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: Jim McMannis who wrote (117980)	4/23/2008 3:12:06 AM
From: Jim McMannis	Read Replies (1) \| Respond to of 306849

U.S. Architects' Services Index Falls to Record as Demand Slows bloomberg.com

To: Jim McMannis who wrote (117980)	4/23/2008 3:41:05 AM
From: Elroy Jetson	Respond to of 306849

As foreclosures quadruple in California there is little difference between the current period and the 1989-1996 downturn, although it will likely get worse in this cycle. In the 1989-1996 cycle Golden West experienced extremely minimal losses percentage wise as compared with other lenders such as Wells Fargo and Bank of America. I believe home loan duration before refinancing nationally is 7.5 years and recently 4.5 years in California. In two years of suddenly accepting loans underwritten by Wachovia's commission paid loan broker network you can introduce a major fraud problem into a portfolio where 40% of your portfolio may be fraudulently underwritten - with a loan types ("option pay" and "stated income") which are extremely susceptible to failure when not underwritten to the standard Golden West standards. Perhaps in North Carolina real estate valuations are not so extremely cyclical so broker network indiscretions have less impact on loan portfolio quality. Chancels has suggested that loan losses must be really bad at other lenders if the Golden West portfolio is struggling. But I am suggesting Wachovia's change in sourcing these loans may have dramatically altered the composition of this portfolio. .