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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Elroy Jetson who wrote (46050)	11/23/2005 2:13:21 PM
From: UncleBigs	Read Replies (3) of 110194

World Savings underwrites arm refinance loans primarily in California and Florida. They need to originate over $4 billion per month or their balance sheet will contract. A contracting balance sheet and shrinking interest margin will devastate earnings. I don't care about idolizing Marion and Herb. They have gotten very aggressive with 1.75% teaser rate pay option arm loans. That doesn't sound like conservate underwriting to me. We are in an unprecedented real estate bubble. A company with $115 billion worth of mortgage loans backed by Florida and California real estate is at risk. I don't care the Herb and Marion know the names of people with fixed rate loans.

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