House Of Cards: The Mortgage Mess

Here is the link to the 60 minutes transcript and video. It four pages long, but worth reading. The last time I looked there were over 20 pages of comments also:

http://www.cbsnews.com/stories/2008/01/25/60minutes/main3752515.shtml#

Countrywide Soft Market County Index

Kingman just hit the top of a list and not a good one, we're a category 5. This is a list countrywide is using for lending criteria. The categories mean for loans:

For Countrywide Purchase Loans:
Soft Market Category 4-5 loans: Maximum financing will be reduced by 5%

Soft Market Category 1-3 loans: Maximum financing will be reduced by 5% if the appraisal or appraisal review indicates any of the following: Declining Market, Oversupply, Marketing time over 6 months.

For Countrywide Home Equity Loans:

Soft Market Category 5 loans: Maximum financing will be reduced by 10%

Soft Market Category 4 loans: Maximum financing will be reduced by 5%

Soft Market Category 1-3 loans: Maximum financing will be reduced by 5% if the appraisal or appraisal review indicates any of the following: Declining Market, Oversupply, Marketing time over 6 months.

Here is the complete chart:
https://www.cwbc.com/ContentManaged/files/SoftMarkets.pdf

Southern California Pasadena LA Times Reporter Renter

Three pages long, but an interesting read:

http://www.latimes.com/business/la-fi-shortsell20jan20,0,1815515.story?coll=la-home-center

How we cashed in before the housing crash

Friends thought he was nuts when a Times reporter sold his home and started to rent in 2005. But for him, the warning signs were just too hard to miss.

By Peter Y. Hong, Los Angeles Times Staff Writer January 20, 2008

Our friends said we were crazy. Relatives asked whether we were in financial trouble. But in April 2005, my wife and I bailed out of the American dream. We sold our two-bedroom Pasadena condominium and became renters again.

We got nearly three times what we had paid for the place nine years earlier. It seemed to us like a staggering profit -- and a sign that the market had been pumped up beyond reason.

The Deflation Time Bomb

http://www.lewrockwell.com/orig8/whitney5.html

The Deflation Time Bomb
by Mike Whitney


Is there anyone who still does not understand that talk of ‘inflation’ by officialdom is just a red herring intended to distract us from the far more dangerous dragon of deflation?
~ Mike Shedlock, Mish’s Global Economic Trend Analysis

We are to about see how much George Bush really believes the “supply side” mumbo-jumbo he’s been spouting for the last seven years.

WaMu accused of appraisal fraud

For those who think the banks were innocent bystanders and deserve to be bailed out:

http://money.cnn.com/2008/01/17/real_estate/wamu_lawsuit.moneymag/?postversion=2008011712

NEW YORK (Money) -- A former real estate appraiser for Washington Mutual is suing the bank, claiming she was blacklisted last year for providing a housing market forecast that was too gloomy.

Jeniffer Wertz, who is seeking unspecified damages, says WaMu stopped accepting her appraisals in mid-2007 a month after she reported that her local housing market in California was "declining."

SoCal Housing Articles

For the Kingman realtors that think Kingman houses will gain value and/or stay at the current values, perhaps they should check out the SoCal market. Many areas of Socal are already less expensive than Mohave County and have further to fall.

http://www.dailybulletin.com/ci_7981286
I.E. home sales tumble
By Michael Rappaport, Staff Writer
Article Created: 01/15/2008 06:57:15 PM PST

December usually isn't a bad month for home sales, but December 2007 was one for the books.

According to Tuesday's monthly report from DataQuick Information Systems of La Jolla, only 13,240 new and resale homes and condominiums were sold in Southern California last month, the worst December on record by a wide margin.

Nearly 24 percent fewer homes sold last month than in December 1990, the previous worst.

The median price of a home in Southern California has dropped from $490,000 to $425,000 in the last year, with every one of the six counties in the region down by more than 10 percent.

San Bernardino County's off 14.9percent to $315,000
*******

http://www.pe.com/business/local/stories/PE_News_Local_B_dataquick16.3537580.html

Region's housing market stays in 'midst of turbulence'
10:00 PM PST on Tuesday, January 15, 2008
By JACK KATZANEKThe Press-Enterprise

Home prices in Inland Southern California continued to fall in December, and sales numbers in Riverside and San Bernardino counties are down about 50 percent from where they were a year ago, DataQuick Information Systems reported.

The record highs were $432,000 in Riverside County and $380,000 in San Bernardino County, both set about a year ago. Five years ago, the median home in the Inland area sold for about $200,000.

And this statement from the article says it all:

Esmael Adibi, chief economist for Chapman University, said mortgage rates are looking favorable right now, but prices won't start to rebound until the buyers come back to the table. Right now, Adibi said, most are not earning enough money to qualify.

And that is the problem, prices got out of control everywhere and it wasn't a problem because no one was required to qualify for the loans. Now that banks are starting to act responsibly, prices will have to drop to a price that is affordable to buyers.