Confessions of a Subprime Lender

After reading about Richard Bitner’s recent book entitled “Confessions of a Subprime Lender” I faced the possibility that this section of our generation will be known for our economic blunders.  Then the thought occurred to me that we could either be known for our amaziing ability to screw up, or we could be known as the generation who made things right.

It’s easy to understand the draw to the subprime boom back in the early 2000’s after reading bits of Mr. Bitner’s publication.  After realizing the awful truth about the lending industry – that its boundaries were too looose – Bitner bailed out based on ethics more than anything.  I hope that is the truth.

As I continued to look into the Bitner facts it was revealed that his company Kellner Mortgage is listed on the Implode-O-Meter – a website dedicated to tracking the foreclosure bust from the lending side.  It was nice to see that Implode-O-Meter is also tracking Non-Imploded Lenders as well.

All of this (along with the fact that I just saw Lehman Brothers SBF pop up on the Implode-O-Meter) brings me to a thought that logically concludes that we are NOT in the worst of this market yet.  Not only are we not in the worst of the market, but I’d be willing to stick my neck out on the chopping block to say that we are still years (not weeks or months) away from the worst.  When I think about the fact that commercial loans are still unaccounted for on the whole, it stirs up a sick feeling inside.  I live in a newer development where the builder went bankrupt, and the project was cut short by about 1/2 of the planned building.  And they were one of the big builders!

For those out there involved in REO, I think there’s still a very long row to hoe.  For those not yet in REO, it appears that more assistance is needed.

Commercial Loans: Behind the Next Hit

The article below was taken from the Wall Street Journal and touches on a subject that I’ve spent a lot of time considering. I’m sorry that the story cuts off – on the WSJ website you can register and read the rest of the article if you choose to.

By Jennifer S. Forsyth

Word Count: 454

So far most of the losses in the housing crisis have been from homeowners defaulting on their mortgages. But there is another wave of pain about to hit.

Developers increasingly are falling behind on loan payments, especially those who borrowed to finance acquisitions of land and construction of houses and condominiums. This has caused some confusion because regulators and banks typically lump these in with commercial real-estate loans.

Here, then, is a primer.

Question: What is a commercial real-estate loan?

Answer: When the Federal Deposit Insurance Corp. refers to commercial-real-estate loan…

Where is the Peak of Foreclosures and the Trough of our Economy?

I still snicker a little bit when I think back to the July 1, 2008 news that boasted the fact that we didn’t “officially hit bear market”.  The National Bureau of Economic Research has a pretty good description of what a recession consists of (read about it here for yourself).  It brings into consideration GDP (for those of you who slept during Economics 101, you can see the definition of GDP here), labor statistics and is defined as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.  A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.”

I think we can say it all together:  “We’re in a recession.”  There, didn’t that feel good?  Now let’s get out of it.  Look around for a second.  You have IndyMac going downward (is it a surprise that they were spun off from Countrywide?), Fannie and Freddie in a very unstable condition, and CNN’s headline for real estate news today reads: “Six months, 343,000 lost homes:  Through the first half of 2008, the foreclosure rate shows little sign of letting up.”

I’m not big on apocalyptic scare tactics, but…

…something tells me we’re not coming out of this anytime soon.

Even the Hollywood Celebs Have Mortgage Problems

It’s pretty easy to think of how good you might have it if you were a Hollywood start: The glamor, the fame, the fortunes. The possibilities seem endless when you ask yourself the question, “What would I do if I were world famous and a millionaire?” Activities such as these come to mind initially; heli-skiing in Switzerland, cruising the Caribbean in a 50-footer, and flying to Paris for the weekend. In my private jet.

The thought of Evander Holyfield missing payments or Ed McMahon becoming concerned about his long days-on-market leads me to two thoughts: We’re all human. Foreclosure could happen to anyone, anywhere, anytime.

In an article on CNN you can actually look at the public record-based information summarized by the entertainment media of celebrities who have or are having problems getting out from under real estate – good and bad. See “Celebrity Foreclosures”.

OK, so I have one more question that comes to mind with all of this: What would it be like to do the BPO for Michael Jackson’s Neverland Ranch?