patrick.net

It seems that conforming loan interest rates are going up. Perhaps the bailout is actually harmful to most homeowners/home-buyers in non-bubble areas?

This makes sense because the injection of toxic waste into a "protected" loan pool will only poison that pool. The financial market is not stupid.

Harm, your graphics are awesome!

Wow! I just noticed that. Excellent! Is that a NASA B52?

Definitely can happen, and from the recent links is happening. It is just being masked by packaging these loans to the federally guaranteed programs.

I was looking for the small cutout in the wing for the X15 tail fin to clear. Must be a different plane.

Could it be the X-43 mothership?

Oh crap, has the mothership arrived?

Perhaps Ben is Goldfinger reincarnated?

@Malcolm,

Thanks, but I cannot take credit for that --just a link to bullnotbull.com. Patrick suspended all custom graphics-uploading about 6 months ago due to spam issues.

Can I get a verification here? The emblem on B-52's hat looks like it belongs to Her Majesty's Royal Australian Navy?

That or a meter-maid from Toronto?

Phase 3? I'm predicting... June, July at the latest. My MB buddies are already telling me things are "loosening up" and that it's easier to get marginal buyers qualified. They'll have to work closely though w/ the PMI crowd so it doesn't look any more conflicted than it already is!

"Perhaps Ben is Goldfinger reincarnated?" LOL!

Let's see... tropical climate and leather bomber jacket coupled with that devil-may-care attitude? I'm thinking Tales of the Golden Monkey!

Obviously if Phase 3 happens, Phase 4 will follow. But I still have hope Phase 3 will not happen. After all, isn't their regulator (Lockard?) repeatedly on record that he wont stand for it? Now if he resigns.....Besides, if phase 3 is in the bag, why is BoA circulating that plan to bail them out with $750 billion? Its existence tells me nothings in the bag so they're exploring all options.

Maybe I'm just an idiot to think like this because on the other hand, if phase 3 isn't planned, what's the use of raising the limits?

Question: if GSE standards are loosened, it has to be only for existing loans right? I mean they can't possibly continue to provide ninja loans like it's 2005? So all it does is extract more money from current owners who will thus be given incentive to not walk away (inflation will eventually "catch them up " i.e. nominal values steady/flat for years). If that's the case sales will still stay very low right? And there's your silver lining: realtors are still screwed :-)

OT

Crazy times in which we live. Wapo today: Class actions close from mortgage holders against banks close to precedent.

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/26/AR2008022603351.html?hpid=sec-business

A federal appeals court is nearing a decision on a battle between Chevy Chase Bank and a Wisconsin couple that could for the first time enable homeowners across the country to band together in class-action lawsuits against mortgage firms and get their loans canceled.

Door Could Open To Class Actions.

The case is alarming Wall Street's biggest banks, which could bear the hefty cost of reimbursing all mortgage interest, closing costs and broker fees to groups of homeowners who uncover even minor mistakes in their loan documents.

After a federal judge in Milwaukee ruled last year that the Wisconsin couple had been deceived and other borrowers could join their suit, Chevy Chase Bank appealed to the circuit court in Chicago. Kevin Demet, the lawyer for the plaintiffs, said a decision by the appeals court is imminent, though others involved in the case said it could be a matter of weeks.

"It's one of the most important cases for the mortgage industry right now," said Louis Pizante, chief executive of Mavent, which provides consumer protection law services to major lenders. "The case was somewhat interesting a couple years ago when it started, but its ramifications and impact have completely changed given the current environment."

Dozens of class-action homeowner lawsuits have been filed in California and elsewhere against the nation's largest banks. The success of these claims could turn on the decision in the Chevy Chase case.

In its court filings, Chevy Chase said it would be "irreparably harmed" if the class-action lawsuits are allowed. About 7,000 borrowers have received loans from the bank similar to that of the Wisconsin plaintiffs.

"It's critical for the industry because if you allow class actions . . . in theory you could have thousands of people in a class and you could have enormous amounts of damages for the industry," said Thomas H. McCormick, vice president and general counsel for Chevy Chase.

The law states that even a minuscule violation by a lender can lead to a mortgage cancellation, or rescission. For example, if the annual percentage rate calculation is off by one-eighth of a percent between preliminary and final loan documents or if a monthly payment schedule does not conform precisely to federal guidelines, some borrowers could get a refund for all they have paid to live in their homes for years. They would have to pay back the entire amount of the loan, but they could then seek a new mortgage on better terms.

According to the inspector general for the Federal Deposit Insurance Corp., 83 percent of federally supervised banks that issued loans at the height of the housing boom in 2005 have been cited for "significant compliance violations."

OT

OMG, this is absolutely nuts. 28% personal property tax increase. This local tax hammer about to come down all over the country from these local gov's unable to cut back spending enough after the boom is going to be crushing.

From today's Wapo:

Prince William County Executive Craig S. Gerhart proposed yesterday a budget for the coming fiscal year that calls for a 28 percent increase in the property tax rate to cover a shortfall and to pay for public safety programs, including a crackdown on illegal immigration.

Unless you are planning to buy your next house with cash, you should wish that our mortgage industry remains largely intact.

OMG, this is absolutely nuts. 28% personal property tax increase. This local tax hammer about to come down all over the country from these local gov’s unable to cut back spending enough after the boom is going to be crushing.

This is why I actually agree in principle with anti-tax pioneers that brought us Prop 13.

The tax beast MUST be contained.