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berny
224 Posts |
 Posted - 09/29/2008 : 9:32:54 PM
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I HAVE HEAR ALOTS OF RUMORS OF MANY WHOLESALE LENDERS WILL BE CLOSING IN THE
NEXT MONTHS AND NEXT YEAR 2009
WHAT DO YOU GUYS THINK
IS THE END NEAR OR JUST REBUILDING ?
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peter
4547 Posts |
Posted - 09/30/2008 : 04:16:02 AM
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Many wholesale lenders as well as brokers are likely to
be closing down before the end of the year and into 2009
as the Great Credit Crunch continues and the recession deepens.
Futher than that, the falling home prices and furthur decling
values in California in particular will leave very little room
for undercapitalized wholesale lenders and high fixed costs brokers.
Only the largest national lenders like Wells, Countrywide Bank,
HSBC, Citi, Flagstar, B of A, etc. will survive as they do have
their own in-house portfolio products that give them a better
profit margin than selling Agency products. As you can see,
most brokers prefer to work with these tier-one lenders due to
better rates and pricing for rebates. There isn't enough business
for wholesale lenders to survive. For example, Shearson Wholesale
which used to be an active and vibrant wholesale lender is no
longer around -- any many more with the same business model will
have to shrink or close down in coming months and into 2009.
That's my 2 cents.
Peter |
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darkstar
18092 Posts |
Posted - 09/30/2008 : 04:27:37 AM
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| Credit crunch?...Is that what you call it when people who don't qualify can't get a loan?...I call it a return to responsible lending so if more lenders and brokers fall, oh well, more for those of us that's left!... |
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RobStorm
482 Posts |
Posted - 09/30/2008 : 05:40:39 AM
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quote:
Originally posted by darkstar
Credit crunch?...Is that what you call it when people who don't qualify can't get a loan?...I call it a return to responsible lending so if more lenders and brokers fall, oh well, more for those of us that's left!...
I couldn't have said it better myself. |
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CoolMtgGuy
3663 Posts |
Posted - 09/30/2008 : 05:53:16 AM
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Be careful ... you will be ridiculed for acknowleding reality.
quote:
Originally posted by berny
I HAVE HEAR ALOTS OF RUMORS OF MANY WHOLESALE LENDERS WILL BE CLOSING IN THE
NEXT MONTHS AND NEXT YEAR 2009
WHAT DO YOU GUYS THINK
IS THE END NEAR OR JUST REBUILDING ?
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peter
4547 Posts |
Posted - 09/30/2008 : 06:02:06 AM
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Responsible lending means that as a lender you should
lend to the borrower who is well qualified by standard
underwriting procedures without any unfair cut of appraisal
value without recourse. Take for example, a borrower with
a 700 FICO full doc, can get a refi rate and term with one
lender or FHA at 90% LTV while another lender will not give
him the same loan but will not lend at all due to excessive
risk-averse loan approval procedure and unwarranted cut of
appraisal review without giving a chance of rebuttal or
new comps certification by the borrower's appraiser.
This is happening everyday especially with lenders who are
excessively risk-averse and add extra harsh stips to DU approved
loans unnecessarily.
Peter
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darkstar
18092 Posts |
Posted - 09/30/2008 : 06:05:50 AM
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quote:
Originally posted by peter
Responsible lending means that as a lender you should
lend to the borrower who is well qualified by standard
underwriting procedures without any unfair cut of appraisal
value without recourse. Take for example, a borrower with
a 700 FICO full doc, can get a refi rate and term with one
lender or FHA at 90% LTV while another lender will not give
him the same loan but will not lend at all due to excessive
risk-averse loan approval procedure and unwarranted cut of
appraisal review without giving a chance of rebuttal or
new comps certification by the borrower's appraiser.
This is happening everyday especially with lenders who are
excessively risk-averse and add extra harsh stips to DU approved
loans unnecessarily.
Peter
It's always better to NOT do a loan, it's their money, their perrogative, and if some are being really really picky, good for them!...If the people qualify for the refi, in your opinion, and can't get one, they won't suffer, they just can't refi now, oh well, NEXT!... |
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benjamin
2196 Posts |
Posted - 09/30/2008 : 06:17:02 AM
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There is a need for mortgages on the current and soon to be foreclosed properties. Investor programs have been cut drastically, 4 properties, limited use of rental income, 6 months reserves per property. No more "sell and bail", which has been used for years to allow someone to move up to a nicer home.
