Comments on: Morgan Stanley: More Irresponsible Mortgage Lending, Please

By: Refi Madness: The Heat is Frying your Brain (Redux) | The Big Picture

Refi Madness: The Heat is Frying your Brain (Redux) | The Big Picture — Mon, 09 Aug 2010 23:05:05 +0000

[...] Morgan Stanley: More Irresponsible Mortgage Lending, Please (July 28, 2010) PERMALINK Category: Credit, Real Estate, Really, really bad calls, [...]

By: Economic “Do Not Fly” List | The Big Picture

Economic “Do Not Fly” List | The Big Picture — Mon, 09 Aug 2010 14:57:04 +0000

[...] a few specific examples of what they described as “frickin’ crazy”: -A major Wire House (and TARP recipient) suggestion we abandon loan to value standards to allow more refinancings of homes likely to default as [...]

By: A New “Slam Dunk” you can rely on. Too simple for Politics. | Hypocrisy Reigns Supreme

Mon, 09 Aug 2010 14:14:27 +0000

[...] Actually to paraphrase his non rebuttal “Actually, I think it will work out just fine”. Check out the comments here. Who thinks these guys and gals even understand the [...]

By: DeDude

DeDude — Fri, 30 Jul 2010 14:40:07 +0000

Tom Lawler has a good take down on this proposal over on calculated risk

http://www.calculatedriskblog.com/2010/07/slam-dunk-stimulus-ms-missing-something.html

It turns out that HAMP is already kind of sort of doing something like this. Closing cost will eat a big chunk of money reducing the actual savings, and F&F themselves not just guarantee but also own some of those older more expensive mortgages so they would be the ones to lose income.

By: robertso2020

robertso2020 — Thu, 29 Jul 2010 16:47:34 +0000

correction to the 4.5% Agency bond…it would be 4%.

By: robertso2020

robertso2020 — Thu, 29 Jul 2010 16:43:58 +0000

FNM/FRE have approx. $5T loan portfolio. The Fed already owns $1.25T of the loans. Somehow the Govt would have to come up with $3.75T (assuming everybody does the refi which would be unlikely). How would the Govt do this? Issue more debt? The typical MBS investor would not touch an agency bond at 4.5% if they couldn’t do prepayment analysis…so the private market would not be an option. Plus, a new homebuyer would be subsidizing an old home buyer in the form of higher mortgage rates…unless we completely nationalize the mortgage market (which could happen). If that’s the case then the taxpayer would take on 100% credit risk of every conforming mortgage loan ever written…past and future.

Oh and the Fed’s plan to sell their MBS holdings in this lifetime…put that on hold for the Apocalypse.

Does David Greenlaw have any idea what he is talking about? He just had his Wizard of Oz moment. Would love to know his salary.

By: dhan

dhan — Thu, 29 Jul 2010 09:57:46 +0000

*FUME*. These supposed experts make me mad when they propose idiotic schemes to advantage of people’s ignorance. Debt reduction should be the top priority for most debt-laden households. Stimulating a market segment in this manner just postpones the inevitable pain.

By: oc bear

oc bear — Thu, 29 Jul 2010 07:18:24 +0000

can this be true?

http://www.zerohedge.com/article/new-spin-bank-fraud-banks-defrauding-their-invesors-auditors-and-regulators-which-also-helps

By: Carse

Carse — Thu, 29 Jul 2010 02:38:00 +0000

Since people want to speculate on property values then we ought to make it possible to speculate on longs and shorts, and discard the fixed value mortgages theory on property, it’s obviously not working out.

By: jeff in indy

jeff in indy — Thu, 29 Jul 2010 01:54:01 +0000

to put the total blame on the person that originated the loan is a bit of a fallacy. short of fraud, the originator can only sell what’s available in their toolbox. which, around 90%+ of the time meant a F&F automated underwriten loan. hell, in the “peak” years i had AU results come back approve/eligible at 85% debt-to-income ratio on 85% ltv’s NOT requiring income to be documented with pmi accepting the AU results for pmi.