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| User Info | Here It Comes... (Option ARMs) in forum [Ticker] | |||
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Genesis Posts: 71431 Incept: 2007-06-26 
KD^2 
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http://market-ticker.org/archives/1553-H....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-29 14:16:46
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Sunriser1 Posts: 1879 Incept: 2007-10-30 
lake tahoe nevada
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KD Is there anyway to know how many of these loans may have been refied or gone through foreclosure already? ---------- "CHAPTER 9"
2009-10-29 14:23:30
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Fugitivekind Posts: 613 Incept: 2007-08-20 
Boston
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Lots of good stuff here but this part is factually incorrect... "The typical OptionARM customer was qualified on the initial rate on the minimum payment, which was usually 2%, interest-only." I never saw anyone qualified on the minimum payment (most commonly 1% to 1.95% in the early to mid 2000's). Borrowers were qualified on the margin plus index (usually MTA or LIBOR). Commonly the margin for these products were in the mid to high 2's and MTA at the bottom was around 1.2%. ---------- "I refuse to leave our children with a debt they cannot repay, and that means taking responsibility right now, in this administration, for getting our spending under control." Barack Obama, Feb. 29, 2009
2009-10-29 14:25:08
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Future_shock Posts: 1141 Incept: 2007-10-16
Texas
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I know several folks who are still gainfully employed, refinanced, and cut lots of their discretionary expenditures to the bone to stay in the house. Now they want to sell their house and be done with it because it's a weight around their lifestyle. So I imagine a ton of folks refinanced out of ARMS, with a higher monthly payment, but not the knockout punch that staying with an option ARM reset would have been. After 6 months of what they consider draconian cuts to their lifestyle they just want to sell their house and rent.
2009-10-29 14:33:13
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Phev Posts: 116 Incept: 2009-05-17
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I have the number (ARM balance for each bank) : I will give you a link later, i am busy now... ;-) If you have time you can find the information before I give it to you, it is deep included in all data provided by the FDIC (SDI - download)... As an aperitizer ;-) Subprimes Code: 2007 décembre 2008 janvier février avril juin juillet août septembre octobre novembre décembre 2009 janvier février mars avril mai juin août Percent of Loans with a Current Payment 61,96% 61,70% 62,00% 61,40% 59,50% 58,30% 57,30% 55,50% 54,80% 54,30% 51,8% 51,5% 51,4% 51,8% 52,8% 52,2% 51,3% 50,40% Percent of Loans with a Payment 30-59 Days Past Due 10,93% 10,30% 9,50% 9,50% 9,70% 10,00% 10,20% 11,00 10,80% 10,70% 11,5% 11,0% 10,5% 10,1% 9,3% 9,6% 9,9% 9,80% Percent of Loans with a Payment 60-89 Days Past Due 5,50% 5,30% 4,80% 4,80% 5,00% 5,10% 5,30% 5,60% 5,80% 5,80% 6,4% 6,4% 6,0% 5,6% 5,4% 5,2% 5,4% 5,50% Percent of Loans with a Payment 90+ Days Past Due 8,25% 8,50% 8,60% 8,70% 9,00% 9,20% 9,70% 9,90% 10,40% 11,00% 12,3% 13,0% 13,6% 14,1% 14,2% 14,7% 15,1% 16,50% Percent of Loans in Foreclosure 8,64% 9,00% 9,60% 9,80% 10,40% 10,70% 10,70% 11,00% 11,10% 11,30% 11,2% 11,4% 11,8% 12,1% 12,6% 13,0% 13,4% 13,50% Percent of Loans in REO 4,72% 5,10% 5,50% 5,70% 6,40% 6,60% 6,90% 7,10% 7,10% 7,00% 6,8% 6,7% 6,6% 6,3% 5,8% 5,3% 4,9% 4,30% Alt A Code: 2007 décembre 2008 janvier février avril juin juillet août septembre octobre novembre décembre 2009 janvier février mars avril mai juin août Percent of Loans with a Current Payment 87,01% 86,00% 85,30% 84,80% 82,80% 81,60% 80,70% 79,20% 78,20% 77,00% 74,7% 73,6% 72,4% 71,2% 71,1% 70,4% 69,5% 68,5% Percent of Loans with a Payment 30-59 Days Past Due 4,46% 4,40% 4,40% 4,10% 4,20% 4,50% 4,60% 5,10% 5,00% 5,20% 6,0% 5,7% 5,6% 5,6% 4,8% 4,9% 5,1% 4,9% Percent of Loans with a Payment 60-89 Days Past Due 1,98% 2,10% 2,00% 2,10% 2,20% 2,20% 2,30% 2,50% 2,60% 2,70% 3,2% 3,4% 3,4% 3,3% 3,2% 3,0% 3,0% 2,9% Percent of Loans with a Payment 90+ Days Past Due 2,35% 2,60% 2,80% 3,00% 3,40% 3,70% 4,00% 4,30% 4,80% 5,40% 6,1% 6,7% 7,4% 8,0% 8,2% 8,7% 9,1% 9,6% Percent of Loans in Foreclosure 2,88% 3,30% 3,80% 4,10% 4,90% 5,20% 5,60% 5,80% 6,00% 6,30% 6,7% 7,2% 7,7% 8,3% 9,3% 9,8% 10,3% 10,8% Percent of Loans in REO 1,33% 1,60% 1,80% 1,90% 2,50% 2,70% 2,90% 3,20% 3,30% 3,30% 3,4% 3,4% 3,5% 3,6% 3,4% 3,2% 3,2% 3,2% Regards