Many vacant homes will eventually have to be bulldozed, once mold infestates the house.
These are the problems that will remain for a very long time as mortgages tighten.
Screw Wall Street, we need affordable mortgages. |
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peter
4547 Posts |
Posted - 09/30/2008 : 06:31:00 AM
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Only Fannie limits to 4 while Freddie allows up to 6.
Downey, Amtrust, and Flagstar, still allow up to 10. Also,
if you refi your primary home the limit does not apply as
per GN Mortgage's recent flyer to me.
Also, in Southern California, even a dillapidated home
with a good sized lot will have several buyers. I was outbided
for a $51,000 vacation home in Tehachapi, CA (Kern County about
4 hours north of L.A.) with a 7,000 sq.ft lot with a mountain
view of the Tehacapi mountains. The home is in shambles but
the lot size is desirable, and there were several other bidders
for this low priced home.
Peter |
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blake1952
305 Posts |
Posted - 09/30/2008 : 06:37:30 AM
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| Atta boy, Darkstar the right words once again! |
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benjamin
2196 Posts |
Posted - 09/30/2008 : 06:37:58 AM
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| Rust belt needs bidders, period. |
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berny
224 Posts |
Posted - 09/30/2008 : 1:16:03 PM
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| WHOS NEXT |
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velecico
3935 Posts |
Posted - 09/30/2008 : 7:31:21 PM
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Kyles Hedgefunds plus 1 LOL |
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Nico
3056 Posts |
Posted - 09/30/2008 : 10:33:43 PM
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quote:
Originally posted by peter
Only the largest national lenders like Wells, Countrywide Bank,
HSBC, Citi, Flagstar, B of A, etc. will survive as they do have
their own in-house portfolio products that give them a better
profit margin than selling Agency products.
I couldn't disagree more. Securitizing with the Agencies produces a lot more profit at present that putting the loans on the balance sheet. If they do go on the balance sheet, an Agency guarantee wouldn't hurt, either.
Almost everyone is on an Agency-sale model. It's not a coincidence. |
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peter
4547 Posts |
Posted - 10/01/2008 : 11:01:01 AM
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Nico, thanks, and it's good to know from you. I have
always thought that portfolio products are giving banks
a better margin due to less competition. For example,
HSBC has an AAP (Accellerated Approval Program) which is
their own portfolio product with very high rates like
8.50% par for just 5/1 but goes to $2 million beyond the
loan amount limits of Agency conforming-jumbo products.
They are pushing this AAP program and I have always suspected
that they probably making much more money than Agency products.
Union Bank of California and Luther Burbank Fed Savings do
have their own portfolio products too in addition to Agency
products and they are pushing their own products that I suspect
they make more money there.
Peter |
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Nico
3056 Posts |
Posted - 10/01/2008 : 3:47:08 PM
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quote:
Originally posted by peter
Nico, thanks, and it's good to know from you. I have
always thought that portfolio products are giving banks
a better margin due to less competition. For example,
HSBC has an AAP (Accellerated Approval Program) which is
their own portfolio product with very high rates like
8.50% par for just 5/1 but goes to $2 million beyond the
loan amount limits of Agency conforming-jumbo products.
They are pushing this AAP program and I have always suspected
that they probably making much more money than Agency products.
Union Bank of California and Luther Burbank Fed Savings do
have their own portfolio products too in addition to Agency
products and they are pushing their own products that I suspect
they make more money there.
Peter
I'm not seeing it. Anyone will go to $8 million with 8.5%. They charge the 8.5% to stop that type of volume from coming in.
We'll see if the banks that put Agency rates on their balance sheet can sustain that for any period of time. |
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smoothlid
411 Posts |
Posted - 10/01/2008 : 5:25:32 PM
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homeownership is a right, as long as you do the "right" things, like have decent credit , secure job, & willingness to repay those who you borrow from.
It is not an entitlement, like so many seem to feel. |
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peter
4547 Posts |
Posted - 10/01/2008 : 5:50:14 PM
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NICO wrote:
"I'm not seeing it. Anyone will go to $8 million with 8.5%. They charge the 8.5% to stop that type of volume from coming in."
