poking around I found both my first mortgage broker and my second mortgage broker based out of Irvine.

This is a sponsored post.

Countrywide hit harder than I expected

2007-04-27T09:22:00.000-07:00

It's apparent that Countrywide was hit harder by the subprime marketi than we originally anticipated. I had originally thought based on their perfomance last quarter. The subprime part of Countrywide's portfolio drove down profit by 37% over the previous quarter. I had expected Countrywide's internal knowledge of the California market (and how cyclic it can be) to mitigate some exposure to the fall out in the subprime market. It's apparent that even Pasadena based Indymac isn't immune. "IndyMac, whose Alt-A loans aren't supposed to be as risky as subprime mortgages, reported its lowest profit in almost three years. Earnings fell to $52.4 million, or 70 cents a share, from $79.9 million, or $1.18 million a year earlier."

Media Reports:
Bloomberg on Countrywide's 1st Quarter 2007
CNN Money on Countrywide

Bank Account Returns

2007-04-26T17:31:00.001-07:00

Typically your FDIC insured bank accounts aren't a great place to earn a decent return. One site, Savingsaccounts.com is looking to change that. It offers online banking interest rate comparisons at SavingsAccounts.com will help you find the best high yield online savings account or checking account.

What they have done is assemble in one location the best checking and savings accounts that have higher yields than typical 1% interest accounts. What I find interesting is that they have done a great job covering the various types of accounts available that yield from 2.29% to 6% rate of return. If you have money in your checking account, doesn't it make sense to have a decent rate of return on those funds? All banks offer online access and some have minimum requirements. The 6.00% rate of return actually has no minimums from HSBC online banking. It makes sense once your have consolidated your debt to begin earning a reasonable return on your checking or savings account.

This is a sponsored post.

Mortgage Fraud Analytics

2007-04-26T09:32:00.000-07:00

Basepoint has recently launched two new services (Enhanced Fraud Review and Fraud Organizational Framework) which are designed to help eliminate mortgage fraud for originators. Both services will help identify and prevent the funding and purchase of fraudulent loans by incorporating proven best practices into the loan review process. According the to Tim Grace, president and CEO of Basepoint,

“The concept of Enhanced Fraud Review is simple. BasePoint helps companies pin-point those mortgage loans where fraudulent misrepresentations are most likely to exist using our market leading FraudMark™ scoring solutions. Then, using the Enhanced Fraud Review, we guide lenders and due diligence companies through an intelligent process for investigating those high risk applications, vetting out the actual misrepresentations and thus preventing fraud from slipping through. The guided process takes place in the form of an intelligent checklist that an underwriter completes, and which can dynamically adjust according to the underlying risk and information in the application itself.

The second service, Fraud Organization Framework, facilitates improved risk and fraud management systemically. Lenders and investment banks are focused now more than ever on controlling credit and fraud risk. Investment banks are implementing FraudMark™ scoring before sampling for due diligence and using Enhanced Fraud Review at their due diligence companies for each loan trade. To ensure that fraudulent loans never reach the point of purchase, lenders are implementing organizational structures that ensure higher quality loans are ultimately funded before being sold on the secondary market.

Using BasePoint’s service to define new risk management organizational structures, lenders can accelerate their success in minimizing fraud and risk. For investment banks, this service recommends the structure and staffing of the due diligence fraud review process. BasePoint’s new Fraud Organizational Framework is based on best practices in fraud management from within the mortgage industry as well as other areas of financial services including highly advanced organizational practices that have been developed in the credit card industry over the past two decades. BasePoint fraud consultants work with clients to design, introduce, and implement the right fraud management processes to achieve each organization’s fraud and risk management goals."

While Basepoint's software might be more effective than current measures (and in many cases far more effective) but the root case was the loose credit standards that epitomized this round of housing boom. On the other hand Basepoint analytics can help capture more subtle forms of fraud than simple income falsification. Mortgage fraud is often perpetuated by fairly sophisticated individuals who often practice it on a wide scale. This give originators a leg up on those individuals.

Related URLS:
Basepoint Analytics

Loans - Cover that shortfall

2007-04-25T08:49:00.000-07:00

In my last post I covered foreclosure - what to do?. In this post I am going to talk about what to do if you just have a temporary shortfall. Sometimes secured loans are one answer. These are loans that are secured by personal or real property and typically have a higher interest rate. They can help you cover a shortfall or temporary loss of income. Sometimes you can make your mortgage payment but can't make your credit card payment. Other times homeowner loans are the way to go. Typically these are either seconds or home equity lines of credit. If your credit is good apersonal loans are the way to go, enabling you to consolidate expenses an other other options. In any case the best way to go is to consolidate your loans and reduce your expenses. Loans should be at best a temporary measure to help solidify your financial position. Successful management of your loans will enable you to improve your credit score, and qualify for lower interest rates on the future loans you might have.

This is a sponsored post.

Foreclosure - What to do?

2007-04-25T07:44:00.000-07:00

Many people avoid the problem of home foreclosure, not realizing that proactive measures can save your house. Let's face it, it's embarrassing to be behind on your mortgage, but don't let embarrassment cause you to lose your house. Remember the mortgage holder doesn't really want to foreclosure on the home. Foreclosure is expensive and in today's market usually means that the lender is going to lose money. Furthermore foreclosures can have network effects driving down home values throughout a neighborhood. If a lender has additional loans out there it can adversely affect their portfolio. So here are some steps you can take

Face the problem.
This means immediately calling your lender when you know you cannot make your payment. Most people never bother to call the lender, treating it like a credit card vendor you are behind on. The vendor owns the majority stake in your home. Treat them like a partner, not a creditor you would rather avoid.
You have options.
You may have some options including negotiating a repayment plan, requesting forbearance and asking to restructure the loan.

Under a repayment plan, a lender will give you a fixed amount of time to repay the amount you are behind by combining a portion of what is past due with your regular monthly payment. At the end of the repayment period, you will have paid back the delinquent amount.

In the case of a forbearance, the lender will temporarily allow you to pay less than the full amount of your mortgage payment and may even exempt you from paying anything during the forbearance period.

Typically you qualify for forbearance if you can prove that you'll be getting funds from a bonus, a tax refund or some other source that will let you bring the mortgage current at a specific time in the future. You may also qualify for a forbearance if your income has dropped temporarily.
The environment has changed.
When the real estate market was red hot, lenders were less likely to restructure or work with borrowers. Now that the market has cooled lenders are much more likely to work with home owners. Lender don't want to be in the realty business.
There are non profit options.
For example the Homeownership Preservation Foundation, a nonprofit organization based in Minneapolis, has established -- with a lot of funding from lenders -- a toll-free hotline at 1-888-995-HOPE (4673), available in English and Spanish. You can also get information by going to http://www.995HOPE.org.

There are options out there to avoid foreclosure, you just need to find them and face the problem.

Mortgage Prep

2007-04-24T16:09:00.000-07:00

Most people just don't take the time to qualify for the best rate on their mortgage. That preparation starts about 6 month before you apply. Ideally you should check your credit at least a year in advance but by checking 6 months in advance and cleaning your credit then (by paying everything off) you can significantly improve your credit score and lower your rate. What do you do even if you have poor credit? There are a number of vendors available for bad credit mortgages for poor credit customers. By just doing the minimal amount of work cleaning your credit, you can improve the rate on your Mortgage. If your APR is too high or your ARM has reset, it might be time to consider a remortgage as an option.

So to improve your interest rate for your mortgage, the first clean your credit as best you can 6 months before applying for a re-finance or for your current lendor.

This is a sponsored post.

Blame it on the Rain

2007-04-24T11:10:00.000-07:00

NAR attributes the worst month to month drop in existing home sales in 18 years to "unusually" bad weather in February. Well the weather was like it always was in February - cold and rainy. More than likely the increase of sales the previous three months was due to unusually warm weather. See the weather can be used as any excuse. How the world works they have an interesting metric for tracking new housing starts - remittances

Monthly remittances from the U.S. to Mexico have dropped every month since their peak of $2.6 billion in May 2006 -- shortly before new-home construction in the U.S. plunged. In February 2007, the latest month for which data are available, remittances to Mexico had slowed to $1.7 billion.

New housing starts have been coasting on builders using their existing permits to continue building. In other words they are building what they have already permitted but aren't seeking as many new permits.

H&R Block Leaving Mortgage Business - Oh yeah we are selling Option One too!

2007-04-20T07:39:00.000-07:00

H&R Block has decided to sell Option One mortgage (the first provider of my very first mortgage) to OOMC Acquisition Corporation. The expected closing date is H&R Block;s fiscal second quarter. From Stockwatch

"It said the transaction excludes Option One subsidiary H&R Block Mortgage Corp, which it has decided will cease operations. This will result in around 25 mln usd in pretax charges for severance, facilities closure and other costs and a 16 mln usd goodwill impairment charge of around 16 mln usd in its fiscal fourth quarter."

Once again the bitter pill is coated with sugar. The real story here isn't that H&R Block is selling Option One. It's that it's leaving the mortgage business altogether. This particular story is very clearly a rehashed corporate PR which is designed to hid a huge fact in plain sight, namely that H&R Block is leaving the mortgage business. That fact is thrown in as throw away paragraph at the end.

