Subprime Fallout and Foreclosure Impact
* Aegis Founder Takes Mismanagement Claims To Court (Chron.com, July 4th): "Rick Thompson, founder and former president of Aegis Mortgage Corp., once one of the nation's largest subprime lenders, … recently filed lawsuit [against] giant New York private-equity firm Cerberus Capital Management [claiming that] had management moved more quickly, [Aegis] would have been able to sell shares before problems in the subprime market made the company less attractive to investors. Thompson [who] started the company with $500,000 14 years ago and… owns 15% of the company, says… that in January 2005 [before the subprime crisis began,] investment firms looking to help Aegis launch a public offering valued the company between $600 million and $1 billion."
* Subprime Crisis Hits Texas Homeowners (Dallas Morning News, July 4th): "RealtyTrac: Texas ranks third in the nation in the number of foreclosures… Foreclosure Listing Service Inc.: Homes posted for foreclosure in the Dallas-Fort Worth area rose nearly threefold between 2000-2006… Mortgage Bankers Association: At the end of March, less than 1% of prime loans in Texas were 90 days or more past due or in foreclosure… The comparable figure for subprime loans was 8%. First American LoanPerformance: In Texas, subprime loans make up 18% of mortgages. But they accounted for about 45% of Texas foreclosures last year… About 16% of Dallas subprime loans had payments overdue by 60 days or more in April, vs. 13% nationwide."
* Home Loan Foreclosures On The Rise In Cuyahoga County (My Fox Cleveland, July 4th): "Home foreclosures in Cuyahoga County continue to surge. The hardest hit county in the hardest hit state may see 17,000 foreclosures this year -- almost a 25% increase from last year. County Treasurer Jim Rokakis calls it the epicenter of the mortgage meltdown in America. Ohio's foreclosure rate for Q1'07 was 3.5% -- almost triple the national figure. The region's sagging economy has combined with the failure of subprime mortgages and predatory lending to create a growing mortgage mess. "
* Downey Financial: Foreclosures Surge in Second Quarter (Colin Peterson in Seeking Alpha, July 3rd): "[A] Downey (DSL) Real Estate Owned survey for Q2 2007… DSL's REOs as of June 6, 2007: Downey REOs exploded in Q2… Based on the historical contribution of 40% of REOs by the 7 counties [covered in this survey], we can guess that Downey total REOs will increase by approximately 29/.4 = 72 for Q2 2007… DSL REOsDSL REOs by QuarterA dollar amount somewhere in the low eight figures… Of the total non-performing assets, real estate acquired in settlement of loans represented $17 million at March 31, 2007, up from $9m at December 31, 2006 and less than $1m at March 31, 2006. The inventory and foreclosure data in the Downey/SPF California markets is terrible. Downey's borrowers seem to be treading water."
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