Just like Wells Fargo Wholesale. If you look at their rate
sheet on 30-year Jumbo Fixed for L/A over $1 million, the par
rate is well into 9.75%. Wonder if they are really getting
any loan in or it is just to show that they have a program
to offer.
Peter
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waynepbright
3660 Posts |
Posted - 10/01/2008 : 6:13:32 PM
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Darkstar, I've agreed with you on many occasions but yet; here I falter ... I understand your take on fewer Mortgage Broker / LO's being around but; If you, as a Broker/LO have fewer Lenders/Investors to turn to, how will that help your client either?? Fewer Lenders Hampers business Overall ...
quote:
Originally posted by darkstar
Credit crunch?...Is that what you call it when people who don't qualify can't get a loan?...I call it a return to responsible lending so if more lenders and brokers fall, oh well, more for those of us that's left!...
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hulkfunding
108 Posts |
Posted - 10/01/2008 : 7:15:32 PM
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quote:
Originally posted by Nico
quote:
Originally posted by peter
Nico, thanks, and it's good to know from you. I have
always thought that portfolio products are giving banks
a better margin due to less competition. For example,
HSBC has an AAP (Accellerated Approval Program) which is
their own portfolio product with very high rates like
8.50% par for just 5/1 but goes to $2 million beyond the
loan amount limits of Agency conforming-jumbo products.
They are pushing this AAP program and I have always suspected
that they probably making much more money than Agency products.
Union Bank of California and Luther Burbank Fed Savings do
have their own portfolio products too in addition to Agency
products and they are pushing their own products that I suspect
they make more money there.
Peter
I'm not seeing it. Anyone will go to $8 million with 8.5%. They charge the 8.5% to stop that type of volume from coming in.
We'll see if the banks that put Agency rates on their balance sheet can sustain that for any period of time.
There are banks/lenders that almost exclusively retain the mortgage loans they make. They don't sell to Fannie/Freddie. Often their loan programs have more aggressive loan features and similar or better pricing/rates than the Fannie/Freddie Agency offerings. An example of some of these non Fannie/Freddie lenders is ING, Astoria Federal, and numerous other local & regional banks. |
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peter
4547 Posts |
Posted - 10/01/2008 : 7:25:20 PM
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Hulkfunding wrote:
" An example of some of these non Fannie/Freddie lenders is ING, Astoria Federal, and numerous other local & regional banks."
In fact, ING does not carry any Agency program. They do lend
100% their own in-house portfolio loans. Don't know about
Astoria Federal but do know Union of California does all
100% portfolio loans as well.
The question I have been discussing with Nico is whether it is
more profitable for the bank to do their own portfolio loans
or to do Agency loans. In the specific case of ING, Astoria,
and Union Bank, I think they are more profitable with their
own in-house loan products as otherwise they would be selling
Agency products from Fannie and Freddie.
Peter |
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hulkfunding
108 Posts |
Posted - 10/01/2008 : 7:41:16 PM
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In a time when the secondary mortgage market and Agency Fannie/Freddie offerings are contracting with the pricing getting much worse across the board, why can’t the big banks like Citi, Wells, and Chase offer true portfolio mortgage loans for quality borrowers and “low” risk scenarios?
Why is it that smaller lenders like ING can offer a quality borrower a good rate on a super jumbo loan but Citi, Wells, and Chase can only offer the horribly priced non-agency/non-conforming jumbo crap?
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Nico
3056 Posts |
Posted - 10/01/2008 : 7:50:41 PM
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quote:
Originally posted by smoothlid
homeownership is a right, as long as you do the "right" things, like have decent credit , secure job, & willingness to repay those who you borrow from.
It is not an entitlement, like so many seem to feel.
I disagree. Homeownership is indeed a right. Credit is not. Don't confuse the two. If someone has a problem qualifying for credit, they can pay cash. If not, they can rent. Simple.
quote:
Just like Wells Fargo Wholesale. If you look at their rate
sheet on 30-year Jumbo Fixed for L/A over $1 million, the par
rate is well into 9.75%. Wonder if they are really getting
any loan in or it is just to show that they have a program
to offer.