2009-10-29 14:47:49
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Phev Posts: 116 Incept: 2009-05-17
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I don't know if you saw that link I gave before : deliquancy at US bank 6/30/2009 (it is a xls file to download) you will find total asset, +30 days, + 90 days deliquancy according bank statement dated 06/30/2009... The funny thing it doesn't match with the FED (deliquancy and charge off)... These figure are well under FED's one... http://dl.free.fr/uum9EV8pY
2009-10-29 15:01:35
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Arkady Posts: 123 Incept: 2009-10-19
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So who is actually eating the loss for these worthless notes? If this thing was issued for 500k and the house is now worth 300k there is a 200k difference. So the original buyer has defaulted, possibly credit ruined, done. Now, this loan has been securitized I take it by the originator and sold? Since the original buyer has already defaulted the value of whatever this note represented is gone - but who is taking the loss? Who owns this now?
2009-10-29 15:08:14
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Videopro Posts: 882 Incept: 2007-08-03 L.A. Area
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Quote:Either way you slice these losses have not been recognized or accounted for nor has their impact on home inventory and price. Quote:So I imagine a ton of folks refinanced out of ARMS, with a higher monthly payment, but not the knockout punch that staying with an option ARM reset would have been. After 6 months of what they consider draconian cuts to their lifestyle they just want to sell their house and rent. And, all things being equal, it leaves behind walking dead neighborhoods, turning into slums decades before they would have otherwise (video) ---------- ---------- "The Spinning Cyclone Of Deflation Is Fueled By Deficit Spending. An efficient asset destroying storm powered by the printing press". - Me
2009-10-29 15:14:45
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Stx_jay Posts: 958 Incept: 2008-04-06
St Croix, USVI
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Lest we forget: option arms were often "stated doc" as well. In other words, they are rife with fraud. And to add insult to injury, they are also typically concentrated in bubble areas. As KD has alluded to before, these Alt-A securitizations that are mainly comprised of option arms, have to be killing the cash positions of those servicing them. The servicer has to cover P&I on a pool that has 50% delinquencies? Yowza! Two names come to mind that must be getting kicked in the nuts as servicers of option arm pools: Wells and BAC. I'll bet you couldn't give away the MSRs for these skanky O.A. securitzations. ---------- Let's sing along to the old AC/DC song, shall we? Cos I'm / TNX / I'm Dynamite / TNX / And I'll win the fight / TNX / I'm a power-load / TNX / Watch me explode
2009-10-29 15:34:07
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Guyfawkes Posts: 352 Incept: 2008-09-19 Texas
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Karl in the Ticker wrote..In the "best case" this is another $50 billion in losses and about 25% of the homes purchased in bubble areas from 2003-2006. In the "worst case" this is well over another $100 billion in losses and perhaps as much as half of the homes purchased in those areas during the bubble years. Ugh. Just ugh. ---------- It's still "We, the People".....right? Last modified:
2009-10-29 15:45:18 by guyfawkes
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Tesla Posts: 8174 Incept: 2008-04-03
Delaware
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Is there data available anywhere that breaks out the nominal value of Alt-A/Option ARMs by state ?