Wells Fargo Beats the Street

2007-04-18T09:34:00.000-07:00

Wells Fargo beat the earnings estimate. They did so on the growth of their commercial lending and a growth in deposits. It's also apparent Wells has managed their sub prime exposure proactively since 4th quarter 2006. I imagine the previous corporate experience with the California market's previous two real estate slow downs is one reason why Wells was able to manage the turn in the sub prime market. Wells did set aside 715 million for the softening home equity market. Earnings were reported at $.64/share

Here are the stories reporting on Wells Fargo's earnings.
Marketwatch:Wells reassures on subprime exposure, warns on home equity loans

Fremont General Sells Subprime Portfolio

2007-04-16T10:44:00.000-07:00

Santa Monica based Fremont General is selling most of it's sub prime portfolio. The buyer is still undisclosed but there are some notable things about this deal.

Fremont General is taking a 100 million dollar pretax loss.
The deal is largely being underwritten by the sale of it's residential real estate assets to the same entity. "The Company alsoannounced that it has entered into exclusive negotiations with the same institution under an executed letter of intent to sell most of it's residential real estate business and assets." From PRNewswire
After the sale the companies cash position remains strong with 1.5 billion in assets.

Fremont General will exit the sub prime market with this sale. The discount is pretty heavy but considering that the current subprime market has a foreclosure rate of 4%. Fremont General was smart to leave the market. Remember this is going to be the first year where ARMS are resetting to actually include principal. We can expect the ARM foreclosure rate to sky rocket in the upcoming years. This won't hit the California market as hard since the California economy is vibrant. I expect it to hit parts of Texas, Indiana, Georgia and other bid up secondary markets pretty hard.
Related Links:
Fremont General

Official Announcement of Fremont General's sale it's subprime portfolio

Wells Fargo Announce 1st Quarter 2007 earnings

2007-04-16T09:40:00.000-07:00

I am waiting for the announcement. It looks like they are announcing EOD today.

Industrywide foreclosure rate was 0.54 percent in the fourth quarter, the highest in its 37 years of surveys.

2007-04-13T12:03:00.000-07:00

Amidst the reporting that Countrywide was reporting an increase in foreclosures was the news that Countrywide was also increasing the number of loans that they were servicing. Additionally it was reported that foreclosures are now the highest ever recorded in 4th quarter 2006. For Countrywide having more loans in the pipeline is a clear sign that the long predicted consolidation in the marketplace is continuing. Countrywide as the largest US mortgage lender isn't immune to the effects of the subprime market but it's far more likely to weather the storm. Furthermore customers are more likely to chose vendors who are larger (and thus seen as more trustworthy). It's going to be interesting to see what Wells Fargo reports on April 17th.

1/3 of all ARMs in California will end in forclosure

2007-04-11T08:21:00.000-07:00

One of the things I love is little tidbits that sometimes get buried in articles about the implosion of the sub prime market. This article is about how lawmakers are blaming mortgage bond investor should be held liable for deceptive loans. Well there is plenty of blame to go around for the sub prime market (starting with Alan Greenspan's decision to keep the prime artificially low). But four paragraphs in we get this little tidbit

Economist Christopher Cagan projected about a third of all adjustable-rate loans originating from 2004 to 2006 will default because of reset, when the initial "teaser rate" expires and borrowers must start making regular payments that include principal, he said in a study by First American CoreLogic released last month.
While many consumer and civil rights groups want government intervention, not everyone is pleased about any legislation costing taxpayer dollars.

"People have bought houses they can't afford, period," said Christopher Thornberg, economist and principal of Beacon Economics. "So unless the government is going to give them $100,000 to $200,000 each, what option do they really have?"

Given that sub prime East Bay borrowers who are sixty days late have risen from 4.29 to 12.23 percent, that rate adjustment is going to come as a complete shock.

The problem is of course is that there isn't a clean happy solution to the sub prime borrowing situation. It's going to end in foreclosures, tighter lending standards and an overall tightening of credit.

The Subprime Directive

2007-04-09T16:23:00.000-07:00

For all the talk of the minimal effect the sub prime defaults are going to have, it's pretty apparent that the "minimal effects" are going to be larger than anyone has expected. Let's just look at the current closings and layoffs

Loancity closed on 3/22/07
Countrywide's subprime mortage defaults for 2006 may exceed the company's highest on record.
New Century lays off 54% of their workers (this company is headed for the dustbin)and files for Chapter 11
Aegis Lending plans to shutter its Sacramento office
People's Choice (another sub prime lender) files for chapter 11

The shake out in California continues. You can bet that you will hear about it hear first (or nearly first). New Century was one of the ones that we reported on very early on (when I got a few emails about the situation there).

New Century Recieves C&D

2007-03-20T16:57:00.000-07:00

Well you heard here first but now it's official, Irvine based New Century has received a Cease and Deist order from the State of California and Fannie Mae will stop buying their loans.

It's apparent that the chicanery over at New Century has gone well beyond simply foreclosures on the sub prime market.

"The filing also said the company has received cease-and-desist orders from California. The state alleges that New Century illegally failed to fund mortgage loans after closing."

Someone is going to jail.

Defaults begin sink companies

2007-03-13T10:50:00.000-07:00

To quote Queen, "Another bites the dust". This time the mortgage company going under is Irvine based sub prime provider, New Century Financial Corp. It's creditors have cut it off as the defaults in the continue to rise. What's more telling is the percentage of sub prime loans, and their marketshare have skyrocketed in the last three years, going from 6% of the market to 22% of the market. Foreclosures and defaults will have a ripple effect throughout the California housing market.

The so-called sub-prime lending industry that specializes in loans to risky borrowers has been tormented for months by soured loans, creating huge losses and forcing about three dozen large lenders to be sold to other companies, to file for bankruptcy protection or to close operations altogether.

On Monday, New Century announced that the Wall Street firms that supplied its funding had either cut off fresh capital or were poised to do so, leading some industry observers to say bankruptcy was likely. The company's stock plunged $1.55, or 48%, on Monday to $1.66 before the New York Stock Exchange halted trading.

Less than a year ago, New Century shares were worth nearly $52 each.

As New Century's stock sank, those of other sub-prime lenders suffered too. Santa Monica-based Fremont General Corp. fell $1.30, or 16%, to $6.73. The firm said last week that it would exit the business under pressure from regulators.

Homebuilder shares also stumbled on fears that they will have fewer customers. Hovnanian Enterprises Inc. fell 6% and Pulte Homes Inc. dropped nearly 5%.

This is likely affect other mortgage providers with less exposures and will lead to a much needed tightening of lending standards. This will exert a downward pressure on California homes in several ways. First of expect more distressed sales of homes, secondly expect fewer offers on your home for sale since their will be fewer buyers competing for it.

See No Evil

2007-02-26T14:43:00.000-08:00

Seeking Alpha has a bubble tracker and round up. Remarkably people who have a vested interest in saying things are GREAT continue to do so. Here's a great one from Idaho, ""Sales of single-family homes in the Treasure Valley in January were off 27% from Jan. 2006," yet according to Don Hubble of Hubble Homes, "We're optimistc." Talk about cognative dissonance.

Here's another report - this time in California in the Central Valley with an expert saying the housing bubble has adjusted

"The foreclosure market in California and the nation in 2007 may not be quite as intense as it was last year but many home buyers who used creative financing to get into their homes are still in danger of foreclosure, says Serdar Bankaci, founder and president of Default Research Inc. of Mt. Pleasant, Pa."

Look at that lead... "may not be quite as intense"? Based on what data? Let's take a t the actual data. Here's a great post at the OC Register
"RealtyTrac from Irvine reports ....

"California’s foreclosure total of 14,430 was the nation’s second highest and represented a 14 percent increase from the previous month. The state’s foreclosure rate of one new foreclosure filing for every 846 households registered slightly above the national average and 14th highest among the states."

So instead of cooling down - the foreclosure rate is actaully INCREASING in California.

Exclusive Luncheon for Loan Officers & Mortgage Planners!

2007-02-07T18:11:00.001-08:00

Exclusive Luncheon for Loan Officers & Mortgage Planners!
Join us for a FREE Educational LUNCHEON

Your customers have many choices...learn how to stand out in the crowd!

You're invited to join other top industry professionals at our FREE LUNCHEON at MALLARDS Restaurant. You are welcome to invite fellow professionals or co-workers to attend with you, but this event is reserved for mortgage industry professionals only.

We'll talk about our views on the current market and what you can do to skyrocket your sales in today's competitive environment. You'll learn how to differentiate yourself and add value for your customers where it matters most! An RSVP is required as we will be serving a delicious meal so call (800) 586-4604 today to guarantee your seat!

There are two dates to choose from so take your pick!

February 12th or 16th
11:30 am - 1:30 pm
Mallards Restaurant
3409 Brookside Road
Stockton, CA 95219

Some of the Exciting Topics We'll Discuss:

* How to DIFFERENTIATE yourself in a competitive market and
add value where it matters most!
* The ONE fundamental mistake made by most households
when making money decisions.
* How to UNDERSTAND average rates of return: Why what you
are shown is not typically what you get!
* How MONEY is really intended to work.
* How to realize MULTIPLE RATES of return on your money.
* How to TEACH your clients these financial concepts and more!

Join us to learn some of the latest financial strategies! There will be no products sold or even offered for sale at this 100% educational event. Our luncheon is simply an informational opportunity for you to learn cutting-edge strategies that will help you grow both professionally and personally.

