Comments on: Surprise Surprise Surprise — B of A Buys $2Bil of Countrywide

by: BawldGuy

Sat, 25 Aug 2007 17:50:18 +0000

Phil - First, may I add my wish to yours re: the Realtor population. If I hear one more agent pronounce it as real - I - tor I’m gonna be on the 11 o’clock news.

Last I checked with a couple of my contacts, the market was still buying even Countrywide’s good paper. Weeding out the bad guys won’t cause too much of a ripple, as I’m with you - good riddance.

The foreclosure auction results have been an encouraging sign to me. So far, the investors are getting shutout by the folks buying for the longer run. The sales prices are much higher than the sharks are willing to pay - by a long way.

I’m not sure I’m with you all the way though on the liquidity issue. With all the money printing going on it would surprise me if the problem of liquidity doesn’t show, (as it already has) strong signs of abating. Time will tell.

We’ve both been through this before, and realize one axiom which won’t be denied: Lenders lend.

by: Phil Hoover

Sat, 25 Aug 2007 15:39:26 +0000

I know people @ CW and hear some inside stuff.
The word is that they are going to full doc, conforming on everything.
They killed the 80/20s yesterday.
Fast & Easy is probably next.
CW could end up being the last lender standing.
B of A is obviously angling to acquire CW, and that would give Angelo his exit strategy after he sells more of his shares.
The bloodletting is still ahead of us with the major lenders NOT having set aside enuf loan loss reserves for the coming tsunami of ARM resets and foreclosures.
NO ONE knows how deep this is, not to mention where all of the flaky loans are buried in hedge funds, etc.
That uncertainty is why the credit markets are freaked ~ no one knows where the bodies are and the financial markets are afraid to buy ANY MBS paper ~ even the good stuff.
No buyers for loans = liquidity crisis.
I think this winter will kill off all of the little guys in lending and I can foresee a time when there will be a handful of major lenders remaining in the mortgage business.
Sure wish we could get rid of about half of the Realtors while we’re at it

by: Todd Tarson

Thu, 23 Aug 2007 20:21:11 +0000

Oh that old supply and demand thingy… I almost forgot.

Thanks for the response and I look forward to saying “beer me,” in September.

by: BawldGuy

Thu, 23 Aug 2007 16:30:17 +0000

Todd - Trust me, I’m not even a smidgen smarter than you.

I’m not sure I’d call it anywhere near a clear signal at this point. However, if Bernanke drops the Fed Funds rate, then repeats it once or twice, the psychological impact alone will spur the markets at least a little.

What the public is going to see, I think, is that there can be some bloodletting on the lender side without dire consequences to the housing market. Once they see this isn’t the Armageddon portrayed by the media, many of their fears will lessen.

Pay attention to the third week of September - possibly even sooner. If the Fed Funds rate is cut, you can celebrate a little - say with beer, not champagne. It will be a step in the right direction.

The real question? How long will it take to rid the market of all the pent up supply, when the underwriting has been turned back to 1998 or so? Even the best scenario will have us dealing with that central issue for awhile.

by: Todd Tarson

Thu, 23 Aug 2007 14:08:25 +0000

I’ve been following along here and the other articles you’ve linked to (Mr. Brady et al).

You all are a bit smarter than me, so let me ask you this…

Do you think this is some sort of clear positive signal for the housing market?? Even if only a small glint of good news.