It's to stop those units from coming in.
quote:
They don't sell to Fannie/Freddie. Often their loan programs have more aggressive loan features and similar or better pricing/rates than the Fannie/Freddie Agency offerings. An example of some of these non Fannie/Freddie lenders is ING, Astoria Federal, and numerous other local & regional banks
If it was that good, why are they not dominating market share? I don't even see them anywhere in the Top 5 in any geographics I've looked at.
quote:
Why is it that smaller lenders like ING can offer a quality borrower a good rate on a super jumbo loan but Citi, Wells, and Chase can only offer the horribly priced non-agency/non-conforming jumbo crap?
I don't have a crystal ball, but we'll probably know in time.
People are quick to go against the depository institutions. Citi, Wells, and Chase were ridiculed for not doing 100% SISA. They were talked down on for not doing neg ams. They were talked down on for having guidelines "too strict".
Yet they are still here. Now they're being talked down on for not offering similar rates on balance sheet non conforming loans like Agency loans.
How many times do we have to go around this circle with people bashing the main banks and praising the ones that go outside the box? |
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quasigovy
494 Posts |
Posted - 10/01/2008 : 8:06:40 PM
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quote:
Originally posted by darkstar
Credit crunch?...Is that what you call it when people who don't qualify can't get a loan?...I call it a return to responsible lending so if more lenders and brokers fall, oh well, more for those of us that's left!...
BINGO!!!!!!!!!!!!!! NAILED IT!!!!!!!!!!!!
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hulkfunding
108 Posts |
Posted - 10/01/2008 : 8:15:58 PM
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I would think that the ING, Astoria Federal, etc... Portfolio is of very good quality as they never crossed the line with super-high LTVs or reckless underwriting. We are talking about good loans that have some features that Fannie/Freddie do not offer, such as, higher loan limits.
Why don't these portfolio lenders dominate market share? Maybe they would if they marketed themselves better. Maybe some banks choose to focus on lending in certain limited geographic footprints. Maybe they do "dominate" but only in certain pockets where they are most active. I know that in the NY-NJ metro area, a good quality borrower borrowing a million dollars on a 75 LTV mortgage would much rather have a no points rate in the sixes than a Citi, Wells, or Chase non-conforming/non-agency 8% with points.
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Nico
3056 Posts |
Posted - 10/01/2008 : 8:33:32 PM
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quote:
Originally posted by hulkfunding
I would think that the ING, Astoria Federal, etc... Portfolio is of very good quality as they never crossed the line with super-high LTVs or reckless underwriting. We are talking about good loans that have some features that Fannie/Freddie do not offer, such as, higher loan limits.
Why don't these portfolio lenders dominate market share? Maybe they would if they marketed themselves better. Maybe some banks choose to focus on lending in certain limited geographic footprints. Maybe they do "dominate" but only in certain pockets where they are most active. I know that in the NY-NJ metro area, a good quality borrower borrowing a million dollars on a 75 LTV mortgage would much rather have a no points rate in the sixes than a Citi, Wells, or Chase non-conforming/non-agency 8% with points.
Quality is not the issue. Liquidity is.
That's what most of you guys fail to understand. Just because a borrower is a good borrower does not mean that it's a good loan. Lexus are good vehicles, but guess what? You won't find a new one at a BMW dealership. Why? It's not what they do.
We are in an Agency-salable pricing model pretty much industry wide. The main concern is not whether or not the loan "makes sense" but if it's salable on the secondary market. If you can wrap your mind around that concept, lending will make more sense to you.
Never have I seen any of the firms you mention dominate ANYWHERE in their local market. And please tell me exactly how a lender "markets" themselves. I don't exactly see commercials on television that advertise wholesale lenders.
You make a good point about a borrower would rather be in the 6's than go with Citi, Chase, or Wells and be in the 8's. But you know what? Citi, Chase and Wells would probably rather have that borrower go somewhere else than to get a loan with them and then they have to hold it on the balance sheet. The feeling is mutual.