At Verdeo, our mission is to continually seek ways to maximize people's full wealth potential by creating the highest efficiency on every dollar at work, while creating a quality of life that exceeds their expectations. If you are a Mortgage Professional looking to add value to your client relationships and position yourself as one of their Trusted Advisors, then we encourage you to join us for an informational workshop that will surely make a difference in your career.

February 12th or 16th
11:30 am - 1:30 pm
Mallards Restaurant
3409 Brookside Road
Stockton, CA 95219

To RSVP, call (800) 586-4604 today!

Study Debunks Boomer Urban Migration Myth

2007-01-30T15:19:00.000-08:00

Study Debunks Boomer Urban Migration Myth . One of the things that many realtors were reporting that Baby Boomers were returning to cities from the suburbs. The information was largely based anecdotes such as the number of older adults in enrolled at City Colleges. The recent study indicates this is myth.

Corrections - Secondary markets are first.

2007-01-15T09:42:00.000-08:00

It's becoming pretty apparent that housing market correction doesn't bode well for the secondary California markets. These are markets that have been bouyed up by the bubble but whose fundamentals just do not support the price appreciation. They are just outside the major markets and include Bakersfield and parts of the Central valley. Most analysts are predicting major prices declines in these markets. TO my mind this makes complete sense as real estate is always highly regional. These markets were quickly driven up as they were the only affordable housing in the area - the problem of course is that the price of gas means that living in Bakersfield and commuting to Los Angeles is an incredibly expensive proposition. Add in a negative amortization loan which is going up, combined with negative equity and you are setting the market for some sharp price declines in the medium term and stagnated appreciation (probably below inflation) for the next 10 years.

Mortgage Broker Shakedown continues

2007-01-10T12:36:00.000-08:00

The California mortgage broker market continues it's shakedown. I have gotten four email reports of brokers closing their doors. I can only guess where this all gonna shake out. Companies to watch Aegis & New Century apparently

NAR 2006 Prediction WRONG!

2007-01-03T12:42:00.000-08:00

Back in December of 2005 the National Association of Realtors (NAR) made a woefully wrong prediction. Thanks to Business Week for finding this gem:

PREDICTION: The national median home price will rise about 6.1% in 2006. Over a full year, it "has never declined since good record-keeping began in 1968." — National Association of Realtors, Dec. 12, 2005

THE REALITY: Through October, the median price of residential properties was down 3.5% from a year earlier.

The NAR was way off on this prediction. The median price decline is even worse if you take into account all the extra incentives that have been thrown on new home buyers. Don't trust the National Association of Realtors. Remember, David 'the shill' Lereah works there!

Mortgage insurance will be tax deductible for some home buyers (Pittsburgh Post-Gazette)

2006-12-23T02:50:00.000-08:00

Mortgage insurance will be tax deductible for some home buyers (Pittsburgh Post-Gazette)
Mortgage insurance will be tax-deductible in 2007. For some homeowners, the new law means it will cheaper to get mortgage insurance instead of getting piggyback loans.

Essentially this means that instead of getting a piggyback loan (which was tax deductible) you can now deduct the cost of PMI on your taxes. Given that PMI is typically cheaper than the interest rate on the piggy back loan this makes this a viable option again. Please note this is a federal change so everyone benefits.

california mortgages california

Millenium Holding Group Announces Agreement to Develop Real Estate in Barstow, California (Market Wire via Yahoo! Finance)

2006-12-16T07:21:00.000-08:00

Millenium Holding Group Announces Agreement to Develop Real Estate in Barstow, California (Market Wire via Yahoo! Finance)
Millenium Holding Group, Inc. today announced that the Company through its wholly owned real estate subsidiary FYNRE entered into an agreement with MGM Development LLC to develop a 7.75 acre property in Barstow, California. Barstow, California is one of the fastest growing communities in that part of the country. The development, called Sun Ridge I, consists of 44 lots which will have modular ...

Moving inland to less desirable areas has always been California's response to continued growth. Barstow is affordable. Remember my post on Bakersfield being the new hot spot?

california mortgages california

Ownit - California sub prime lender closes 800 laid off

2006-12-07T10:34:00.000-08:00

Ownit Mortgage Solutions, a California company that described itself as one of the top 15 lenders to homeowners with weak or no credit histories, has shut down, citing "the current unfavorable conditions of the mortgage industry."

Merrill Lynch & Co. (MER) and private equity firm CIVC Partners hold stakes in Ownit, which built its book of new loans to $8.3 billion in 2005 from $1.1 billion in 2003, in part by introducing products like 45-year mortgages, according to its Web site. Ownit's demise comes as subprime mortgage lenders are being squeezed by higher funding costs, weakening loan demand and rising delinquencies.
"Effective Dec. 5, Ownit closed its doors, and we are no longer able to fund or process your loans," the company said on a recorded telephone message. "We apologize for any inconvenience."

Ownit ran out of cash needed to meet its obligations to repurchase loans from investment banks and others who bought them in the secondary market, people in the industry said. The banks, which convert the loan payments into mortgage-backed securities for sale to investors, can force the original lenders to repurchase loans if the mortgage borrowers default.

Bruce Dickinson, Ownit's chief operating officer, said he couldn't immediately comment pending discussions with lawyers.

In a letter to mortgage bankers and other business associates emailed Dec. 5, Ownit said, "For the past three years, we have pursued a mission to influence the mortgage industry toward increased affordability options for a changing market of home buyers. Change takes time, and we are saddened that the current unfavorable conditions of the mortgage industry did not afford us sufficient time to see our mission through."

Worsening conditions have pushed many owners of subprime mortgage firms to try to sell the businesses. Morgan Stanley (MS) bought Saxon Capital Inc. for $706 million earlier this month and Merrill plans to complete its $1.3 billion purchase of First Franklin Financial Corp., a large subprime lender that is owned by Cleveland-based National City Corp. (NCC) in the next few weeks.

National City bought First Franklin, which together with affiliates has $29 billion of mortgage loans, from its founder Bill Dallas, who went on to become chief executive of Ownit. Dallas didn't return a call for comment.
Merrill is believed to own about 20% of Ownit. A Merrill Lynch spokeswoman declined to comment. CIVC Partners, a Chicago-based private equity firm, also has a stake in Ownit and was an investor in First Franklin before Dallas sold it to National City. CIVC's Dan Helly, who oversees the Ownit investment, didn't return a call for comment.

The end came quickly for Ownit. "We were all working yesterday, assuming we were fine," Dave Hanthorn, a New Jersey-based employee who sells the firm's loans to mortgage brokers, said Wednesday evening. "At 5:15 last night we got the call that we were ceasing operations." He said the company gave no explanation for its funding problems.

Ownit laid off all its staff, according to a headhunter, who received an email that was reviewed by Dow Jones from a friend who worked at the firm. A voicemail message at the number of LesLee Delaney, a representative of Ownit in California, said the company will help mortgage brokers and other wholesale customers try to get their loans transferred to other lenders.

LoanWeb Honored by Los Angeles Business Journal

2006-12-06T09:16:00.000-08:00

LoanWeb Honored by Los Angeles Business Journal (PR Web)

Online mortgage marketing company recognized in top 100 fastest-growing.

Despite the LA Business Journal mostly being a vanity publication, it's refreshing to see a company like Loanweb continuing to thrive in today's tough market. Loanweb was one of the first brokers to really embrace the internet as a lead generation tool. They are based in Calabasas and have been doing online loan applications since 1996.

PUBC Announces New Client Contract With Castleview Home Loans

2006-11-26T09:05:00.000-08:00

PUBC Announces New Client Contract With Castleview Home Loans (SYS-CON Media)

Public Company Management Corporation (OTCBB: PUBC) announced that it has signed a contract with Castleview Home Loans, a 16-year-old mortgage banker and originator of first and second mortgages in California, Colorado, Idaho, Indiana, Louisiana, and Oregon.Under the contract, PUBC, through its subsidiaries GoPublicToday.com, Inc.,will provide management consulting services and advice to ., will provide management consulting services and advice to Castleview concerning various corporate and securities matters including Castleview's efforts to become a fully reporting public company.

This doesn't have a huge amount to do with the California market. Castle View is only a player in the second mortgage market in California. On the other hand a public offering is a big step for a company like Castle View. They don't have a huge presence in the sub prime market yet I question the timing of the announcement. Could they be going to the public markets in order to get the founders liquidity or do they need financing for other reasons.

Accelerating Mortgage Payments

2006-11-20T08:40:00.000-08:00

Accelerating your mortgage payment is the quickest way to pay off your home faster. Most people have had the opposite approach to their homes, using them like an ATM. Flooding the market with cheap credit has driven up the price of homes which then has encouraged the same wealth effect that people saw with their stock portfolios with their homes. Needless to say the tables have turned and people begun to look to pay off their debt faster.

Accelerating your mortgage payment is easy. First pay off any seconds or home equity lines of credit first. The interest there is far higher. Then simply include additional payments toward principal. Simply including one additional payment a year will shave 5 years off a 30 year mortage.

James P. Giraldin Re-Elected to the Federal Home Loan Bank of San Francisco Board of Directors

2006-11-14T20:27:00.001-08:00

James P. Giraldin Re-Elected to the Federal Home Loan Bank of San Francisco Board of Directors (Business Wire via Yahoo! Finance)

SANTA MONICA, Calif.----James P. Giraldin, President, Chief Operating Officer and board member of First Federal Bank of California, the wholly-owned subsidiary of FirstFed Financial Corp. and the third largest Los Angeles-based financial institution, has been re-elected to a three-year term beginning January 1, 2007 on the board of directors of the Federal Home Loan Bank of San Francisco.

