Comments on: How WaMu failed http://blogs.reuters.com/felix-salmon/2009/12/03/how-wamu-failed/ A slice of lime in the soda Mon, 20 May 2013 18:30:15 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: GotDOCG http://blogs.reuters.com/felix-salmon/2009/12/03/how-wamu-failed/comment-page-1/#comment-9633 GotDOCG Sun, 06 Dec 2009 02:08:36 +0000 http://blogs.reuters.com/felix-salmon/2009/12/03/how-wamu-failed/#comment-9633 The underlying cause may very well be that the entire real estate loan portfolio of QaMU (as well as Wachovia and Downey) is comprosed of Option ARM's... in a normal market a decent loan produvt... however, due to the REFUSAL of the lenders, Fed, Treasury and Congress to really understand and deal with the cause of this crisis (1-4 unit residentail real estate)the free fall in real estate values make these loan virtually impossible to refinance... a huge proportion of the loans were made to self-employed borrowers... who due to underwriting guidelines, are now virtually excluded from obtaining any form of financing... The fact that there is no real loan modification program in place the several million Option ARM's will in place wil now guaranty a new wave of foreclosures... 3-5 year more of this to follow!!! At present the modification procedure takes upwards of 9 months to cokplete; and demands that the homeowner first become delinquesnt; thereby making a mess of their credit... try buying that new GM car with a 520 credit score!! The programs now in place, HAMP included, are akin to going to the hospital with a heart attack, and being treated for an ingrown toenail!! Curently, there are upwards of 7 million problem loans... and Mr. Geithner is boasting about aiding some 400,000 homeowners Onlt government can fail and call it a win! The underlying cause may very well be that the entire real estate loan portfolio of QaMU (as well as Wachovia and Downey) is comprosed of Option ARM’s… in a normal market a decent loan produvt… however, due to the REFUSAL of the lenders, Fed, Treasury and Congress to really understand and deal with the cause of this crisis (1-4 unit residentail real estate)the free fall in real estate values make these loan virtually impossible to refinance… a huge proportion of the loans were made to self-employed borrowers… who due to underwriting guidelines, are now virtually excluded from obtaining any form of financing…

The fact that there is no real loan modification program in place the several million Option ARM’s will in place wil now guaranty a new wave of foreclosures… 3-5 year more of this to follow!!!

At present the modification procedure takes upwards of 9 months to cokplete; and demands that the homeowner first become delinquesnt; thereby making a mess of their credit… try buying that new GM car with a 520 credit score!! The programs now in place, HAMP included, are akin to going to the hospital with a heart attack, and being treated for an ingrown toenail!! Curently, there are upwards of 7 million problem loans… and Mr. Geithner is boasting about aiding some 400,000 homeowners
Onlt government can fail and call it a win!

]]> By: Neil D http://blogs.reuters.com/felix-salmon/2009/12/03/how-wamu-failed/comment-page-1/#comment-9595 Neil D Thu, 03 Dec 2009 20:06:07 +0000 http://blogs.reuters.com/felix-salmon/2009/12/03/how-wamu-failed/#comment-9595 Calculated Risk blog linked to an article from Cleveland about how the parent company of a bank took its deposits out before the FDIC could swoop in. This part was great:"If the bank is seized and the deposits are in the bank, it puts the parent company in a position of having to fight with regulators to get its [own] deposits back," Davis said. Customers and regulators might be angered by the strategy, Davis added, but said: "There's nothing illegal about. It's business. It's moving to protect assets."http://www.cleveland.com/business/index.ssf/2009/12/amtrusts_bankruptcy_filing_may.htmlAnd people should feel guilty about walking away from a mortgage? No, "It's business."CR link: http://www.calculatedriskblog.com/2009/12/amtrust-lawyers-discuss-bank-seizure.html Calculated Risk blog linked to an article from Cleveland about how the parent company of a bank took its deposits out before the FDIC could swoop in. This part was great:”If the bank is seized and the deposits are in the bank, it puts the parent company in a position of having to fight with regulators to get its [own] deposits back,” Davis said. Customers and regulators might be angered by the strategy, Davis added, but said: “There’s nothing illegal about. It’s business. It’s moving to protect assets.”http://www.cleveland.com/busines s/index.ssf/2009/12/amtrusts_bankruptcy_ filing_may.htmlAnd people should feel guilty about walking away from a mortgage? No, “It’s business.”CR link: http://www.calculatedriskblog.com/2009/1 2/amtrust-lawyers-discuss-bank-seizure.h tml

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