15 replies to this topic

[nimblebear]

That many subprime mortagages are issued with interest rates in excess of 10% !!!!. I had no clue. 10% ? Thats a recipe for disaster. Spoke to former manager/broker for Countrywide, the biggest in this space. Broker said people were nuts taking these loans, had basically no credit and CW basically promoted this attitude. Broker was amazed how uninformed these customers were. 10% meant nothing to them. It could have been 15 or 20 and people would not have known the difference. Rather than the usual 6 or so folks with "normal credit" would get, etc. The people getting into these loans were absolutely clueless. CLUELESS. Almost all are above 8%. No need to wait for ARMS to reset here. These people will default, and continue to default for many many more months. Broker said the tip of the iceberg has been barely scratched. Standards were so relaxed, it is unbelievable. CW will be laying off many more. Good luck for those who feel this will not get bigger and affect the markets even more. ALT A and prime are going to be affected much more than anticipated. More on that later. Subprime is largely uncontained.

[dcengr]

That many subprime mortagages are issued with interest rates in excess of 10% !!!!.

I had no clue. 10% ? Thats a recipe for disaster.

Spoke to former manager/broker for Countrywide, the biggest in this space. Broker said people were nuts taking these loans, had basically no credit and CW basically promoted this attitude. Broker was amazed how uninformed these customers were. 10% meant nothing to them. It could have been 15 or 20 and people would not have known the difference. Rather than the usual 6 or so folks with "normal credit" would get, etc.
The people getting into these loans were absolutely clueless. CLUELESS.

Almost all are above 8%. No need to wait for ARMS to reset here. These people will default, and continue to default for many many more months. Broker said the tip of the iceberg has been barely scratched.

Standards were so relaxed, it is unbelievable. CW will be laying off many more.

Good luck for those who feel this will not get bigger and affect the markets even more. ALT A and prime are going to be affected much more than anticipated. More on that later.

Subprime is largely uncontained.

Umm why do you say these people were clueless? Lets see.. they put ZERO money down, get high interest rate loans, and wait for house prices to appreciate.

Then house prices don't, so they decide to default. They can't pay it off? Bankrupsy. What are they gonna do, toss them in jail? These people had nothing to lose.

Now lets take a look at banks.. they lent these people the money. BUT the banks took that debt and packaged it and sold it to hedge funds.

Now lets look at hedgefunds.. they got their money from RICH people.. who got their $ from selling realestate in the first place.

So everything works out.

[CAzzaro]

People who got 10% had terrible credit. If they wanted to buy a house it was their only choice. They have a history of course of not paying. Why the banks thought 10% would compensate them for loaning to a dead beat is a question. Anyway, they knew some people got 6%. But if you have a history of bad credit, you don't get 6%. You get 10%, and feel lucky to have gotten that. So yes, they will likely default. But not because the rate is 10%. They will default because that is their history....a history of late or no pay.

[CNSZ]

I do believe the water are much deeper than we thought, the subprime issue is going to get us into a recession. I am 100% short now, have no intention to cover the position until I see 20% more drop on sp.

That many subprime mortagages are issued with interest rates in excess of 10% !!!!.

I had no clue. 10% ? Thats a recipe for disaster.

Spoke to former manager/broker for Countrywide, the biggest in this space. Broker said people were nuts taking these loans, had basically no credit and CW basically promoted this attitude. Broker was amazed how uninformed these customers were. 10% meant nothing to them. It could have been 15 or 20 and people would not have known the difference. Rather than the usual 6 or so folks with "normal credit" would get, etc.
The people getting into these loans were absolutely clueless. CLUELESS.

Almost all are above 8%. No need to wait for ARMS to reset here. These people will default, and continue to default for many many more months. Broker said the tip of the iceberg has been barely scratched.

Standards were so relaxed, it is unbelievable. CW will be laying off many more.

Good luck for those who feel this will not get bigger and affect the markets even more. ALT A and prime are going to be affected much more than anticipated. More on that later.

Subprime is largely uncontained.

banks was bet on the value of property keep going up, if house price go up, they have no danger.

People who got 10% had terrible credit. If they wanted to buy a house it was their only choice. They have a history of course of not paying. Why the banks thought 10% would compensate them for loaning to a dead beat is a question.

Anyway, they knew some people got 6%. But if you have a history of bad credit, you don't get 6%. You get 10%, and feel lucky to have gotten that.

So yes, they will likely default. But not because the rate is 10%. They will default because that is their history....a history of late or no pay.

[atlasshrugged]

That many subprime mortagages are issued with interest rates in excess of 10% !!!!.

I had no clue. 10% ? Thats a recipe for disaster.

Spoke to former manager/broker for Countrywide, the biggest in this space. Broker said people were nuts taking these loans, had basically no credit and CW basically promoted this attitude. Broker was amazed how uninformed these customers were. 10% meant nothing to them. It could have been 15 or 20 and people would not have known the difference. Rather than the usual 6 or so folks with "normal credit" would get, etc.
The people getting into these loans were absolutely clueless. CLUELESS.

Almost all are above 8%. No need to wait for ARMS to reset here. These people will default, and continue to default for many many more months. Broker said the tip of the iceberg has been barely scratched.

Standards were so relaxed, it is unbelievable. CW will be laying off many more.

Good luck for those who feel this will not get bigger and affect the markets even more. ALT A and prime are going to be affected much more than anticipated. More on that later.