Which is good to hear. James is a good guy and his experience and work at FirstFed should help on the Board of the Federal Home Loan Bank of San Francisco. They face a number of challenges there including a number of foreclosures in the East Bay.

Guide to Federal Grants and Government Assistance to Small Business

2006-11-14T19:43:00.001-08:00

2003 Guide to Federal Grants and Government Assistance to Small Business: Catalog of Federal Domestic Assistance, Loans, Grants, Surplus Equipment, SBA, GSA, SEC Information for Entrepreneurs, Startup Kit, Loan Programs, Financing, Law, Regulations, Reports, Workbooks ¿ Applying for Federal Assistance (CD-ROM) This is a spectacular collection of federal documents and resources compiled from the complete contents of two of our popular CD-ROMs (ISBN 193182889X and ISBN 1592480373). It's a great value - purchased individually, these CD-ROMs would cost $49.90, so you save over 60% by purchasing this CD-ROM!

FEDERAL GRANTSHere is the OFFICIAL guide to Federal Grants and other assistance, produced by the Federal Government, with over 16,000 pages of loans, grants, surplus equipment, and training from 1482 agency programs worth $300 billion!

In addition to the comprehensive, extensively cross-referenced catalog of programs, there is information on developing and writing grant proposals and applying for federal assistance. It is produced by the General Services Administration, Office of Government wide Policy. Our reproduction is substantially less expensive than the printed version offered by the Government Printing Office at $63, and more convenient than the CFDA website. As the catalog itself says, "Get started today exploring the amazing world of grants and loans provided by the Federal Government!"

The "Catalog of Federal Domestic Assistance" gives you access to a listing of all Federal programs available to State and local governments (including the District of Columbia); federally recognized Indian tribal governments; Territories (and possessions) of the United States; domestic public, quasi-public, and private profit and nonprofit organizations and institutions; specialized groups; and individuals. You can find assistance programs meeting your requirements and for which you are eligible. You can then contact the office that administers the program and find out how to apply.

Features of the catalog include:

September 11th: Assistance Programs relating to recovery/response and U.S. Government Resources for the events of September 11th
Types of Assistance
Applying for Federal Assistance
Developing and Writing Grant Proposals
Top 10% Program List
All Programs Listed Numerically
2001 Formula Report
Historical Index

The catalog includes this "note for individuals": "Many individuals [expect] to find some way to apply for a grant or loan directly from the Federal Government. While there are a limited number of programs offering direct loans to individuals, most programs provide funds to state and local governments or other organization to manage the distribution of assistance according to local needs. For example, a VA or FHA loan comes from a financial institution such as a bank, credit union, or mortgage company, not directly from the Federal Government." e Catalog of Federal Domestic Assistance (CFDA) Please see the Table of Contents tab for a complete list of the agencies with programs included on this CD-ROM.

SMALL BUSINESS ASSISTANCE This electronic book on CD-ROM presents comprehensive information for entrepreneurs with documents, forms, and materials from the Small Business Administration (SBA), General Services Administration (GSA), and Securities and Exchange Commission (SEC). It includes the complete SBA contents from our SBA disc (ISBN 1592480357) plus material from the GSA and SEC for small business owners and investors. SBA material includes:

SBA library of documents, forms, startup kit for small business, information about loan programs and financing, laws and regulations, small business research reports, success stories, training workbooks, disaster and terrorist relief loans and aid, franchising information, international trade assistance, listings and directories, and SBA standard operating procedures. A full set of "frequently asked questions" (FAQs) provides a wealth of information about how the SBA can assist small business owners.

GSA material includes information on small business support. The SEC material includes questions and answers, rules and pending rules that apply to small businesses, small business forms and associated regulations, and other information from the SEC Office of Small Business Policy.

The documents are reproduced using Adobe Acrobat PDF software - allowing direct viewing on Windows and Apple Macintosh systems. Reader software is included on the CD-ROM.

Our CD-ROMs are privately-compiled collections of official public domain U.S. government files and documents - they are not produced by the federal government.. They are designed to provide a convenient user-friendly reference work utilizing the benefits of the Adobe Acrobat format to uniformly present thousands of pages that can be rapidly reviewed, searched by finding specific words, or printed without untold hours of tedious research and downloading. Vast archives of important public domain government information that might otherwise remain inaccessible are available for instant review no matter where you are. This book-on-a-disc makes a great reference work and educational tool. There is no other reference that is as fast, convenient, comprehensive, thoroughly researched, and portable - everything you need to know, from the federal sources you trust.

Ok loose credit standards personified.

2006-10-26T09:46:00.000-07:00

This self aggrandizing 24 year old UNEMPLOYED web designer managed to buy 6 homes in less than two years using liars loans. The fact that he lied on his loans on his loans isn't surprising. I think it's the fact that he thinks getting enough media attention will bail him out. It will have the opposite effect especially since he has already admitted to mortgage fraud multiple times on his blog. Said thing is we predicted something like this would come out during the current run up of real estate in California over a year ago on this blog.

Flip that House showing signs of market corrections

2006-10-04T09:50:00.000-07:00

My wife Roxane is HGTV addict. She regularly watches the nearly every home improvement show on almost every channel. One she has been watching is "Flip that House" since she was in charge of the improvements we put into our California home before selling. We had quite a bit of work done on the house which included air conditioning, redoing the hardword floors, redoing the kitchen with granite and a new period accurate tile back splash. We also repainted the entire house.

On trend we have both noticed is the houses on "Flip that House" are no longer actually selling. Previously on the show they would show the actual profit from flipping the house. Now they just show the "projected profit." There's a problem with this - these shows take a year or so to produce - If the house sold then it's a simple matter of adding the graphic at the end of the show showing the actual profit. They have stopped doing that and only show what the "projected profit" at the end work on the house. They haven't included the carrying cost on the house (that no interest mortgage) nor do they include realtor's fees!

This struck me as odd as I watched a California couple attempted to flip a home in Thousand Oaks. They bought the house for 1.1 million, put $50,000 into and then attemped to put it on the market for 1.25 million. This couple had previously been flipping condos and so were used to just literally throwing on new paint and window treatment and then selling the condo. The problem of course was their expectations and the buyers expectations were completely at odds. For example in re-doing the kitchen they left the original plain white appliances. Someone buying a home for 1.25 million is going to want stainless steel and Traulsen fridges. On the island they went for granite tile instead of a solid custom cut piece of granite! When the agent asked why, they mentioned it would have been too much work! Yes but buyers in this market expect it

They didn't put in hardwood floors and instead put new plantation blinds throughout the house. Here's a hint guys - a million dollar home buyer is not gonna be impressed with the $800 you spent on blinds at Pier One.

The other problem of course is that they bought at the height of the California market were trying to flip it without understanding the market they were selling to. A million + home buyer has certain set of expectations. Even our home we put custom granite and tile with redone hardword floors. For 1.25 million - I expect hardwood floors throughout the home and a better kitchen.

Mortgage Rates Up For First Time In Seven Weeks

2006-09-25T07:24:00.000-07:00

Mortgage Rates Up For First Time In Seven Weeks

Mortgage rates reversed a six week downward trend, increasing slightly during the week ended September 7 according to the Weekly Primary Mortgage Market Survey released by Freddie Mac.

Frank Nothaft, Freddie Mac vice president and chief economist said "We expect that mortgage rates will continue to fluctuate as new economic data are released, but hold steady in the meantime".

Small increases in marginal rates aren't having the effects that they would normally on home sales because affordability concerns seem to still trump them. Buyers are keenly aware that today's distressed seller is going to be even more distressed tomorrow, thus pushing prices and demand even further.

Mortgage Rates Continue Up and Down Pattern

2006-08-15T07:52:00.000-07:00

Mortgage Rates Continue Up and Down Pattern

And this week, they are down.

Mortgage rates, that is. The one week up, two weeks down, two weeks up pattern continues as the markets try to outguess where the Federal Reserve is going with rates, fewer people apply for mortgages, and housing sales in some parts of the country also slide.

This is a holding pattern design to signal the markets not to panic. Aggressive moves in either direction would signal panic. Begin cutting rates and the market would perceive that the you are trying to jumpstart the housing sector again. Raising rates would also be equally problematic. So expect the continued pattern of up/down.

Peer-To-Peer Lending: A Prototype For The Future Of Mortgage Lending

2006-08-15T07:51:00.000-07:00

Peer-To-Peer Lending: A Prototype For The Future Of Mortgage Lending

Newsweek Magazine's Tip Sheet section last week featured two Web sites that have nothing to do with real estate or mortgage financing but may illustrate the future of the mortgage lending game.

It is not such a stretch to see a prospective homebuyer logging on to (example) Helpmebuy.com or some such with a request for the $250,000 he figures he needs to buy a home and the rate he is willing to pay and be pre-approved by a single lender or 1,000 of them in a matter of hours. This would truly be "lenders bidding for your business".

Per to per lending is more viable when dealing with business proposition. For example getting micro loans for a new startup. I have considered using Prosper.com for various projects. Using them to buy a loan just isn't viable I think since it's apparent raising $20,000-$30,000 this way simply isn't viable for most people. Most stories tend to be hard luck cases or attractive females.

