CDO's and Total Write Offs

S

ShoeshineBoy

I know there's lots of interest in the history and scope of the subprime crisis. Below is the best summary link that I've seen that describes the total amount of write offs and by whom, what is a CDO and how it works and some predictions about the future. And, in a non-sensational way, this author the deplorable lack of common sense that pervaded so much of financial America.

If you think the Fed is short-sighted, just wait 'til you read this:

http://money.cnn.com/magazines/fortune/fortune_archive/2007/11/26/101232838/
 
Quote from ShoeshineBoy:

Btw, the only big bank that I know of - I'm sure there are others - that escaped the CDO quagmire was Wells. However, it has been bitten by the downturn in mortgages.

http://www.forbes.com/home/markets/...er-markets-equity-cx_er_ml_1115markets37.html

Notice their largest shareholder: Warren Buffett. The Force must be with him...
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hmmmmm, i wonder exactly how they managed this

I have a no-doc 5% down, stated income, 30 yr fixed loan at 1.3 million dollars at 6.2% from wells fargo, and I didn't even apply with them, I applied at deutsche bank affiliated mortgage reseller and wells fargo was the final holder of my piece of paper


something is fishy here
 
Quote from Poole:

I have a no-doc 5% down, stated income, 30 yr fixed loan at 1.3 million dollars at 6.2% from wells fargo
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If the value of your house falls far below your loan amount, are you going to repay or foreclose?
 
Quote from Poole:

hmmmmm, i wonder exactly how they managed this

I have a no-doc 5% down, stated income, 30 yr fixed loan at 1.3 million dollars at 6.2% from wells fargo, and I didn't even apply with them, I applied at deutsche bank affiliated mortgage reseller and wells fargo was the final holder of my piece of paper


something is fishy here
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And, being an upstanding member of et with a large mortgage, you're probably not subprime. Your mortgage was not bundled in with the turds but with the Cuban cigars...
 
Quote from moo:

If the value of your house falls far below your loan amount, are you going to repay or foreclose?
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I actually know nothing about foreclosures so I don't even know how to answer that, I assume if you have assets and you just foreclose because you just don't want to pay, the bank can come after you anyways?

2nd problem is I put lot of cash into the house after I bought it, so if i walked away that would be a rather large loss (I probably own close to 50% of the current market price of the house, bank owns rest)

3rd problem is that so far housing prices in my area havent decreased at all, they are the same, probably higher than in summer 2005. Of course this could change, especially if something like this writers strike gets ugly, mortgage rates go up, etc etc, take your pick.

4th problem is moving is just a major pain, I hate it so much that I dont think im going to move again for like 20 years hopefully.
 
Quote from ShoeshineBoy:

And, being an upstanding member of et with a large mortgage, you're probably not subprime. Your mortgage was not bundled in with the turds but with the Cuban cigars...
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My credit score is over 800, so I'm pretty sure i didnt get bundled with subprime...., but my loan does say ALT-A on it

This is the first house i ever bought, and they took my word at what i earned, I didnt show them any tax returns or anything. Seems kinda risky, basing an entire loan for that amount on just a credit score I guess to a first time home buyer.

I think wells may be a very good trade when the bottom comes, just kinda nervous about what is going to come back and bite these banks in the butt and what isnt....
 
Quote from Poole:

My credit score is over 800, so I'm pretty sure i didnt get bundled with subprime...., but my loan does say ALT-A on it

This is the first house i ever bought, and they took my word at what i earned, I didnt show them any tax returns or anything. Seems kinda risky, basing an entire loan for that amount on just a credit score I guess to a first time home buyer.

I think wells may be a very good trade when the bottom comes, just kinda nervous about what is going to come back and bite these banks in the butt and what isnt....
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Interesting. I bought a house in October and I had to prove EVERYTHING. But then I wasn't getting a mil+ loan either...
 
Ok, thanks for the answer. Obviously you have enough equity to be able to weather even a 50% fall in value.

Quote from Poole:

I actually know nothing about foreclosures so I don't even know how to answer that, I assume if you have assets and you just foreclose because you just don't want to pay, the bank can come after you anyways?
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This was what I was wondering too. Is it possible, even in some states if not the whole of US, to foreclose on a home and still keep your other assets?
 
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