Do you think it's priced in the 8's for some other reason other than the banks not wanting to hold that paper? |
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hulkfunding
108 Posts |
Posted - 10/01/2008 : 9:00:45 PM
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| Nico, these smaller institutions do not have any liquidity issues. They fund and hold the assets on their balance sheets. Their rates are nice and low which is a good indicator of them having a good appetite for those quality loans that just happen to fall outside of the cookie cutter one dymensional Agency Guidelines. |
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Nico
3056 Posts |
Posted - 10/01/2008 : 9:02:50 PM
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quote:
Originally posted by hulkfunding
Nico, these smaller institutions do not have any liquidiy issues. They fund and hold the assets on their balance sheets. Their rates are nice and low which is a good indicator of them having a good appetite for those quality loans that just happen to fall outside of the cookie cutter one dymensional Agency Guidelines.
Lemme bookmark this page so I can quote you later.
I'll put you next to the New Century guy. Thanks. |
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LaCostaLoanGuy
12 Posts |
Posted - 10/01/2008 : 9:05:07 PM
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| I have heard rumors Flagstar could be ailing. Keep an eye on them, be careful. |
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hulkfunding
108 Posts |
Posted - 10/01/2008 : 9:12:51 PM
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quote:
Originally posted by hulkfunding
Ok Nico, is that also next to the Fannie/Freddie Doc Waiver, Appraisal Inspection Waiver, 65% DTI Approve Eligible, 97-100 CLTV, Pass The Buck To The Tax Payer, reckless lending guy?.
Thanks...
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Nico
3056 Posts |
Posted - 10/01/2008 : 9:12:55 PM
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quote:
Originally posted by hulkfunding
Ok Nico, is that also next to the Fannie/Freddie Doc Waiver, Appraisal Inspection Waiver, 65% DTI Approve Eligible, 97-100 CLTV, Pass The Buck To The Tax payer, reckless lending guy?.
Thanks...
Never seen an income waiver at that LTV, that DTI, or a PIW on that LTV or DTI.
Safe to say your statement is ridiculous, I think. |
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hulkfunding
108 Posts |
Posted - 10/01/2008 : 9:18:57 PM
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Nico, these smaller shops were/are keeping everything on their balance sheets because they underwrite with extreme care and intend for the loans to be long term performing assets on their balance sheets.
They are totally opposite of New Century and the like, which had little regard for quality and securitized and sold off the paper to anyone who would buy it in the secondary. Even the Fannie/Freddie Agencies admitted to nibbling at some rough Alt-A and some subprime paper, something that the smaller portfolio lenders did not do.
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Nico
3056 Posts |
Posted - 10/01/2008 : 9:24:41 PM
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quote:
Originally posted by hulkfunding
Nico, these smaller shops were/are keeping everything on their balance sheets because they underwrite with extreme care and intend for the loans to be long term assets on their balance sheets.
They are totally opposite of New Century and the like, which had little regard for quality and securitized and sold of the paper anyone who would buy it in the secondary. Even the Agency's admitted to nibbling at some rough Alt-A and some subprime paper, something that the smaller portfolio lenders did not do.
That's not the New Century aspect I'm comparing to.
I'm saying I think it's funny that people that are not in the know to come on here and remark about how "solid" institutions are and why they do things etc.
Come on. How in the hell is a mortgage broker going to comment with accuracy about a bank's pricing model? Honestly, please tell me.
It's that whole "They do this because of this! And this is WHY they do it. It results in better quality! X is a strong organization!!" and then you find out it's some LO just regurgitating what his AE told him the other day after she had her ra-ra conference call.
Go back in the archives and look at all the LOs that said that NEW and Fremont were "solid" and "strong" and had SO much to say about their models and philosophy which turned out to be all BS.
Look, I don't blame people for admiring that a bank does $2 million deals at 6.0%. That's great, and you need to utilize it. But the minute you start talking about solvency, and liquidity, and pricing models and you haven't done your homework, then you're over the line and you're spreading disinformation. That's not fair to the people who come here and take some peoples' words as fact.
Here are the facts:
1) Pricing is good
2) Loans are going on the balance sheet
3) We currently have no idea if it's profitable
4) We currently have no idea if it's sustainable
5) Time will tell.
Anything beyond this is total speculation and should be labeled as such, and NOT labeled as fact. |
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hulkfunding
108 Posts |
Posted - 10/01/2008 : 9:42:42 PM
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Nico I agree that some LOs speak on issues that are way above there level of understanding.
