patrick.net

First post in the thread - sweet!

Our last home mortgage was with Wells Fargo (we sold about 6 months ago). We found them to be responsible and fair. Entering the subprime market at this time is a sign of desperation, especially coming from a venerable institution like WF. It makes me wonder what kind of problems their mortgage lending division are having.

You know, I wonder how this will affect the company stock... it's been consistenly outperforming other banks the last several years. I wonder if Kovacevich knows what he's doing? I have to guess that he does. I should not feel sorry for those poor souls who take out NAAVLPs, but I will feel bad if/when WF stock goes down after WF takes losses for all those forclosures in 2007-10.

We all have had a lot of fun at FB's expense but WFC entering this arena only soldifies in my mind that FB's are "made" not born! The bank (which leans heavily on their credibility) takes folks that would have never considered a neg. am. and all of a sudden they signing doc's. FICO scores are going down directly proportional with DTI's going up! Hmm?

We can kid around about the 85,000 homeowners in CA that are now in pre-foreclosure but how many of them would still be in their modest but comfortable (and affordable) home and NOT "up-graded" to a place more fitting a person of their stature had it not been for that "nice young man at the bank" that hooked them up with a loan from hell?

Wells involvement only legitimizes the "K-Y Loan".

To me a good business should be able to halt certain operations if they are deemed unsuitable. It is pointless to squeeze profits when the environment is unfavorable.

Too bad WF has the curse of being a public company.

Wells Fargo has opened a TON of home mortgage offices recently, and invested a chunk of change into this segment. There's a HUGE office in our building, and half of it is for WF Home Mortgages. I'd say they probably invested way too much in it and now need to find ways of having it pay off. Otherwise, they're going to have to do some serious downsizing in that segment.

FYI: email I just sent to CAR.org (California Association of Realt-whores):

"Hey guys,

I noticed that you haven't updated your Housing Affordability Index (HAI) numbers since last December. I was just wondering, could that be because they're trending so low? Even lower than December's record-low 14% (lowest since 1989)?

Oh, wait, I forgot. Leslie Appleton-Young already told the news media that the reason you stopped publishing the number was "because the monthly index did not seem to track closely to reality" and that you "were going to tweak the model to more reflect current market conditions".

Absolutely --I think this is a fabulous idea! Whenever those nasty numbers tell us what we don't want to hear, let's jigger with them until they give us the "right" answer! From now on, housing "affordability" should be based upon the nastiest, most toxic loans that sub-prime lenders can cook up. Something like a $0-down, stated-income, 50-year, negatively amortizing suicide loan.

Hey, why not? These New Paradigm loans can't be considered unusually risky because "it never goes down", right?? LOL"