Housing Bubble Watch: Building Stats Slip As Does Builder Confidence

2006-08-09T06:02:00.000-07:00

Housing Bubble Watch: Building Stats Slip As Does Builder Confidence

The two monthly reports that measure the health of the home construction industry were released this week. The U.S. Census Bureau and U.S. Department of Housing and Urban Development issued its report on housing starts in June and the National Association of Home Builders in conjunction with Wells Fargo published their monthly Housing Market Index (HMI) for July. Taken together the two reports are...

ARMS - Driving up foreclosures!

2006-06-19T12:29:00.000-07:00

This is a pretty good article which comes the AP via Yahoo. The article is surprisingly good and highlights what loose credit standards combined with ARMS leads to. All the examples cited in the article are on the margins, ie lower value homes, sub prime loans and in markets not nearly as hot as California. Overall according to the Mortgage Bankers Association, foreclosures fell in all categories except sub prime loans. My gut tells me that the numbers will be way up for sub prime loans as these are people who cannot get credit elsewhere and very often cannot re-finance into a fixed loan because of poor credit.

""ARMs are a ticking time bomb," said Brad Geisen, president and chief executive of property tracker Foreclosure.com. "Through 2006 and 2007, I'm pretty sure we'll see a high volume of foreclosures."

Last year, foreclosures hit a historical low nationwide at about 50,000. But that number has more than doubled since then, according to Foreclosure.com.

Let's keep in mind something. The number has doubled it's only JUNE! That means we are on pace to having four times the number of foreclosures in 2006 than we did in 2005. That's a huge spike and pretty frightening.

This won't have as much of an effect on California just yet,

"Gaines pointed out that although California's default notices are rising by the thousands, actual foreclosure sales remain in the hundreds. Because of California's still-active housing market, homeowners there can sell their properties before going into foreclosure.

On the flip side, in less active markets like Texas and Georgia, homeowners can't find a buyer in time and are forced into foreclosure."

A bit of statistics manipulation and things don't seem as bad as things really are in the Golden State

California, where the median home price reached $468,000 in April, leads the nation in the percentage of homes purchased with adjustable rate mortgages. Nationwide, ARMs account for 24 percent of all home loans.

"In our zeal to make mortgage lending more available to a greater number of people, it's normal to expect the foreclosure rate to go up," Gaines said.

The problem with this number is that it takes all mortgages and lumps together. So my father in law who purchased his home in 1977 for $77,000 (now worth well over $750,00 0) is lumped in. This hides and understates the real problems that ARMs are going to be in California. As I covered in a recent post 61% of new mortgages in 2005 are interest only! So people buying at the very top of the market with financial instruments set to reset in 2007 and 2008. 2008 is going to be a very tough year for anyone who bought with an ARM.

Report Attempts To Soothe Housing Bubble Fears

2006-06-15T09:47:00.000-07:00

Report Attempts To Soothe Housing Bubble Fears

Freddie Mac's monthly Economic Outlook for June was released last week. In what has become a mantra, the corporations Office of the Chief Economist, quoting Federal Reserve Chairman Bernanke's recent remarks, is predicting an "orderly and moderate cooling of the housing sector."

You say tomato, I say tomatoe! One man's "orderly and moderate cooling" is another's catastophic drop in price! When you have 6-7 months of price declines is that an orderly cooling? For those owners who bought at the top of the market with no money done, their entire house of cards comes tumbling down. As home values continue to decline, depending on your situation and how stretched you are it certainly might become catastrophic.

Two New Reports Show Housing Exuberance Is Waning

2006-06-13T06:13:00.000-07:00

Two New Reports Show Housing Exuberance Is Waning

Further evidence that the real estate boom is moderating came from the National Association of Realtors last week.

Quarterly figures on existing home sales which include single family houses and condominium units trended downward for the second straight quarter during the first three months of 2006.

This downward trend is natural given the rise in prices and the expectations of customer's minds that the market is cooling. If you can get a better deal by waiting a few months then you will, especially on a purchase as large as a house. Rates are already lower now then they were last year at this time so it's not the prime mortgage rates.

Mortgage Rates Drop

2006-06-01T12:30:00.000-07:00

USA Today has a great article mentioning the recent drop in mortgage applications. The old standard 30 year fixed is currently 6.66%. Remarkably despite all the media coverage of the real danger of ARMs,

The ARM share of activity edged up to 30.7% of total applications last week from 30.5% the previous week. It was the highest ARM share since late January

People seem to be using them - largely because the interest rates still trail 30 fixed but by less than a percentage point. Seems to me the market certainly in California is still frothy.

May Economic Outlook Report Lowers Expectations

2006-05-24T03:01:00.000-07:00

May Economic Outlook Report Lowers Expectations

Last month we ended our report on Freddie Mac's April Economic Outlook with the statement that "Freddie Mac's April Economic Outlook deviates only slightly from predictions in earlier months; the housing market is slowing but certainly not screeching to a halt."

May's report which was issued this week paints a slightly less optimistic picture.

Mortgage Rates Continue Uptick While Refinancing At Two Year Low

2006-05-17T02:48:00.000-07:00

Mortgage Rates Continue Uptick While Refinancing At Two Year Low

Mortgage rates barely moved during the past week according to Freddie Mac reporting for the period ending May 4 and the Mortgage Bankers Association for the week ending May 5. While the trend continued, as it has for some time, to be up for most products the one-year adjustable rate mortgage (ARM) actually declined according to both organizations.

Applications to refinance as a percent of overall mortgage activity decreased to ...

Mortgage Rates, Applications, Cash Out Refinancing All Up

2006-05-12T10:38:00.000-07:00

Mortgage Rates, Applications, Cash Out Refinancing All Up

Fixed mortgage rates increased for the fifth straight week according to Freddie Mac's Weekly Primary Mortgage Market Survey for the week ended April 27 and adjustable rate mortgages (ARMs) logged the sixth consecutive week of increases.

In a separate report Freddie Mac announced that cash-out financing of its owned loans recently hit the highest level since the third quarter of 1990.

Freddie Mac estimated that $170 billion in home equity will be converted to cash through refinancing during 2006.

Why Get Renters Insurance? We will Tell You.

2006-05-08T09:20:00.000-07:00

Why Get Renters Insurance? We will Tell You.

The news last month was full of awful pictures of the tornado damage that occurred throughout Missouri and Illinois. Along with the continuing debacle in Louisiana and Mississippi, the topic of insurance is once again on our minds.

Renter's insurance is remarkably cheap and quite frankly disaster can strike a renter as easily as it can strike a home owner. The fact that most renters don't have renters shouldn't be that surprising, most renters tend to be young and quite frankly not responsible. But a few bucks a month can save that DVD collection if something should happen to it.

Housing Bubble vs. Housing Market Slowdown

2006-04-18T05:24:00.000-07:00

Housing Bubble vs. Housing Market Slowdown

The central issue addressed by the April 2006 Economic Outlook issued by Freddie Mac on Monday is the conflict created between the strength of the economy and the increasing lack of housing affordability.

The report goes on to tie this lack of affordability to the growth in the popularity of adjustable rates mortgages and especially to nontraditional ARM products such as negative amortization and interest only loans. Use of these types of loans is often the only way families can qualify for a mortgage in these high cost communities. People buying homes with negative amortization loans are purely speculating in the market and they are speculating with someone else's money. This has driven the market onward and upward and pushed housing out of reach for many people in the market.

california mortgages california

Websites For The Home With No Homeowners Manual

2006-04-12T12:06:00.000-07:00

Seems strange that a vacuum, a refrigerator, bicycle, even a 4 inch house plant from Home Depot, comes with a manual or at least a set of instructions (place in indirect light, water only when soil is completely dry) but a homeowner is pretty much on his own when trying to operate, maintain, and protect his largest and probably most complicated investment.

As with so many things today, the Internet comes to the rescue. We found dozens of websites from a simple search for "home maintenance". Several of those we reviewed provided excellent information that can fill in for that missing home owner's manual. Each of the three listed below has its place and we recommend checking them out and then book marking them for future reference.

Housing Bubble Conflicting Data Released

2006-04-05T09:32:00.000-07:00

Housing Bubble Conflicting Data Released

The housing market threw the world another curve on Thursday. After five straight months of declining sales of existing homes, a sixth dreary month was pretty generally expected. Instead the National Association of Realtors announced that February sales of previously-owned homes had jumped 5.2 percent from similar sales in January. This was the largest monthly increase in two years.

Wow, so much for the housing bubble bursting. All of the "experts" are wrong. The national love affair with real estate continues. NAR itself said that the encouraging report was a sign that the market was "stabilizing" and should "level out" in the months ahead.

Of course this jump in sales was preceded by six months of price declines. So eventually the market had to readjust remember NAR has a vested interest in keeping prices high and keeping people buying

Credit Bureaus Roll Out VantageScore Credit Scoring System

2006-04-05T02:21:00.000-07:00

Credit Bureaus Roll Out VantageScore Credit Scoring System

...So, now that we are comfortable with what constitutes a score, what our own scores are, and how that indicates that we stack up, it is all going to change.

On March 14 the three bureaus announced that they have collaborated on a new credit scoring system "to benefit consumers and credit grantors." The new system named...

Second Home Sales Increase Their Share Of Real Estate Market

2006-03-30T09:29:00.000-08:00

Second Home Sales Increase Their Share Of Real Estate Market

The National Association of Realtors recently released an interesting report about the sale of second homes in the United States. While the survey is a little outdated, the data covers sales over five years to the end of 2004, it still provides a perspective as to who, where, and how non-primary residences are being purchased.