Does this bank have any solvency or liquidity issues? Hudson City Bancorp, (stock symbol- HCBK)... Do they need to be "bailed out" or "seized by the government" like Fannie/Freddie?
Hudson City is a NY/NJ/CT regional portfolio lender that does both retail and wholesale to brokers with rates and pricing that crushes cookie cutter banks like Citi and Chase.
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Nico
3056 Posts |
Posted - 10/01/2008 : 9:45:47 PM
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quote:
Originally posted by hulkfunding
Nico I agree that some LOs speak on issues that are way above there level of understanding.
Does this bank have any solvency or liquidity issues? Hudson City Bancorp, (stock symbol- HCBK)... Do they need to be "bailed out" or "seized by the government" like Fannie/Freddie?
Hudson City is a NY/NJ/CT regional portfolio lender that does both retail and wholesale to brokers with rates and pricing that crushes cookie cutter banks like Citi and Chase.
Tough to say. I'd have to do hours of research, and I don't feel like doing it.
Like I said, we'll see how these regional banks shake out in the next 12-18 months. THEN we'll make conclusions.
Anyone can start a car and drive it with no radiator fluid. But how long will it drive for? Just because it cranks doesn't mean it's drivable long term.
I honestly don't know the answer. Maybe they fair well, maybe they don't. It's all speculation on my part so we'll just have to wait and see. |
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hulkfunding
108 Posts |
Posted - 10/01/2008 : 9:57:04 PM
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I checked their most recent income statements on Yahoo Finance and I noticed something strange that maybe you can enlighten me on.
Hudson City, the portfolio lender with great rates and unique products, is showing a very large number in the section called “net income.” However, when I look at the same section for a big Agency lender like Citi it shows a much larger number but in parenthesis.
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Nico
3056 Posts |
Posted - 10/01/2008 : 9:59:56 PM
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quote:
Originally posted by hulkfunding
I checked their most recent income statements on Yahoo Finance and I noticed something strange that maybe you can enlighten me on.
Hudson City, the portfolio lender with great rates and unique products, is showing a very large number in the section called “net income.” However, when I look at the same section for a big Agency lender like Citi it shows a much larger number but in parenthesis.
Take a look at the age of the companies. You'll see that Citi and Chase have been around for about 200 years. Also take a look at the size of the company and how many clients they serve. Next, you'll want to take a look at assets.
Compare those and get back with me.
If you think Hudson City is great, then you should buy as much stock as you can. Hell, buy it on margin. You should cash in your kid's college fund too. You're sure they'll perform, aren't you? |
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SolarMTG
387 Posts |
Posted - 10/01/2008 : 10:02:33 PM
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quote:
Originally posted by berny
WHOS NEXT
National City |
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hulkfunding
108 Posts |
Posted - 10/01/2008 : 10:26:35 PM
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Hey Nico, it's getting late and I'm calling it a night. But just so you know, I enjoyed having this spirited discussion and I look forward to reading or posting with you in the future.
By the way, are you still an AE with Citi? If so I have been noticing that Citi's Conventional pricing has gotten worse relative to other lenders like Sun Trust, TB&W, Vertice, etc... Citi was rarley a price leader but they were never this far out. |
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MortgageBoarder
3976 Posts |
Posted - 10/01/2008 : 10:29:07 PM
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Great points you are making in this thread Nico, especially the comments below in bold!
quote:
Originally posted by Nico
quote:
Originally posted by smoothlid
homeownership is a right, as long as you do the "right" things, like have decent credit , secure job, & willingness to repay those who you borrow from.
It is not an entitlement, like so many seem to feel.
I disagree. Homeownership is indeed a right. Credit is not. Don't confuse the two. If someone has a problem qualifying for credit, they can pay cash. If not, they can rent. Simple.
quote:
Just like Wells Fargo Wholesale. If you look at their rate
sheet on 30-year Jumbo Fixed for L/A over $1 million, the par
rate is well into 9.75%. Wonder if they are really getting
any loan in or it is just to show that they have a program
to offer.