---------- "Neither the wisest Constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt." Samuel Adams I'd rather die on my feet than live on my knees. - Emiliano Zapata
2009-10-29 15:48:15
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Hihoherewego Posts: 595 Incept: 2009-02-25
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It's spreading to other states now not just the West coast. And it's spreading fast. http://www.dailyfinance.com/2009/10/28/h.... ................................... The best proof that there is truly higher forms of intelligent life in the universe is that it has stayed away from us. Or at least they haven't officially admitted as such.
2009-10-29 16:16:15
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S7rep Posts: 1177 Incept: 2007-08-29
Southwest, FL
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Lots of these loans are starting to go in to foreclosure in my area. Beware of falling pianos!!
2009-10-29 16:46:07
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Mcmwest Posts: 34 Incept: 2009-04-06 Western Kansas
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Just another ticking bomb in the system. Just like a terrorist attack I'm betting they all go boom about the same time.
2009-10-29 17:21:34
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Chainlink Posts: 521 Incept: 2008-10-26
Florida and Michigan
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I'm myopic about South Florida, I think the whole country resembles this disaster in housing even though I know other places are in better shape, but for the hundredth time here I go: I've been driving through a new area, with almost 1 in 5 new houses foreclosed on miles of remote, rural road, lot sizes all 1.25 acres. This cements my opinion of ZERO worth on probably 30% of all outstanding residential morgages made in the last 5 years in Palm Beach County. The demographic of folks buying out here is a little different in urban areas; on top of just being able to fog a mirror, they had to make other commitments just to live way out here. So seeing this demographic decimated speaks more of job loss or Schedule C income reductions, than the suburban areas going under. 1) There isn't enough population to even FILL these dwellings. Even if cash buyers bought these all up pennies on the dollar, it will take YEARS, if ever again, to fill them with solvent renters. 2) Even though it's well and septic tank in these places, thousands of acres of more urban empty houses/condos still need city services. Not enough county money left to push this water and sewage around with defaulting tax payers. 3) Electric during the summer can be $250 for a conservative user in a small place...even if you GAVE folks these houses mortgage free, the income to provide utilities, transportation to jobs in the city, and even food is dwindling in this economy. How in the hell will these people pay $450 per month for electric 6 months of the year on depression wages? The only thing surprising about 50% delinquent on Option Arms is that it took so long. Last modified:
2009-10-29 17:34:55 by chainlink
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Gibbie Posts: 672 Incept: 2009-01-18
Amerika
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50%??? 
---------- "There is no subtler, no surer means of overturning the existing basis of society that to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction. And it does it in a manner which no man in a million is able to diagnose." -John M Keynes. WOULD YOU KINDLY!
2009-10-29 18:03:09
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Markytom Posts: 217 Incept: 2009-02-19
Online
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Here's some scary graphs: http://www.economicpopulist.org/content/.... Last modified:
2009-10-29 18:09:24 by markytom
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Phev Posts: 116 Incept: 2009-05-17
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Adjustable rate loans secured by 1-4 family residential (memoranda) JPMorgan Chase Bank, National Association 101614000000.00 Bank of America, National Association 81608146000.00 Citibank, National Association 68883000000.00 Wachovia Bank, National Association 40050000000.00 SunTrust Bank 30422749000.00 U.S. Bank National Association 15068368000.00 Wells Fargo Bank South Central, National Association 14265000000.00 Union Bank of California, National Association 13805813000.00 Wells Fargo Bank, National Association 10577000000.00 JPMorgan Bank and Trust Company, National Association 9587299000.00 Bank of America, Rhode Island, National Association 8375776000.00 HSBC Bank USA, National Association 8372924000.00 GMAC Bank 7627258000.00 National City Bank 7571637000.00 Branch Banking and Trust Company 7197906000.00 Regions Bank 6652936000.00 Bank of America California, National Association 6633950000.00 M&I Marshall and Ilsley Bank 4436855000.00 Capital One, National Association 4065209000.00 Northern Trust, National Association 3673769000.00 Harris National Association 3616966000.00 Compass Bank 3275673000.00 PNC Bank, National Association 3140205000.00 Merrill Lynch Bank USA 3125034000.00 RBS Citizens, National Association 3028435000.00 Bank of America Oregon, National Association 2797980000.00 Fifth Third Bank 2754548000.00 The Huntington National Bank 2521410000.00 Deutsche Bank Trust Company Americas 2321000000.00 Associated Bank, National Association 2255895000.00 The Bank of New York 2227000000.00 Investors Savings Bank 2050119000.00 RBC Bank (USA) 1793718000.00 The Northern Trust Company 1778426000.00 City National Bank 1727459000.00 NewAlliance Bank 1584998000.00 Emigrant Bank 1567343000.00 Bank of the West 1165081000.00 Colonial Bank 1146828000.00 TD Bank, National Association 1075902000.00 Manufacturers and Traders Trust Company 1017065000.00 For those which are more of 1 Billion (ARM + option ARM)...
