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

To: Ramsey Su who wrote (69021)8/29/2006 9:13:28 AM
From: John Vosilla  Respond to of 110194
 
'Right now, I have reasons to believe that foreclosures are already much higher than Wall Street is estimating. Furthermore, based on the small sample size that I have analyzed so far, the losses per loan is going to be SHOCKING'

Yes the costs of holding a depreciating REO are quite significant. Add repair and closing costs and it is easy to see a 40% hit on a zero down loan foreclosed on that takes perhaps one year from lis pendens to finally closing the sale on the back end. For now I bet reserves are nill, and under GAAP they book accrued interest on toxic ARM's with a total loan balance far above true liquidation value as a tainted REO.



To: Ramsey Su who wrote (69021)8/29/2006 10:02:03 AM
From: russwinter  Read Replies (2) | Respond to of 110194
 
There is obviously a major condo bust underway as well, which is having a major impact on both the developers and the lenders. You would never know it looking at credit spreads and financial stocks. It's almost like the Riskloves feels holding such loans is some kind of opportunity. I truly feel like Alice going down the rabbit hole on this, just too strange.


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