It's to stop those units from coming in.
quote:
They don't sell to Fannie/Freddie. Often their loan programs have more aggressive loan features and similar or better pricing/rates than the Fannie/Freddie Agency offerings. An example of some of these non Fannie/Freddie lenders is ING, Astoria Federal, and numerous other local & regional banks
If it was that good, why are they not dominating market share? I don't even see them anywhere in the Top 5 in any geographics I've looked at.
quote:
Why is it that smaller lenders like ING can offer a quality borrower a good rate on a super jumbo loan but Citi, Wells, and Chase can only offer the horribly priced non-agency/non-conforming jumbo crap?
I don't have a crystal ball, but we'll probably know in time.
People are quick to go against the depository institutions. Citi, Wells, and Chase were ridiculed for not doing 100% SISA. They were talked down on for not doing neg ams. They were talked down on for having guidelines "too strict".
Yet they are still here. Now they're being talked down on for not offering similar rates on balance sheet non conforming loans like Agency loans.
How many times do we have to go around this circle with people bashing the main banks and praising the ones that go outside the box?
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quasigovy
494 Posts |
Posted - 10/01/2008 : 10:59:20 PM
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quote:
Originally posted by hulkfunding
Hey Nico, it's getting late and I'm calling it a night. But just so you know, I enjoyed having this spirited discussion and I look forward to reading or posting with you in the future.
By the way, are you still an AE with Citi? If so I have been noticing that Citi's Conventional pricing has gotten worse relative to other lenders like Sun Trust, TB&W, Vertice, etc... Citi was rarley a price leader but they were never this far out.
AAAAWWWWWWWWWW SMACK!!!!!!!!!!!!! |
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Nico
3056 Posts |
Posted - 10/01/2008 : 11:05:23 PM
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quote:
Originally posted by hulkfunding
Hey Nico, it's getting late and I'm calling it a night. But just so you know, I enjoyed having this spirited discussion and I look forward to reading or posting with you in the future.
By the way, are you still an AE with Citi? If so I have been noticing that Citi's Conventional pricing has gotten worse relative to other lenders like Sun Trust, TB&W, Vertice, etc... Citi was rarley a price leader but they were never this far out.
I'm not here in a professional capacity. I start posting about work and my comments end up on CNN. No thanks.
Interesting how you shift the argument around so fast. You constantly hop from topic to topic in the discussion without really drilling down on the fundamentals. You start with balance sheet lending and pricing models, but you can't stand your ground. So then you compare international banks to regional banks, and then you can't stand your ground then. Now it's talking about pricing between banks. Amazing.
When your attention span can latch on, maybe we can drill down on some topics and I can hear some valid points from your point of view.
If your pricing is that bad with certain banks, it may be directly related to your performance as an office with that bank.
Take care. |
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quasigovy
494 Posts |
Posted - 10/01/2008 : 11:46:54 PM
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Smart move on the no comment Nico.
I like to drill down from time to time…. What do you say we have some fun?
Let's drill down on how big time 2nd lien holders (equity or 2nd) such as National City and Citi have avoided the axe, and if they can continue to do so.
Am I correct that Citi wrote a TON of reduced doc equity lines?
If I am not mistaken, the hot Alt-A combo loan for a few years was the Aurora first lien with a Citi second lien.
If memory serves me well, Citi was making No Ratio 2nds to 100% down to a 620 for quite a while. So these loans not only were Alt-A, they were in 2nd position!!!!
My last memory is that no reserves were required for the Aurora firsts, and in fact, cash out from the Citi second was considered reserves for the Aurora firsts on Stated and No Ratio. So….. no income proved and no reserves to 100% (maybe 95 cash out, 100 rate term)
For those of you around when a bunch of lenders were offering these Stated/No ratio combo loans with cash out for reserves…. ALL the firsts went to Lehman and all the 2nd went to Citi. At least 20 wholesale banks were selling this for Lehman and Citi, including Lehman's Aurora.
Nico, would it be fair to ask you where Citi’s ALT-A 2nd lien exposure has been published already? Can anybody? It has to be staggering.
If National City sells equity lines to the government at 25%....... does that set a market price for Citi’s 2nd liens, or vice versa? Can either company withstand that kind of valuation?
Drill it. |
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quasigovy
494 Posts |
Posted - 10/02/2008 : 12:01:24 AM
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Look what I found. It is way back from March, but interesting.
http://www.cnbc.com/id/23506350
It says they aimed to cut mortgage exposure by 45 billion.... Did they?