For example, during the years from 2001 to 2004, second home sales (which include both recreational/vacation property and investment property) more than doubled

This really isn't surprising, many home owners in the markets experiencing the most growth were taking equity from their rapidly appreciating California home and where investing it other markets. As these other markets cooled, the second home buyers were the first to leave.
Read More Now

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Housing Bubble Conflicting Data Released

2006-03-27T06:29:00.000-08:00

Housing Bubble Conflicting Data Released

NAR itself said that the encouraging report was a sign that the market was "stabilizing" and should "level out" in the months ahead.

While that's NAR's position as head cheerleader, it's apparent the the 5 months of declining prices and lower interest rates had an impact on declining sales and finally some people bought.

Read the Report at Mortgage News Daily

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Fannie Mae Saga Continues As Rudman Report Is

2006-03-22T05:26:00.000-08:00

Fannie Mae Saga Continues As Rudman Report Is Issued
The long awaited independent accounting report on Fannie Mae was released late last month, and while it sort of absolves Franklin Raines, former Chairman and CEO of the mega-mortgage company who, along with Timothy Howard the CFO lost his job at the height of the scandal, it comes down pretty hard on Howard. Interestingly, we did not find one mention of the accounting firm of KPMG which was also fired from its position of independent auditor, in the report's Executive Summary.

Mortgage Rates Hit Three Year Highs After months

2006-03-20T17:13:00.000-08:00

Mortgage Rates Hit Three Year Highs
After months of apparent indecisiveness, mortgages rates seem to have decided on a direction and are heading toward it. Unfortunately that direction is up! Both of the mortgage market surveys we track reported rates at their highest levels since mid-2002 and in one case since 2001.

Rate increases seem natural given the market and where it's headed.

Zillow May Not Be Ready For Prime Time

2006-03-10T08:22:00.000-08:00

Zillow May Not Be Ready For Prime Time
We have had a lot of feedback from readers about our first article about the Zillow.com website which was published here during the week of February 12. Nearly all of the writers were extremely negative about Zillow. For example: "This website is highly inaccurate. The values of the homes are not even close. A house valued at 380K will come back on Zillow as 212K. They have a serious database problem." "It's a very BASIC GUESS. It cannot 'see' the house (if the house is) damaged by a storm or fire or anything else. It cannot 'see' (if) the property is waterfront or has a spectacular view - or not - and compares (it) to only what's close in proximity - or the property that is gutted on the inside. Hey, it is free so everyone can use it at their own risk. VERY misleading in many areas and only decent for 'cookie cutter' neighborhoods in disclosure states. You can trust it about as much as a pie in the sky."

Environmental And Asthetical Alternatives Exist To Minimize Hardscape

2006-03-02T12:06:00.000-08:00

Environmental And Asthetical Alternatives Exist To Minimize Hardscape
Reducing the impervious materials used to accommodate vehicles and recycling the water that washes off of our roofs can pay big dividends to the environment and maybe even the household budget.

Additionally these systems can be used without running up your water bill to water your outside plants.

NAR Releases Monthly and Annual 2005 Existing Home

2006-02-21T14:24:00.000-08:00

NAR Releases Monthly and Annual 2005 Existing Home Sale Numbers
Home sales are obviously beginning to slow, but records were still set during 2005 in both volume and value. Well it's important to remember that real estate bubbles, unlike stock bubbles have many things propping up prices. Real estate bubble almost always deflate rather than crash.

Expedia Founder tries his hand at real estate

2006-02-08T16:37:00.000-08:00

"A decade ago, Richard Barton launched Expedia.com and helped transform the travel industry by handing consumers the same tools to book reservations that travel agents had long controlled.

Now, Barton is applying the same approach to real estate — and is banking on equally dramatic results."

Barton is hoping to disintermediate the real estate agents who for too long have had a monopoly over listings and commissions. That's free market enterprise in action. Barton has deep enough pockets that he can probably force NAR to compete.

Appraisal Fraud, Mortgage Brokers and the heating of the California Real Estate Market

2006-01-30T08:53:00.000-08:00

A lot of posts have written about the sometimes difficult relationship between appraisers and mortgage brokers. One thing has become clear though, appraisal fraud and appraisal exaggeration have played a part in the run up of housing prices well ahead of incomes in the California real estate market.

I realize that little supposition needs more support so let's take a look at the

role that the appraiser plays in a real estate transaction. Traditionally the appraiser's role is to secure the bank's interest in the transaction. The bank is the largest owner in any real estate transaction. Unless you are buying your home with cash, you need to get the money from somewhere.

Let's think back to how Ward Cleaver probably bought his house. It's a little different. Ward probably got a loan from a local bank guaranteeed by the VA. Little known fact about Ward - he served in WW2 as a SeeBee in the Pacific. His local banker probably knew his neighborhood, understood the value of the home and additionally was going to was likely to carry the paper throughout the life of the loan.

In today's market your loan is likely going to be done by mortgage broker. This broker has an interest in getting the deal done since that's the only way he gets paid. The actual lender on the property is probably going to re-package and sell the loan within a few months of the house closing.

So how can appraisal fraud play a part in a real estate bubble? The mortgage broker begins to assert pressure to "hit a number" with the appraisal. Don't think it doesn't happen?

According to Appraiser Petition - it certainly does

The concern of this petition has to do with our "independent judgment" in performing real estate appraisals. We, the undersigned, represent a large number of licensed and certified real estate appraisers in the United States, who seek your assistance in solving a problem facing us on a daily basis. Lenders (meaning any and all of the following: banks, savings and loans, mortgage brokers, credit unions and loan officers in general; not to mention real estate agents) have individuals within their ranks, who, as a normal course of business, apply pressure on appraisers to hit or exceed a predetermined value.

This pressure comes in many forms and includes the following:

the withholding of business if we refuse to inflate values,
the withholding of business if we refuse to guarantee a predetermined value,
the withholding of business if we refuse to ignore deficiencies in the property,
refusing to pay for an appraisal that does not give them what they want,
black listing honest appraisers in order to use "rubber stamp" appraisers, etc.

This combined with the free money and loose underwriting standards, means that that housing prices have grown faster than incomes and far faster than they should have. But this isn't a bubble blog.

Ameriquest Settlement and Corporate Moral Behaviour

2006-01-27T09:07:00.000-08:00

Sorry for the delay in posting a new piece of commentary.I have been swamped.
On the recent events that has stuck in my mind was the recent settlement by Ameriquest for a wide number of mortgage fraud offenses. (Changing rates, adding points and in general screwing the sub-prime market)

Here's some observations from the The Checkout - a consumer blog at the Washington Post

The settlement ends a two-year investigation by all 50 state attorneys general, banking regulators and local prosecutors into allegations that Ameriquest deceived consumers to sell mortgages, using high-presure sales tactics to meet employee sales quotas. In addition to paying $295 million in consumer redress and $30 million in legal fees, the company has agreed to change some of its business practices and accept outside monitors who will observe the company...

Ameriquest did not admit any wrongdoing in agreeing to the settlement; but issued a statement saying "we regret those occasions when our associates have not met this ideal to our customers' expectations... This agreement is good for consumers and fair to the company. It provides a framework for new lending policies that improve and enhance our ability to serve our customers and are a model for the industry."

One of things that immediately comes to mind is that any time you are writing a $325,000,000 check, you will want to do everything possible to avoid that. Despite the silly protests of "no wrongdoing" it's clear that Ameriquest knew they would lose at trial. Why? Because the last time I looked even a 1/3 of that money (roughly 100 million) would be quite a bit of legal defense. You settle now to prevent an even more devestating judgement at trial (undoubtedly in the billions of dollars). Why do corporations that have inflicted damage on hundreds of thousands of people insist when settling, "they admit no wrong doing?"

First of it's a purely legalistic defense so their lawyers think they can mitigate damage at trial. At every one of the civil trials for Ameriquest (from people who Ameriquest robbed from), they can mention that they admitted no wrongdoing in the hopes it will mitigate the cupability of the company. Why do corporations often do this?

Let's remember one of the roles the corporation serves for the individual who are employees. The corporation serves to lessen the moral responsibility for each employee. Each employee is then able to commit acts that they would never think of doing as a private person. This transfer of moral authority to a corporation is fairly obvious to anyone that thinks about it and is supported by the Milgram experiment which show how people can defer to authority even when it conflicts with their conscience. The transfer of moral responsibility from employee to the the corporation is yet another clear example.

Employees of Ameriquest lied, stole and robbed people of thousands of dollars - an action which they would not take in the context of say robbing a bank but were able to easily do in the context of sub prime loan.

I have seen people argue somewhat childishly "that corporations are composed of people." Yes they are comprised of people but their moral behaviour in groups is entirely different than their individual behaviour.

