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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (46641)	12/5/2005 10:30:23 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

Time bomb du jour: Monday, December 05, 2005 Investors Are 'Full Up' On Mortgages thehousingbubble2.blogspot.com Paul Muolo at National Mortgage News has the latest insider news. "Reading the tealeaves of mortgage banking is never easy. I remember back in 2000..I asked Countrywide chief executive Angelo Mozilo how business was. His answer was blunt and to the point: 'It stinks.' Then in 2001 production doubled to $2 trillion and in 2003 the industry funded an eye popping $3.9 trillion." "So, what do the tealeaves say right now about the coming year? The good news is that lenders aren't complaining about volumes. (In 2005 the industry will fund close to $3 trillion.) The gripe is about the flat yield curve and profit margins. One non-conforming lender told us that whole loan buyers (Wall Street, among others) aren't paying up for product anymore. This executive, requesting his name not be used, said that through November investors had bought so many loans that their balance sheets are 'full up.'" "He added that some funders are having what he called 'an interesting' fourth quarter. A small California lender we know said that until November his shop was earning money, but now investors aren't paying up and his firm is in the red. If the market doesn't turn by February he's prepared to trim staff drastically. Meanwhile, subprime giant Ameriquest laid off 800 in November, and Countrywide is trimming staff by 300. On the other hand, government figures show strong industry employment, but those numbers lag by 60 days."