Study on Liar Loan Foreclosures and loan modifications
Started by Riversider
over 16 years ago
Posts: 13572
Member since: Apr 2009
Discussion about
http://www.nytimes.com/2009/07/05/business/05gret.html Fist off the article doesn't call them liar loans, but unlike subprime loans which we knew were weak credits, Alt-A are loans that weren't never fully documented, which leads me to believe the appraisals might not have been proper, perhaps a drive-by viewing.. This throws cold water that it's a good thing to lend at say above 80% of LTV which... [more]
http://www.nytimes.com/2009/07/05/business/05gret.html
Fist off the article doesn't call them liar loans, but unlike subprime loans which we knew were weak credits, Alt-A are loans that weren't never fully documented, which leads me to believe the appraisals might not have been proper, perhaps a drive-by viewing..
This throws cold water that it's a good thing to lend at say above 80% of LTV which is basically what people like Maxine Waters & Barney Frank push for with regards to gov't sponsored lending(see CRA lending standards).
This also adds weight to the argument that we need the best quality appraisals which (appologies to the N.A.R.) protect the lender or entity who bears the risk of loss in the event of foreclosure.
It's also surprising that with regards to loans in securitizations that the lowest rated bond holders are not consulted or allowed to vote on modifications, if it's true that the loss rates are that high.
Last note. most modified loans default later, at least that's what we're hearing. Kinda like stats about re-addiction rates among former addicts..
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Mortgage Loan Losses Nearly 65% For Alt-A This number is staggering and blows my mind. Understanding that the banks may have been advancing interest for up to two years, and that legal fees may have been incurred, it still is mind blowing that there the residual equity was 35% and in some cases averaged 25%.
Highly suggestive here is that the risk of the loans was transferred via the magic of securitization to those who did not understand it...
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Response by tenemental
over 16 years ago
Posts: 1282
Member since: Sep 2007
Thanks for these posts, Riversider.
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Response by conradcounty
over 15 years ago
Posts: 124
Member since: Jul 2010
columbiacounty ,you seem upset. Is it because aboutready wished us farewell? Conveniently timed the morning she was going on vacation?
She'll be back. She wished streeteasy farewell two years ago. Jsmith posted the link to her farewell, didn't you see it?
aboutready
about 2 years ago
ignore this person
report abuse I'm sure a number of you will be happy to see my departure (although Spunky, I will truly miss you) but I have found a number of real estate blogs where I don't even feel compelled to post very often, because I agree generally with what's being said (and they're run by real estate brokers, no less.) I'm sure that nervous habit, or excessive boredom, will cause me to check in once in awhile (particularly about specific buildings I might be interested in), but generally I find you guys to be storks with your heads so stuck in the sand its gotta cause some major itching.
New York IS different, just not THAT much. Bye, and good luck.
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http://www.valpo.edu/law/faculty/awhite/data/may_09_summary.pdf
Mortgage Loan Losses Nearly 65% For Alt-A This number is staggering and blows my mind. Understanding that the banks may have been advancing interest for up to two years, and that legal fees may have been incurred, it still is mind blowing that there the residual equity was 35% and in some cases averaged 25%.
Highly suggestive here is that the risk of the loans was transferred via the magic of securitization to those who did not understand it...
Thanks for these posts, Riversider.
columbiacounty ,you seem upset. Is it because aboutready wished us farewell? Conveniently timed the morning she was going on vacation?
She'll be back. She wished streeteasy farewell two years ago. Jsmith posted the link to her farewell, didn't you see it?
jsmith9005
about 11 hours ago
ignore this person
report abuse I think I've heard this before - http://streeteasy.com/nyc/talk/discussion/2496-the-sky-is-falling
Who wants to take an over/under that she posts again within 3 months?
aboutready
about 2 years ago
ignore this person
report abuse I'm sure a number of you will be happy to see my departure (although Spunky, I will truly miss you) but I have found a number of real estate blogs where I don't even feel compelled to post very often, because I agree generally with what's being said (and they're run by real estate brokers, no less.) I'm sure that nervous habit, or excessive boredom, will cause me to check in once in awhile (particularly about specific buildings I might be interested in), but generally I find you guys to be storks with your heads so stuck in the sand its gotta cause some major itching.
New York IS different, just not THAT much. Bye, and good luck.