BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Loans: There is more capital than courage -- or good sense]]>http://www.bloggingstocks.com/2008/12/18/loans-there-is-more-capital-than-courage-or-good-sense/http://www.bloggingstocks.com/2008/12/18/loans-there-is-more-capital-than-courage-or-good-sense/http://www.bloggingstocks.com/2008/12/18/loans-there-is-more-capital-than-courage-or-good-sense/#commentsFiled under: , , , , , ,

The banks are still not lending and I hear every excuse in the book. I accept the fact that lending practices are much more restrictive than they have been in the recent past. I also understand that banks are trying to conserve capital against volatile and unpredictable market gyrations. However, the pendulum has swung too far to the conservative side.

Here is a recent example from a deal I was able to get done but it took three times as long as it should have. First the appraisal by my estimation was 10% to 15% low -- no one is sticking their neck out. I know this because I am seeing weekly transactions in the neighborhood. Then the maximum loan to value has gone from the ridiculous 100%, which no sane person should have done, to 70%, the bank in this case Wells Fargo & Company (NYSE: WFC), said it was because it wanted to maintain its AAA rating.

Another bit of pain. After I had everything in place, in the case of a home loan, subordination became an issue! Things are so specialized and compartmentalized that the lender has different underwriters and standards for its First Trust Deeds and its Home Equity loans and since I had both, the HELOC (a form of second mortgage) had to be subordinated to the First.

Continue reading Loans: There is more capital than courage -- or good sense

Loans: There is more capital than courage -- or good sense originally appeared on BloggingStocks on Thu, 18 Dec 2008 17:50:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>HELOChome loanshome mortgagesHomeLoansHomeMortgagesinvestment courageInvestmentCouragelendingsubordinationwells fargoWellsFargoWFCThu, 18 Dec 2008 17:50:00 EST<![CDATA[Cramer on BloggingStocks: Merrill starts process of CDO dumping]]>http://www.bloggingstocks.com/2008/07/30/cramer-on-bloggingstocks-merrill-starts-process-of-cdo-dumping/http://www.bloggingstocks.com/2008/07/30/cramer-on-bloggingstocks-merrill-starts-process-of-cdo-dumping/http://www.bloggingstocks.com/2008/07/30/cramer-on-bloggingstocks-merrill-starts-process-of-cdo-dumping/#commentsFiled under: , , , , ,

TheStreet.com's Jim Cramer says as long as there are other buyers of the paper, look for other similar deals.

Merrill's (NYSE: MER) (Cramer's Take) deal with Lone Star gives the first real stab of the private market value of this paper, 22 cents on the dollar. But when you add in the financing you can argue that it is about half that.

Why so low? Because even after a year and a half of stress, we still can't publicly value this stuff.

Remember the deal with Lone Star is a private one, where the investors have to wait five years for the paper to mature. We don't really know what a CDO is worth, you just know what they may have paid.

This is despite the fact that for years now, this stuff has existed, no one has come out and said "this CDO has a lot of Florida, so it is bad," or "this piece of paper has a 90% default rate," or "this debt is hindered by bad HELOC."

Without that info, we can't price it. Lone Star knows more than most, but basically had to put up very little. In this deal, Merrill said "here, we will pay you to take these off our hands."

Continue reading Cramer on BloggingStocks: Merrill starts process of CDO dumping

Cramer on BloggingStocks: Merrill starts process of CDO dumping originally appeared on BloggingStocks on Wed, 30 Jul 2008 09:09:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>blackstone groupBlackstoneGroupbxCDOfeaturedfigfortresshelocjim cramerJimCramerlone starLoneStarmermerrill lynchMerrillLynchsarbanes-oxleyWed, 30 Jul 2008 09:09:00 EST<![CDATA[Home equity lines of credit NOW DUE!]]>http://www.bloggingstocks.com/2008/05/28/home-equity-lines-of-credit-now-due/http://www.bloggingstocks.com/2008/05/28/home-equity-lines-of-credit-now-due/http://www.bloggingstocks.com/2008/05/28/home-equity-lines-of-credit-now-due/#commentsFiled under: , ,

The banks are starting to call in their markers. Home equity lines of credit, also known as HELOCs, were all the rage over the past few years and became very common among homeowners wanting to free up some equity. Perhaps it was for a room addition or college tuition. Maybe it was a 30 foot sail boat or just consolidating credit card bills at the lower interest rates. For me, it was used to create an opportunity fund for real estate investments.

Whatever your deal was, the HELOC landscape is changing rapidly. According to one of my lenders, Wells Fargo Bank (NYSE: WFC), the retail banking industry is looking for safety and liquidity -- and to improve theirs, they may be reducing yours. I have heard the same thing from mortgage brokers and private equity sources.

Lenders have been getting nervous as they watch home values move lower. They were writing equity lines at 80% loan-to-value. To maintain a margin of safety, they are reducing their exposure by calling due any unused portion of the available line. This means that if you had only used $100,000 of your $150,000 equity line you may receive notice in the mail that they are reducing the line to $100,000 and your available cash is zero.

Continue reading Home equity lines of credit NOW DUE!

Home equity lines of credit NOW DUE! originally appeared on BloggingStocks on Wed, 28 May 2008 15:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>featuredHELOCHome Equity Lines of CreditHomeEquityLinesOfCredithousingwells fargo bankWellsFargoBankWFCWed, 28 May 2008 15:00:00 EST<![CDATA[Cramer on BloggingStocks: Banks can't shoulder home equity burden]]>http://www.bloggingstocks.com/2007/11/28/cramer-on-bloggingstocks-banks-cant-shoulder-home-equity-burde/http://www.bloggingstocks.com/2007/11/28/cramer-on-bloggingstocks-banks-cant-shoulder-home-equity-burde/http://www.bloggingstocks.com/2007/11/28/cramer-on-bloggingstocks-banks-cant-shoulder-home-equity-burde/#commentsFiled under: , , , , , , , ,

Jim Cramer on BloggingStocksTheStreet.com's Jim Cramer explains why "purchased HELOC" is the next phrase to fear.

Purchased HELOC.

Get that term into your head. Home equity loans that were purchased from other originators are the scourge of the system. Any piece of paper backed by these second liens that were issued by pure mortgage originators is just a goner.

This is the paper that was generated by Fremont General (NYSE: FMT) (Cramer's Take) and NovaStar (NYSE: NFI) (Cramer's Take) and New Century Financial and American Home Mortgage and so many of the other bankrupt and walking-dead companies. It was mostly no-documentation loans paper and served as another way to tap money that was meant to be paid back when you flipped a home. It was predicated on the continued increase in value of your home.

Continue reading Cramer on BloggingStocks: Banks can't shoulder home equity burden

Cramer on BloggingStocks: Banks can't shoulder home equity burden originally appeared on BloggingStocks on Wed, 28 Nov 2007 09:09:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>BACBank of AmericaBankOfAmericaCCFCCITCIT GroupCitGroupCitigroup Inc.CitigroupInc.Countrywide FinancialCountrywideFinancialfeaturedFMTFremont GeneralFremontGeneralHELOCJim CramerJimCramerNFINovaStarWashington MutualWashingtonMutualWells FargoWellsFargoWFCWMWed, 28 Nov 2007 09:09:00 EST