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 Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (108288)	3/6/2008 7:34:22 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 306849

the only thing holding up CA RE relative to FL (where thornburg has excessive exposure) is that CA did not have the full bore development (esp. condos) that FL did(except for central CA, where nobody REALLY wants to live)...thus a somewhat limited supply....doesn't mean the prices did not inflate out of reach of the target market...those markets could only function with the secondary markets supporting those loans...now that market has collapsed and companies like TMA (and NLY) are swimming naked (as buffet likes to say) the point he is making, quite simply put, is the high risk markets (no one can deny CA fits on the basis of affordability.. which creates a diminishing pool of prospective buyers) puts thornburg in the cross hairs of BK because of collateral collapse i will grant you that they used relatively strict underwriting standards, but frankly, it doesn't matter when underlying collateral is in bubble territory and is now deflating and who really knows where is the 'floor' and now the risk is rising for the 'walk away' borrower even with good ficos and income simply due to the fact that the mortgages are underwater...nobody wants that paper. period. the risk is toward the underlying collateral and the diminishing willingness of borrowers to pay iow... the bigger they are, the harder they fall