Rate Update

2006-01-18T16:39:00.000-08:00

Average mortgage rates for single-family homes in the 10 largest metropolitan areas as of Jan. 18 as compiled by bankrate.com. The rates are for 30-year, fixed-rate mortgages for 80 percent of the value of the house. A point is a one-time fee equaling one percent of mortgage.
Jan. 18 Prev. Wk
percent+points
Boston 6.14 + 0.11 6.23 + 0.05
Chicago 6.23 + 0.04 6.31 + 0.10
Dallas 6.08 + 0.56 6.25 + 0.42
Detroit 6.23 + 0.00 6.29 + 0.00
Houston 6.01 + 0.65 6.12 + 0.69
Los Angeles 6.16 + 0.48 6.27 + 0.46
New York 6.13 + 0.18 6.19 + 0.16
Philadelphia 6.00 + 0.38 6.13 + 0.26
San Francisco 6.19 + 0.20 6.30 + 0.20
DC Metro 6.01 + 0.55 6.07 + 0.54
National Avg 6.12 + 0.31 6.22 + 0.29

Freddie Macs ARM Survey Notes Increased Lender Discounts

2006-01-14T07:53:00.000-08:00

Freddie Macs ARM Survey Notes Increased Lender Discounts
While the flattening of the yield curve has not noticeably hurt the popularity of ARMS, it is largely lender discounts that have kept the products in the game. Not entirely surprising since lenders have large incentives to keep them in the game. Given the way that revenues are booked by lenders, they are heavily incentivized to push ARMS

california mortgages california

Great Little Real Estate Search Engine Mashup

2006-01-12T07:17:00.000-08:00

Trulia isn't the name of one of Cinderella's evil stepsisters, it's a total cool real estate search engine that currently covers California. It's best described as a mashup because it indexes real estate, links them up with Google maps and then makes the WHOLE thing available via RSS. You can search, set up parameters such bedrooms, price, square footage and type of property. Oh it has pictures too. Great resource.
Here's an example Ramona CA.

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California Real Estate Search Engine

Bankrate Update

2006-01-08T18:06:00.000-08:00

Here’s the latest numbers on interest rates for five common consumer products for the week of January 1st - January 7th. This national survey was performed by Bankrate.com on Wednesday, January 4th.

* Mortgages - 6.27% (30 Year Fixed)
* Home Equity Lines - 7.32%
* Auto Loans - 7.90% (48 Month - New Car)
* CD - 3.28% (One Year Yield)
* Credit Card - 12.94% (Standard Fixed)

A Bad Inspection Should Not Be The End

2006-01-03T07:52:00.000-08:00

A Bad Inspection Should Not Be The End Of The World (Cont)
Do not give up on your dream house just because the inspection report is less than dreamy. Money can fix most problems and your seller may be willing to pay his share.

california mortgages california

NAR Spins Existing Home Sales

2005-12-29T12:14:00.000-08:00

We have gotten two reports that the housing market is beginning to correct. First the sales of new homes reported their worst decline in 12 years. Now existing home sales PRICES and volume have dipped in a year to year comparison. Here's NAR's chief economist.

David Lereah, NAR’s chief economist, said higher mortgage interest rates were responsible for moderating sales, but noted it’s important to keep an eye on the actual level of home sales given the market surge this year. “The current pace of home sales activity remains historically strong – only eight months have had a higher sales pace,” he said. “A modest downtrend, to a sales volume that is expected to be the second-best year ever in 2006, will be good for the long-term health of the housing sector.”

Here's a warning I find useful for investors

One of the basic mantras of investing is that past performance is no guarantee of future results.

What people are really missing is the affordability barrier - it's simply not possible for most people in markets like California to BUY a home. If you cannot buy the home, pricing will inevitably drop or remain flat and have inflation do it's work.

BSD

Pacific Service Credit Union to offer below-market-rate mortgagesEast

2005-12-29T05:58:00.000-08:00

Pacific Service Credit Union to offer below-market-rate mortgages
East Bay Business Times - Pacific Service Credit Union has been approved by the California Department of Financial Institutions to offer below-market-rate mortgages to low- and middle-income home buyers. The Walnut Creek-based credit union is one of more than 80 credit unions serving the East Bay market.

Sales of new homes plunged in November by the largest amount in nearly 12 years.

2005-12-23T08:54:00.000-08:00

The party's over. It's official.

The Commerce Department reported Friday that new single-family homes were sold at a seasonally adjusted annual rate of 1.245 million units last month, a drop of 11.3 percent from October, when sales had surged to an all-time high.

Last month's decline was even bigger than the 8.7 percent drop-off that Wall Street analysts had been expecting. While sales of both new and existing homes are still on track to set records for a fifth straight year in 2005, analysts are forecasting sales will decline in 2006 as the housing boom quiets down.

Analysts are looking for home sales to dip by around 6 percent next year under the impact of rising mortgage rates. Analysts believe that house prices, which had been soaring at double digit rates, will moderate as well.

Some of that price moderation was evidenced in the November report, which showed that the median price of a new home sold was $225,200 last month. That was up just 0.3 percent from November 2004, the weakest year-over-year price change in two years. The November median price was down 4.1 percent from the October median sales price of $234,800.

In other economic news, the Commerce Department reported that orders to U.S. factories for big-ticket manufactured goods jumped to a record $223 billion in November. That was a 4.4 percent increase from October, representing the largest percentage advance in six months. Orders for durable goods had risen 3 percent in October.

The gain in demand for durable goods was far above the 1.1 percent increase Wall Street analysts had been expecting. But the strength was concentrated in a surge in demand for commercial aircraft, which shot up 133.8 percent to $25.9 billion from $11.1 billion the previous month.

Outside of this area, manufacturing demand was weak. Excluding transportation, durable goods orders dropped by 0.6 percent, the third straight monthly decline in these categories.

Some economists are worried that housing prices in some areas have been driven higher by a speculative frenzy that could see prices plunging as sales slow in the hottest markets. That scenario would evoke memories of the sharp declines that occurred when the stock market bubble burst in early 2000.

But other economists contend that housing is unlikely to exhibit the same collapse that the stock market did although they believe that the declines in sales expected next year will act as a drag on the overall economy.

By area of the country, sales were actually up by 13.4 percent in the Northeast, the biggest percentage increase in this region since January 1994.

However, sales fell in all other areas, led by a 22.1 percent drop in the West, the biggest decline in this region since February 1995. Sales were down 18.3 percent in the Midwest and fell 5.5 percent in the South.

The 4.4 percent rise in orders for durable goods, items expected to last at least three years, was the largest one-month advance since a 7.3 percent rise last May.

Analysts had expected a big gain in aircraft orders because of the sales success Boeing Co. had at the Dubai air show. Analysts said that Boeing booked 148 new plane orders for the month compared to 36 orders in October.

Orders for all types of transportation products were up 15.6 percent as the strength in commercial aircraft was offset by a 5.7 percent drop in orders for motor vehicles and parts and demand for military aircraft fell 44.3 percent.

Orders for non-defense capital goods, seen as a good barometer of business plans to expand and modernize, rose by 19.6 percent, but all of that strength was in the surge in aircraft orders. Excluding aircraft, non-defense capital goods actually fell by 2 percent last month.

Ameriquest Settles for $325 Million

2005-12-20T16:03:00.000-08:00

Ameriquest Mortgage Co. would pay $325 million and change some business practices under an agreement with 33 states to settle allegations of overcharging customers and urging real-estate appraisers to increase property values, the Los Angeles Times reported.

Ameriquest added to the boom in 33 states by encouraging real estate appraisers to increase property values.

"The company would repay $295 million to borrowers and the additional $30 million cost of the investigation, the newspaper said, citing a copy of the settlement proposal it obtained.

Under the terms obtained by the Times, the company would be prohibited from paying workers to increase loan fees and interest rates, and adding penalties for early loan repayments, the newspaper said.

Ameriquest loan agents also would be barred from discussing property appraisals with the people conducting the assessments.

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The Real Estate Blog @ the NYTimes

2005-12-19T19:13:00.000-08:00

I just noticed that we have been linked to from the real estate blog of the New York Times. The blog is good and offers a rather nice coverage of the bubble markets and great coverage of New York. Walkthrough Readers Welcome!

ResMAE Mortgage Corporation Offers 40/30 Product as Lower Payment Alternative

2005-12-14T11:11:00.000-08:00

ResMAE Mortgage Corporation Offers 40/30 Product as Lower Payment Alternative
Business Wire - 03 AM US Eastern Timezone ResMAE Mortgage Corporation Offers 40/30 Product as Lower wholesale specialty residential mortgage lender and servicer headquartered in Brea, California.

Real Estate Realty Q&A

2005-12-11T05:09:00.000-08:00

Real Estate Realty Q&A
MarketWatch - Dec 8, 2005 one tend to be substantially more satisfied with the broker and his Being a California resident, most of us out here cap our primary mortgage at $359,000

Study Reveals 'Bay Area' Mortgagae Brokers Among Highest Paid Professionals in the Country

2005-11-29T14:53:00.000-08:00

Study Reveals 'Bay Area' Mortgagae Brokers Among Highest Paid Professionals in the Country
PRWeb - A recent study revealed what many already know - the mortgage broker industry of California, specifically the Bay Area, is booming with profit margins far exceeding most throughout the rest of the country.

Median Price of a Home in California at $538,770

2005-11-28T19:12:00.000-08:00

Median Price of a Home in California at $538,770 in October, up 17.2 Percent from Year Ago; Sales Decrease 2.8 Percent

LOS ANGELES--(BUSINESS WIRE)--Nov. 28, 2005--The median price of an existing home in California in October increased 17.2 percent and sales decreased 2.8 percent compared with the same period a year ago, the California Association of REALTORS(R) (C.A.R.) reported today.

"While California is still experiencing year-over-year double-digit price appreciation, prices are starting to level off compared with the statewide peak reached in August 2005," said C.A.R. President Vince Malta. "Regionally, the median price continues to post strong gains, with the High Desert, Riverside/San Bernardino, and San Luis Obispo regions hitting record highs last month."

