$8.5 billion in US REO's? No Way
From MICA March 08 $848 billion in PMI is in force... primary risk in force $193 billion.
of which in the case of MGIC, 60% of the primary risk in force is 95% LTV or greater.
FHLMC Dec 31st mortgage insurer counterparty risk exposure $298 billion; FHLMC exposure $56 billion.
Page 38: FNMA counterparty exposure Dec 31st = $272 billion of which FNMA exposure = $111 billion
From Bloomberg...
Together, Fannie Mae and Freddie Mac, the two biggest U.S. mortgage finance companies,
owned a record $6.9 billion of foreclosed homes on March 31,
compared with $8.56 billion held by all 8,500 U.S. commercial banks and savings and loans.
The Nattering One muses... something dear to our heart that we have been tracking...
Wells Fargo REO's in California:
09/05/07 3800;
11/12/07 5380; +41%
12/28/07 5820; +10%
01/30/08 6560; +12%; since 09/05 +73%
today, after $12 billion in non performing loans were put into a special "liquidating" portfolio...
Wells is back to 11/07 levels, 5359 properties.
Market peak median sales price $484K x 5359 = $2.59 billion in non performing California TD exposure.
Further, lets be very generous and postulate that these properties did not sell at peak, but at 20% below peak
$2.59 billion x .80% = $2.072 billion exposure
And if every single property had 20% down payment, which we know is NOT the case...
$2.072 billion x .80% = $1.6576 billion exposure
Gentle reminder: This is a CONSERVATIVE estimate of the REO exposure in California ALONE for WELLS FARGO ALONE.
Begging the question: Where o where did the puny number $8.56 billion for ALL 8500 lenders in ALL of the US come from?
Begging the question: Are these lenders counting their total loan exposure or just counting the amount not covered by PMI?
...and The Economist runs down the Fannie & Freddie debacle in an excellent primer: End of Illusions.
of which in the case of MGIC, 60% of the primary risk in force is 95% LTV or greater.
FHLMC Dec 31st mortgage insurer counterparty risk exposure $298 billion; FHLMC exposure $56 billion.
Page 38: FNMA counterparty exposure Dec 31st = $272 billion of which FNMA exposure = $111 billion
From Bloomberg...
Together, Fannie Mae and Freddie Mac, the two biggest U.S. mortgage finance companies,
owned a record $6.9 billion of foreclosed homes on March 31,
compared with $8.56 billion held by all 8,500 U.S. commercial banks and savings and loans.
The Nattering One muses... something dear to our heart that we have been tracking...
Wells Fargo REO's in California:
09/05/07 3800;
11/12/07 5380; +41%
12/28/07 5820; +10%
01/30/08 6560; +12%; since 09/05 +73%
today, after $12 billion in non performing loans were put into a special "liquidating" portfolio...
Wells is back to 11/07 levels, 5359 properties.
Market peak median sales price $484K x 5359 = $2.59 billion in non performing California TD exposure.
Further, lets be very generous and postulate that these properties did not sell at peak, but at 20% below peak
$2.59 billion x .80% = $2.072 billion exposure
And if every single property had 20% down payment, which we know is NOT the case...
$2.072 billion x .80% = $1.6576 billion exposure
Gentle reminder: This is a CONSERVATIVE estimate of the REO exposure in California ALONE for WELLS FARGO ALONE.
Begging the question: Where o where did the puny number $8.56 billion for ALL 8500 lenders in ALL of the US come from?
Begging the question: Are these lenders counting their total loan exposure or just counting the amount not covered by PMI?
...and The Economist runs down the Fannie & Freddie debacle in an excellent primer: End of Illusions.
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