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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (108218)	3/6/2008 2:32:16 PM
From: Think4Yourself	Read Replies (1) \| Respond to of 306849

I have a comment on that last 48.1% LTV issue. I agree with him that any recent homeowner who took out a second mortgage is probably already in a position of negative equity. I also agree that owner is likely to walk at some point. I disagree that TMA is the bag holder. TMA certainly gets hurt but the real bagholders are the fools who gave out the second mortgage, not TMA. The entity who wrote the second mortgage will get nothing in a foreclosure, because their mortgage is junior to TMA's. It is a total, 100% writeoff for the second mortgage lender. TMA still has the current value of the property, plus the original deposit, to offset the loan they made. My understanding is that TMA's portfolio is considered the "gold standard" largely because they didn't give zero down loans. If you wanted a Jumbo loan from TMA you had to put some serious skin in the game. If you were really a low life scumbag going to take out a liar loan you would go to a company that let you do it with 5% down, not 20% down. The author's observations do bring up an interesting point. If TMA has that much junk in their portfolio with large down payments, what shape are the other lenders in when they did not require large down payments? It's going to get REAL interesting soon.

To: MulhollandDrive who wrote (108218)	3/6/2008 4:52:22 PM
From: Live2Sail	Read Replies (1) \| Respond to of 306849

Thanks. There was an article by Herb Greenberg who appeared on CNBC with the CEO of Thornburg. It was an interesting insight. I'm too lazy to google it. I don't doubt that Thornburg has a bunch of toxic waste too. It's everywhere.