Closed escrow sales of existing, single-family detached homes in California totaled 621,530 in October at a seasonally adjusted annualized rate, according to information collected by C.A.R. from more than 90 local REALTOR(R) associations statewide. Statewide home resale activity decreased 2.8 percent from the 639,570 sales pace recorded in October 2004.

The statewide sales figure represents what the total number of homes sold during 2005 would be if sales maintained the October pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

The median price of an existing, single-family detached home in California during October 2005 was $538,770, a 17.2 percent increase over the revised $459,530 median for October 2004, C.A.R. reported. The October 2005 median price decreased 1 percent compared with September's $543,980 median price.

"Year-to-date sales in October were 3.1 percent above last year's level, on track with our expectations for 2005," said C.A.R. Vice President and Chief Economist Leslie Appleton-Young.

Highlights of C.A.R.'s resale housing figures for October 2005:

-- C.A.R.'s Unsold Inventory Index for existing, single-family detached homes in October 2005 was 4 months, compared with 3 months (revised) for the same period a year ago. The index indicates the number of months needed to deplete the supply of homes on the market at the current sales rate.

-- Thirty-year fixed mortgage interest rates averaged 6.07 percent during October 2005, compared with 5.72 percent in October 2004, according to Freddie Mac. Adjustable mortgage interest rates averaged 4.86 percent in October 2005 compared with 4.02 percent in October 2004.

-- The median number of days it took to sell a single-family home was 35 days in October 2005, compared with 34 days (revised) for the same period a year ago.

Regional MLS sales and price information is contained in the tables that accompany this press release. Regional sales data are not adjusted to account for seasonal factors that can influence home sales. The MLS median price and sales data for detached homes are generated from a survey of more than 90 associations of REALTORS(R) throughout the state. MLS median price and sales data for condominiums are based on a survey of more than 60 associations. The median price for both detached homes and condominiums represents closed escrow sales.

In a separate report covering more localized statistics generated by C.A.R. and DataQuick Information Systems, 97 percent or 391 of 403 cities and communities showed an increase in their respective median home prices from a year ago. DataQuick statistics are based on county records data rather than MLS information. DataQuick Information Systems is a subsidiary of Vancouver-based MacDonald Dettwiler and Associates. (The top 10 lists are generated for incorporated cities with a minimum of 30 recorded sales in the month.)

Note: Large changes in local median home prices typically indicate both local home price appreciation, and often, large shifts in the composition of housing market activity. Some of the variations in median home prices may be exaggerated due to compositional changes in housing demand. The DataQuick tables listing median home prices in California cities and counties are accessible through C.A.R. Online at http://www.car.org/index.php?id=MzU2NTg=.

Statewide, the 10 cities and communities with the highest median home prices in California during October 2005 were: Laguna Beach, $1,670,000; Los Altos, $1,585,000; Manhattan Beach, $1,437,500; Burlingame, $1,400,000; Saratoga, $1,377,500; Newport Beach, $1,305,000; Calabasas, $1,162,000; Santa Barbara, $1,125,000; Mill Valley, $1,062,500; Los Gatos, $985,000; Rancho Palos Verdes, $985,000.

Statewide, the 10 cities and communities with the greatest median home price increases in October 2005 compared with the same period a year ago were: Twentynine Palms, 93 percent; Laguna Hills, 76.1 percent; Upland, 52.3 percent; Yucca Valley, 52.3 percent; Sanger, 48.4 percent; Oakdale, 47.8 percent; Desert Hot Springs, 47.7 percent; Porterville, 47.5 percent; Patterson, 46.5 percent; Rosemead, 45 percent; Rancho Cordova, 43.9 percent.

Leading the Way...(R) in California real estate for 100 years, the California Association of REALTORS(R) (www.car.org) is one of the largest state trade organizations in the United States, with more than 180,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

October 2005 Regional Sales and Price Activity(a)
Regional and Condo Sales Data Not Seasonally Adjusted

Percent Percent Percent Percent
Change Change Change Change
in in in in
Price Price Sales Sales
from from from from
Median Prior Prior Prior Prior
Price Month Year Month Year

Oct-05 Sep-05 Oct-04 Sep-05 Oct-04
Statewide
Calif. (sf) $538,770 -1.0% 17.2% -4.5% -2.8%
Calif. (condo) $429,090 1.1% 15.2% -13.7% -5.2%

C.A.R. REGION
Central Valley $358,650 -0.7% 20.9% -14.0% -10.5%
High Desert $315,870 1.1% 31.9% -4.1% 24.1%
Los Angeles $557,730 -0.6% 21.7% -22.5% -2.7%
Monterey Region $717,030 0.6% 13.5% -23.3% -25.7%
Monterey County $675,000 -0.7% 16.8% -24.2% -22.0%
Santa Cruz County $769,000 2.5% 16.5% -22.3% -30.7%
Northern California $435,180 0.1% 17.9% -15.7% -21.7%
Northern Wine Country $628,800 -1.7% 20.7% -23.7% -17.4%
Orange County $701,520 -1.0% 12.8% -11.8% 5.3%
Palm Spgs/Lwr Desert $348,430 -6.1% 1.8% -12.2% 3.3%
Riverside/San Bern. $394,840 1.4% 24.2% -16.6% -7.5%
Sacramento $383,280 -0.2% 13.5% -12.7% -19.1%
San Diego $601,850 -1.7% 6.2% -13.8% -10.5%
San Francisco Bay $719,660 1.4% 10.6% -9.4% -10.7%
San Luis Obispo $603,120 0.2% 29.5% -19.2% 20.9%
Santa Barbara County $610,290 -0.1% 0.1% -11.6% -23.8%
S. Barbara S. Coast $1,225,000 -16.9% 18.4% -18.5% -35.3%
No. S. Barbara County $466,000 0.7% 7.9% -9.1% -16.7%
Santa Clara $741,000 1.1% 16.5% -11.1% -14.0%
Ventura $677,780 -0.1% 15.9% -22.2% -7.2%

na - not available

(a) Based on closed escrow sales of single-family, detached homes only
(no condos). Reported month-to-month changes in sales activity may
overstate actual changes because of the small size of individual
regional samples. Movements in sales prices should not be interpreted
as measuring changes in the cost of a standard home. Prices are
influenced by changes in cost and changes in the characteristics and
size of homes actually sold.

sf = single-family, detached home

Source: California Association of REALTORS(R)

Median Prices By Region - Current Month vs. Year Ago

Oct-05 Sep-05 Oct-04
Statewide
Calif. (sf) $538,770 $543,980 $459,530 r
Calif. (condo) $429,090 $424,580 r $372,600

C.A.R. REGION
Central Valley $358,650 $361,290 $296,550
High Desert $315,870 $312,410 $239,400
Los Angeles $557,730 $560,990 $458,210
Monterey Region $717,030 $712,800 $631,810
Monterey County $675,000 $680,000 $578,000
Santa Cruz County $769,000 $750,000 $660,000
Northern California $435,180 $434,690 $369,060
Northern Wine Country $628,800 $639,390 $520,980
Orange County $701,520 $708,840 $622,090
Palm Spgs/Lower Desert $348,430 $371,250 $342,310
Riverside/San Bernardino $394,840 $389,450 $317,990
Sacramento $383,280 $383,920 $337,780
San Diego $601,850 $612,030 $566,740
San Francisco Bay $719,660 $709,980 $650,920 r
San Luis Obispo $603,120 $602,160 $465,560
Santa Barbara County $610,290 $610,710 $609,850
S. Barbara S. Coast $1,225,000 $1,475,000 $1,035,000
No. S. Barbara County $466,000 $462,700 $432,000
Santa Clara $741,000 $733,000 $636,000
Ventura $677,780 $678,380 $584,950

na - not available
r - revised
Source: California Association of REALTORS(R)

KB Home Announces $1.5 Billion Credit Facility

2005-11-24T09:15:00.000-08:00

KB Home Announces $1.5 Billion Credit Facility
[Press Release] PR Newswire via Yahoo! Finance - Nov 22 2:42 PM
KB Home , one of the nation's largest home builders, today announced the successful closing of a new $1.5 billion unsecured revolving credit facility with a consortium of banks arranged by Banc of America Securities LLC and Citigroup Global Markets Inc.

LION Announces Third Quarter Financial Results

2005-11-02T03:41:00.000-08:00

LION Announces Third Quarter Financial Results
[Press Release] Business Wire via Yahoo! Finance - Oct 27 1:00 PM
LION, Inc. , a leading provider of online lead generation and advanced business solutions that streamline the mortgage fulfillment process, today announced its financial results for the third quarter and nine months ended September 30, 2005.

Homeowner tax breaks are breaking the budget

2005-10-30T08:26:00.000-08:00

Homeowner tax breaks are breaking the budget
Los Angeles Times, CA - 17 hours ago the mortgage interest deduction not because they care about helping low-wage earners own homes but because the tax break inflates housing prices, which leads
california mortgages california

Inland Empire Chapter of the California Association of Mortgage Brokers

2005-10-26T02:23:00.000-07:00

Work Week-Oct. 24-28
San Bernadino County Sun - TUESDAY, Oct. 25 The Inland Empire Chapter of the California Association of Mortgage Brokers will host this year's Loan Origination Expo, to be held from 9 a.m. to 4:30 p.m. at the Ontario Convention Center, 2000 Convention Center Way. to exchange business leads and referrals to stimulate new business.