2009-10-29 18:38:32
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Friar_tuck Posts: 660 Incept: 2008-01-09 N. Cal
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Not to mention the fact that banks booked profits on Option Arms as if the fully amortized payment was being made..
2009-10-29 20:30:43
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Financeguy Posts: 4946 Incept: 2007-08-10
Charlotte Online
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The reset will never be a big issue IMO. Most of these are in areas where home prices have depreciated severely. Anybody who has one of these things had to look at refinancing in the last several months. Those that could refinance or work something out did. Those that can't probably have just quit paying as they know they cannot afford the reset and why would you pay on a house you are probably several hundred thousand underwater? These things aren't conservative folks out in Iowa- they are folks that tried to generally buy as much house as they could afford in higher cost areas. That is why I think you have 50% delinquency. The Fall is also a time of recognition as prices in most of these middle to upper priced neighborhoods continued to fall this summer. I think alot of folks were hoping for a miracle that never came. Next Spring is going to be bad as the affordability mortgage foreclosures may start coming to the market along with all the others who simply are not going to hold out much longer. I think we are going to have a massive occurrence of default and strategic defaults. Hell I think even Moody's is starting to figure this out and are going to again downgrade all of this paper.....Wells Fargo, Chase and BofA go boom! ---------- "Granted, if you are not into Barbara Streisand and creme brulee, South Beach could be a tad lonely." Eleua Last modified:
2009-10-29 21:31:22 by financeguy
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Sqmo Posts: 387 Incept: 2009-09-14
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I talked to a friend in banking and here is the deal with securitization. When a stated income loan goes bad, the tax returns get pulled. When they find out (surprise surprise) that they don't agree with the stated income on the loan then that means fraud on the part of the borrower. Once the loan is fraudulent the bank is required to buy it back from the MBS or other investor. So in this case you have banks being haunted by bad loans no longer on the balance sheet. In many cases the loans were made and sold off before one bank was acquired by another. Now the new bank has to deal with the crap they knew nothing about from banks they acquired. In other cases there are multiple bank acquisitions.
2009-10-30 00:34:19
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Laura Posts: 3153 Incept: 2008-05-05
Florida Space Coast
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oh goodness do they run each transaction through the chain of sales to unwind it then? who takes the loss? the first seller or the last seller?
---------- Karl's just a shill for Big Math. 1LumpSum Honey, where's the AK ? Tyler Durden My Ford focus can get me from point A to point B just as good Tigger's Cadillac. And my back door window is not broken. Mliu
2009-10-30 01:00:54
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Sqmo Posts: 387 Incept: 2009-09-14
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It is the first seller. Often that is a bank that was bought out a long time ago by another that bought out another. So yes they have to get out the lawyers and figure out where it came from.
2009-10-30 01:16:43
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Padrino Posts: 2207 Incept: 2008-01-16
Prison
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Quote:Hell I think even Moody's is starting to figure this out and are going to again downgrade all of this paper.....Wells Fargo, Chase and BofA go boom! Chief Economist and Cofounder of Moody’s Economy.com Before the Joint Economic Committee The Impact of the Recovery Act on Economic Growth October 29, 2009 The Great Recession has finally come to an end....... http://jec.senate.gov/index.cfm?FuseActi.... ---------- "Every man is the architect of his own fortune."
2009-10-30 05:01:54
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Genesis Posts: 71431 Incept: 2007-06-26
KD^2
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Quote:I talked to a friend in banking and here is the deal with securitization.  Gee, http://market-ticker.org/archives/396-Ma.... ---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2009-10-30 07:19:41
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