Subprime is largely uncontained.

Umm why do you say these people were clueless? Lets see.. they put ZERO money down, get high interest rate loans, and wait for house prices to appreciate.

Then house prices don't, so they decide to default. They can't pay it off? Bankrupsy. What are they gonna do, toss them in jail? These people had nothing to lose.

Now lets take a look at banks.. they lent these people the money. BUT the banks took that debt and packaged it and sold it to hedge funds.

Now lets look at hedgefunds.. they got their money from RICH people.. who got their $ from selling realestate in the first place.

So everything works out.

lol priceless!!

[kc135a]

That many subprime mortagages are issued with interest rates in excess of 10% !!!!.

I had no clue. 10% ? Thats a recipe for disaster.

Spoke to former manager/broker for Countrywide, the biggest in this space. Broker said people were nuts taking these loans, had basically no credit and CW basically promoted this attitude. Broker was amazed how uninformed these customers were. 10% meant nothing to them. It could have been 15 or 20 and people would not have known the difference. Rather than the usual 6 or so folks with "normal credit" would get, etc.
The people getting into these loans were absolutely clueless. CLUELESS.

Almost all are above 8%. No need to wait for ARMS to reset here. These people will default, and continue to default for many many more months. Broker said the tip of the iceberg has been barely scratched.

Standards were so relaxed, it is unbelievable. CW will be laying off many more.

Good luck for those who feel this will not get bigger and affect the markets even more. ALT A and prime are going to be affected much more than anticipated. More on that later.

Subprime is largely uncontained.

FWIW back in the late 70's or very early 80's I got another house, had a good employment record, perfect credit, and no debt.

Wow, I qualified for a 15.8% rate and took it because I did not have a choice.

The current rates are the best rates I have seen in my life time.

KC

[arbman]

Don't be so cruel guys, the people who had bad credit and accepted 10% interest were hoping (1) to cash in a quick 10-20% profit, (2) establish credit in 1 or 2 years of payment and refinance at lower rates. Both of them did not happen, it is really sad and I can feel their pain of loosing their homes and future by dealing with all the bankruptcies and what not...

[ed rader]

That many subprime mortagages are issued with interest rates in excess of 10% !!!!.

I had no clue. 10% ? Thats a recipe for disaster.

Spoke to former manager/broker for Countrywide, the biggest in this space. Broker said people were nuts taking these loans, had basically no credit and CW basically promoted this attitude. Broker was amazed how uninformed these customers were. 10% meant nothing to them. It could have been 15 or 20 and people would not have known the difference. Rather than the usual 6 or so folks with "normal credit" would get, etc.
The people getting into these loans were absolutely clueless. CLUELESS.

Almost all are above 8%. No need to wait for ARMS to reset here. These people will default, and continue to default for many many more months. Broker said the tip of the iceberg has been barely scratched.

Standards were so relaxed, it is unbelievable. CW will be laying off many more.

Good luck for those who feel this will not get bigger and affect the markets even more. ALT A and prime are going to be affected much more than anticipated. More on that later.

Subprime is largely uncontained.

FWIW back in the late 70's or very early 80's I got another house, had a good employment record, perfect credit, and no debt.

Wow, I qualified for a 15.8% rate and took it because I did not have a choice.

The current rates are the best rates I have seen in my life time.

KC

the average mortgage over my lifetime has to be around 9%. i now have a 5.25% 30-year fixed mortgage.

ed rader

[SandStorm]

That many subprime mortagages are issued with interest rates in excess of 10% !!!!.

I had no clue. 10% ? Thats a recipe for disaster.

Spoke to former manager/broker for Countrywide, the biggest in this space. Broker said people were nuts taking these loans, had basically no credit and CW basically promoted this attitude. Broker was amazed how uninformed these customers were. 10% meant nothing to them. It could have been 15 or 20 and people would not have known the difference. Rather than the usual 6 or so folks with "normal credit" would get, etc.
The people getting into these loans were absolutely clueless. CLUELESS.

Almost all are above 8%. No need to wait for ARMS to reset here. These people will default, and continue to default for many many more months. Broker said the tip of the iceberg has been barely scratched.

Standards were so relaxed, it is unbelievable. CW will be laying off many more.

Good luck for those who feel this will not get bigger and affect the markets even more. ALT A and prime are going to be affected much more than anticipated. More on that later.

Subprime is largely uncontained.

Umm why do you say these people were clueless? Lets see.. they put ZERO money down, get high interest rate loans, and wait for house prices to appreciate.

Then house prices don't, so they decide to default. They can't pay it off? Bankrupsy. What are they gonna do, toss them in jail? These people had nothing to lose.

Now lets take a look at banks.. they lent these people the money. BUT the banks took that debt and packaged it and sold it to hedge funds.

Now lets look at hedgefunds.. they got their money from RICH people.. who got their $ from selling realestate in the first place.

So everything works out.

So very well said. I love it. You deserve a standing ovation.

[BearItch]

I think you got it backwards. Seems to me the lending insitutuions were the real nut jobs in this fiasco. They were the uninformed ones. They were the clueless ones. The customers were like puppies being given a table scrap of prime rib. Did the lending instituions really think they would not take that tidy morsel? In the customer's mind: :stupid:

Edited by BearItch, 03 August 2007 - 04:26 AM.