Here are some quotes from the article-
-Citigroup is the fourth-largest U.S. mortgage lender, having made $198 billion of home loans in 2007, according to the newsletter Inside Mortgage Finance.
Its largest mortgage lending rivals include Countrywide Financial Corp, Wells Fargo, JPMorgan
Chase & Co and Bank of America Corp. The latter agreed in January to buy Countrywide.
According to its annual report, Citigroup ended 2007 with $150 billion of first mortgages and $63 billion of second mortgages, including home equity loans, on its books.
About half the loans are in California, New York, Florida, Illinois and Texas, with 27 percent in California alone. |
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Nico
3056 Posts |
Posted - 10/02/2008 : 02:29:12 AM
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quote:
Originally posted by quasigovy
Smart move on the no comment Nico.
I like to drill down from time to time…. What do you say we have some fun?
Let's drill down on how big time 2nd lien holders (equity or 2nd) such as National City and Citi have avoided the axe, and if they can continue to do so.
Am I correct that Citi wrote a TON of reduced doc equity lines?
If I am not mistaken, the hot Alt-A combo loan for a few years was the Aurora first lien with a Citi second lien.
If memory serves me well, Citi was making No Ratio 2nds to 100% down to a 620 for quite a while. So these loans not only were Alt-A, they were in 2nd position!!!!
My last memory is that no reserves were required for the Aurora firsts, and in fact, cash out from the Citi second was considered reserves for the Aurora firsts on Stated and No Ratio. So….. no income proved and no reserves to 100% (maybe 95 cash out, 100 rate term)
For those of you around when a bunch of lenders were offering these Stated/No ratio combo loans with cash out for reserves…. ALL the firsts went to Lehman and all the 2nd went to Citi. At least 20 wholesale banks were selling this for Lehman and Citi, including Lehman's Aurora.
Nico, would it be fair to ask you where Citi’s ALT-A 2nd lien exposure has been published already? Can anybody? It has to be staggering.
If National City sells equity lines to the government at 25%....... does that set a market price for Citi’s 2nd liens, or vice versa? Can either company withstand that kind of valuation?
Drill it.
Wouldn't know. I'm not familiar with second liens. Wrong division.
Next.
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johnnyboy38109
3015 Posts |
Posted - 10/02/2008 : 07:27:06 AM
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quote:
Originally posted by RobStorm
quote:
Originally posted by darkstar
Credit crunch?...Is that what you call it when people who don't qualify can't get a loan?...I call it a return to responsible lending so if more lenders and brokers fall, oh well, more for those of us that's left!...
I couldn't have said it better myself.
Nor could I.
Perfect. |
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quasigovy
494 Posts |
Posted - 10/02/2008 : 08:38:39 AM
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Good answer again Nico.
A true company man. |
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hulkfunding
108 Posts |
Posted - 10/02/2008 : 1:23:41 PM
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Yeah Nico's never seen a doc waiver at high LTV, but we all know Citi did plenty of Agency DU SISA up to 95% LTV where everything is stated and only a job was verified. But it was ok, because it was a Fannie/Freddie eligible product.
Again, non of the portfolio lenders that I mentioned did any of that junk... and they have not posted billions in losses, and they don't need any bail outs or govt intervention.
I would drill down further but according to Nico, brokeroutposters are not knowledgable enough to even engage in such sophisticated subject matters. |
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quasigovy
494 Posts |
Posted - 10/02/2008 : 5:29:30 PM
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quote:
Originally posted by hulkfunding
Yeah Nico's never seen a doc waiver at high LTV, but we all know Citi did plenty of Agency DU SISA up to 95% LTV where everything is stated and only a job was verified. But it was ok, because it was a Fannie/Freddie eligible product.
Again, non of the portfolio lenders that I mentioned did any of that junk... and they have not posted billions in losses, and they don't need any bail outs or govt intervention.
I would drill down further but according to Nico, brokeroutposters are not knowledgable enough to even engage in such sophisticated subject matters.
I dont think he was talking about everyone. Just you. |
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Nico
3056 Posts |
Posted - 10/02/2008 : 5:32:22 PM
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quote:
Originally posted by hulkfunding
Yeah Nico's never seen a doc waiver at high LTV, but we all know Citi d | | | |
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