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This sizeable wholesale bank will result in an estimated $1.3B hit to the FDIC “insurance fund.” It is considered the largest failure since Downey Savings & Loan. Silverton served over 1,400 banks nationwide with wholesale services.
Phoenix: April Phoenix Home Sales Reach Boom Time Levels
“Speculators and prospective home owners came out in droves to buy homes in the Phoenix area. M did an early check of the sales numbers, and heres the unofficial sales for April”
“The answer is: there has been much improvement across the board, but especially for 5-1 ARMs. In addition, those in ARMs tied to the Cost of Funds Index (COFI), will be pleased to note that on April 30, the COFI sank to an all time low.”
While this piece does mention the Pay Option ARM timebomb still ticking as before, it is a bit optimistic to say the “ARM problem has largely gone away” with respect to more “conventional” sorts of ARMs. One problem is that: just because rates are low now, doesn’t mean they will stay low for long. In fact, we KNOW rates are only this low because of quantitative easing activities. However, that perpetual motion machine can only stay humming for so long, and when it peters out, we are sure to see a “take back” of the previous low rates.
Second, it is a big “if” whether most ARM holders can refinance into fixed loans that don’t have a higher monthly payment than they were paying before. A good chunk of them were in I/O loans for “affordability” reasons, and simply cannot afford fully-amortizing payments on homes at the kinds of prices they bought. Since prices have come down considerably (especially in bubble regions), it will be hard to re-fi into 30-year-fixeds, even through Fannie/Freddie .
Ultimately, it is prices, not rates, that are the true problem. And thus the real, primary solution should be to let prices come down, not attempt to subsidize rates.
aig may wind down mortgage insurance unit
“Troubled insurance giant AIG may wind down its mortgage insurance unit United Guaranty after failing to turn the company around, according to a Bloomberg report.”
Depression Scares Are Hardly New
WHAT is the chance that the current downturn will morph into another Great Depression? That question has been preoccupying people for months.
The popular mood has a huge impact on the economy, so its worth noting what many people seem to forget: Depression scares come and go. And by one authoritative measure, the current outbreak of concern has been surprisingly mild.
Why are Banks Setting the Opening Auction Bid Below The Principal Balance?
“I attended a foreclosure auction in Bellevue, WA last week to discover if the rumor was true that banks are opening their bids below the amount owed. I received confirmation from three professional investors that yes, the banks have been doing that, its no secret, and there seems to be no discernable pattern. Its not one particular bank or lender, its not particular types of property or in any specific area. It appears to be random.”
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