Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Ramsey Su who wrote (53411)	2/11/2006 12:23:35 PM
From: russwinter	Read Replies (5) \| Respond to of 110194

I received this e mail from a friend involved in the subprime lending area, who is helping me track changing credit standards. She sees tightening going on at the margin, but always seem to be some worm hole or "exception" somewhere. The borrowers are clueless about what they are are getting or how these mortgages even work, or what conditions are in the housing market. They ignore Bubble reports of slowing, and feel entitled. She is pushing fixed rates to replace resetting ARMs now, but the challenge is the big prepayment penalties. She'll have someone where that comes off in four months, only to find a less scrupulous competitor already refied them when see called back. First Franklin will take a borrower one day out of bankruptcy dismissal....but have tightened up in the past six months on DTI (debt to income ratio ), and pay off of old collections. Beneficial, American General, Homecomings and Greentree are the absolute bottom feeder lenders. I don't think Conseco is still in business or is operating as another iteration now. Their rates are usually 11%+, collateral types are generally piss poor (e.g. single wide trailers)...but I do come across borrowers in these loans with 650+ credit scores who somehow said yes to the loan and just want the hemorraging to stop.