The President, Is A Dick
A Naybob of realty, not reality, passed this on to me... a letter from the NAR President Dick Gaylord...
Dear Fellow Realtors,
"I know you've all been waiting for some relief to our current market conditions,
and it arrived today: the new FHA and Fannie Mae- Freddie Mac conforming loan limits"
Today, this Naybob of realty passed this on... Re: Update! Loan Limit Numbers Released...LOOK AT THE INCEPTION DATE!
You can rewrap your first and seconds back into a decent first!!!!
After seeing the opening comment in the letter, and examining the press releases regarding the economic "stimulus" bill on the NAR web site,
I responded to my realtor fiend... You really don't get it. this isn't your savior, its your anti christ...
Yesterdays letter from Dick Gaylord and this announcement are nothing to cheer about.
If you've been reading me, since the economic "stimulus" bill was passed and these details were known,
the agency paper market has passed judgement and this is NOT good news.
Its already caused one jumbo lender to go BK, Thornburg Mortgage and UBS to fire sale its ALT-A portfolio to PIMCO at 70 cents on the dollar.
There will be many more casualties in the agency and non agency paper market implosion due to the falling value of FHLMC & FNMA agency paper...
I then viewed some videos at the NAR site, this President Gaylord sounds as clueless as Shrub Jr. and what he and his NAR followers don't know is
Bottom line: unlike the American public, and paid off Congress, which silently passed the higher loan limits as a bailout for the banks in the economic "stimulus" bill...
the Japanese, Chinese and others who hold the bulk of US agency paper are not stupid,
they know what higher loan limits mean, more risk, defaults, foreclosures and losses for FNMA & FHLMC
The rising risk inherent to these jumbo loans has exacted a premium, which will mean holders of agency paper will continue to sell,
which has caused a widening of spread between the 10 year treasury and 30 year agency mortgage bond... to 22 year highs
which begets further spread widening, leading to higher interest rates, less lending and further price declines.
As a result, conforming mortgage rates are going up, BofA rates went up 100 basis points or 1% yesterday alone...
Yo! Zippy the Pinhead, what kind of "relief" is this? More from NAR that brings the Scarecrow and the jingle "if I only had a brain" to mind...
NAR earlier this month estimated that "increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans.
and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated,
housing inventory would be reduced and home prices would be strengthened."
Here's what we estimate, there will be 1.5 million ARM loans reset this year.
if prices decline an additional 10% in 2008, the number of homeowners with no equity will rise to 11 million or 21%.
after PMI co's go BK, which isn't far off, each GSE jumbo foreclosure will net a $360K loss.
Multiply $360K by a million loans, you get $360 billion the taxpayer will eat.
it will be closer to 3X or $1.2 Trillion in combined GSE and bank losses as 30% of the 11 million underwater will default over the next three years.
The resulting defaults could drive both GSE's into bankruptcy in the largest institutional failure in history.
The dominoe effect on invested pensions, insurance co's, state and municipal governments that would claim BK as a result, staggers the mind.
And you don't think the banks are ready to dump on the GSE's? Hattip to Yves at Naked Capitalism from the FT...
in a move that is expected to reduce capital and credit exposure...
Citigroup plans on selling $45 billion of its $200 billion plus mortgage portfolio. By the third quarter of this year,
90% of new mortgages originated by Citigroup would either be securitised or sold to Fannie and Freddie...
Another related hattip to Yves... from Across the Curve...
FNMA and their auditor are at odds over the subject of writedowns... (just like Wells, WaMu and other fraudulent lenders are...)
Word has it that the auditors are going to resign, in any event, Fannie will soon announce the MOTHER of all write downs.... to date that is....
The Nattering One muses... The only safe havens since Sept are,
short the dollar on Fed rate cuts, buy gold and oil, short the GSE stocks...
and anything that has to do with banking, lending, finance or real estate.
Shhh, don't tell Gaylord or Shrub Jr or any of the NAR people.
Dear Fellow Realtors,
"I know you've all been waiting for some relief to our current market conditions,
and it arrived today: the new FHA and Fannie Mae- Freddie Mac conforming loan limits"
Today, this Naybob of realty passed this on... Re: Update! Loan Limit Numbers Released...LOOK AT THE INCEPTION DATE!
You can rewrap your first and seconds back into a decent first!!!!
After seeing the opening comment in the letter, and examining the press releases regarding the economic "stimulus" bill on the NAR web site,
I responded to my realtor fiend... You really don't get it. this isn't your savior, its your anti christ...
Yesterdays letter from Dick Gaylord and this announcement are nothing to cheer about.
If you've been reading me, since the economic "stimulus" bill was passed and these details were known,
the agency paper market has passed judgement and this is NOT good news.
Its already caused one jumbo lender to go BK, Thornburg Mortgage and UBS to fire sale its ALT-A portfolio to PIMCO at 70 cents on the dollar.
There will be many more casualties in the agency and non agency paper market implosion due to the falling value of FHLMC & FNMA agency paper...
I then viewed some videos at the NAR site, this President Gaylord sounds as clueless as Shrub Jr. and what he and his NAR followers don't know is
Bottom line: unlike the American public, and paid off Congress, which silently passed the higher loan limits as a bailout for the banks in the economic "stimulus" bill...
the Japanese, Chinese and others who hold the bulk of US agency paper are not stupid,
they know what higher loan limits mean, more risk, defaults, foreclosures and losses for FNMA & FHLMC
The rising risk inherent to these jumbo loans has exacted a premium, which will mean holders of agency paper will continue to sell,
which has caused a widening of spread between the 10 year treasury and 30 year agency mortgage bond... to 22 year highs
which begets further spread widening, leading to higher interest rates, less lending and further price declines.
As a result, conforming mortgage rates are going up, BofA rates went up 100 basis points or 1% yesterday alone...
Yo! Zippy the Pinhead, what kind of "relief" is this? More from NAR that brings the Scarecrow and the jingle "if I only had a brain" to mind...
NAR earlier this month estimated that "increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans.
and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated,
housing inventory would be reduced and home prices would be strengthened."
Here's what we estimate, there will be 1.5 million ARM loans reset this year.
if prices decline an additional 10% in 2008, the number of homeowners with no equity will rise to 11 million or 21%.
after PMI co's go BK, which isn't far off, each GSE jumbo foreclosure will net a $360K loss.
Multiply $360K by a million loans, you get $360 billion the taxpayer will eat.
it will be closer to 3X or $1.2 Trillion in combined GSE and bank losses as 30% of the 11 million underwater will default over the next three years.
The resulting defaults could drive both GSE's into bankruptcy in the largest institutional failure in history.
The dominoe effect on invested pensions, insurance co's, state and municipal governments that would claim BK as a result, staggers the mind.
And you don't think the banks are ready to dump on the GSE's? Hattip to Yves at Naked Capitalism from the FT...
in a move that is expected to reduce capital and credit exposure...
Citigroup plans on selling $45 billion of its $200 billion plus mortgage portfolio. By the third quarter of this year,
90% of new mortgages originated by Citigroup would either be securitised or sold to Fannie and Freddie...
Another related hattip to Yves... from Across the Curve...
FNMA and their auditor are at odds over the subject of writedowns... (just like Wells, WaMu and other fraudulent lenders are...)
Word has it that the auditors are going to resign, in any event, Fannie will soon announce the MOTHER of all write downs.... to date that is....
The Nattering One muses... The only safe havens since Sept are,
short the dollar on Fed rate cuts, buy gold and oil, short the GSE stocks...
and anything that has to do with banking, lending, finance or real estate.
Shhh, don't tell Gaylord or Shrub Jr or any of the NAR people.
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