quote:

Originally posted by EbonyRose:

A recent study shows that more than 2 million homeowners who purchased homes with a subprime mortgage loan between 1998 and 2006 will lose their homes to foreclosure. Ten percent of them will be African-American.

Interesting stat. I wonder where it came from? Many people discussing this issue would have us believe that the entire mortage crisis is due to minorities. Why isn't it widely publicized that the majority of people (to the tune of 90%) losing their homes to foreclosure ARE NOT BLACK?

That's funny ... it's clearly an example of the media misleading folks. As you note, the media would have you believe that this whole thing is about "minorities" buying more house than they can afford. But to make that point, one would have to acknowledge that the sub-prime market is racially/ethnically predatory [which it is].

quote:

Originally posted by negrospiritual:
Why isn't it widely publicized that the majority of people (to the tune of 90%) losing their homes to foreclosure ARE NOT BLACK?

Because the last thing that the media and the government want to do is to scare the soccer moms in middle America, and cause them to stop shopping and spending money. Even though we all know that white people are not the only ones spending money on consumer goods. That is the only reason that we are not in a recession.

The image of you and I loosing our homes is more palatable than saying that 90% of the foreclosures are white people. The very people who are carrying too much credit related debt and bought houses that they knew they couldn't afford. In addition, they are the masters of getting adjustable rate mortgages which permits them to buy a larger more expensive house.

The more I read about this foreclosure debacle, the more I'm starting to believe that the numbers that we see are skewed. The reason that I say that is I look at foreclosure letters everyday at my job.

As I've said before, We send out no less than 5000 per week. I have seen days where we send out as many as 20,000. And we do not service any loans that are not "A" paper loans.

As a matter of fact, all of the branches are in affluent neighborhoods. I believe that these reports are combining all foreclosures not just sub-prime.

quote:

Originally posted by negrospiritual:
How come we're not hearing about banks, and mortgage companies going belly up, but we're constantly told that there is a crisis?

quote:

Originally posted by ac9311:
They are going out of business. There's alot of the small to mid sized mortgage lenders who have folded. You will see Countrywide laying off large numbers of employees soon.

Unfortunately Countrywide has announced layoffs of 12,000. In additiona the house of cards is starting to fall there are mortgage companies folding. Below are a couple of the stories:


Countrywide to cut as many as 12,000 jobs
Lender cites conditions in mortgage industry, expected drop-off in loans
The Associated Press
Updated: 8:09 p.m. CT Sept 7, 2007
LOS ANGELES - Struggling mortgage lender Countrywide Financial Corp. will cut as many as 12,000 jobs in a bid to slash costs and cope with soaring foreclosures and defaults, the company said Friday.

The cuts, amounting to as much as 20 percent of its work force, are needed because the company expects new mortgages to fall about 25 percent in 2008 from this year’s levels, Countrywide said.

In a letter distributed to employees, Countrywide Chief Executive Angelo Mozilo called the current market cycle “the most severe in the contemporary history of our industry.”

“During the past two years the growth in home price appreciation has stopped dead in its tracks and in many areas of the country it has turned in the wrong direction,” Mozilo said in the letter.

In recent weeks, Countrywide borrowed $11.5 billion and sold a $2 billion stake to Bank of America so it could keep operating its retail banking and mortgage lending businesses.

The job cuts planned during the next three months are expected to center primarily on the company’s production divisions and its general and administrative support areas.

Actual reductions could be lower if interest rates and other market conditions improve, Countrywide said.

The latest cuts followed the elimination of about 900 positions earlier this week and 500 others last month.

The Calabasas-based company employed more than 61,000 people as of July 31, with about 34,000 working in loan production.

Earlier Friday, IndyMac Bancorp Inc. announced plans to eliminate as many as 1,000 jobs, citing difficulties from the mortgage lending and housing market downturns.

The Pasadena, Calif.-based mortgage lender and bank said it expects its loan production volume to decline by roughly half in the fourth quarter.

Countrywide said it intends to keep transferring its residential lending business into its Countrywide Bank unit as a way to strengthen its access to funding.

Almost all of its residential lending activity will be originated through the bank by the end of this month, the company said.

Countrywide has also shifted its loan production guidelines and now only makes loans that can be sold on the secondary market to government-backed enterprises such as Fannie Mae or Freddie Mac or that qualify under investment requirements for its banking unit.

Countrywide has been struggling as the housing slump led to a sharp rise in mortgage defaults and foreclosures, particularly among borrowers with subprime loans.

The mortgage fallout has left many lenders strapped for money to fund new loans.

Lenders that relied on selling loans on the secondary market to fund their operations have been particularly hard hit, with dozens going out of business or forced into bankruptcy this year.

That has resulted in tens of thousands of jobs being lost industrywide.

Like other lenders, Countrywide has tightened its credit guidelines and stopped selling some types of adjustable rate loans.

In the letter to employees, Mozilo outlined additional steps the company is taking to shore up its operations.

Among the changes, the company is consolidating its sales force and plans to keep targeting borrowers who now have adjustable rate subprime loans with offers to refinance with prime loans that carry more stable payments.

Mozilo noted some 75 percent of the company’s Full Spectrum Lending Division’s loans this year have been prime loans, many sold to borrowers who refinanced from subprime loans.

Despite the layoffs, Mozilo said in the letter that Countrywide’s consumer markets division would keep expanding its sales force.

Last month, the division hired nearly 1,000 sales people, a record for the unit, he said.

“As we carry out our plan, the company’s overarching focus is exactly where it has always been: to remain an industry leader in the U.S. residential lending business,” Mozilo said in a prepared statement issued to the media.

The company declined further comment.

Countrywide shares fell 27 cents to $18.21 on Friday. In after-market trading, shares rose to $18.48. Shares of IndyMac fell 25 cents, or 1.1 percent, to $21.41.


Countrywide layoffs
http://www.msnbc.msn.com/id/20647388/

Barclays unit EquiFirst to cut subprime jobs
http://www.msnbc.msn.com/id/20484245/

Lehman to fire another 850 workers in mortgages
http://www.msnbc.msn.com/id/20625414/

Land America to Cut 1,100 Jobs
http://www.msnbc.msn.com/id/20483103/

AC9311

I heard about Countryside's layoffs on the radio and remembered your words here. Seemed like it took a while for that info to seep in, or seep out...

I hope this will not affect your job?

Too late, my job was outsourced to India on June 1st. Although I am still employed. I'm on the transition team.

So what are you going to do? PM me. Depending on your background,I might be able to hook yopu up with some advisory consulting work ... if you don't mind traveling to DC every couple of weeks.

quote:

Originally posted by ac9311:
Too late, my job was outsourced to India on June 1st. Although I am still employed. I'm on the transition team.

ac9311 ...

By "transition team" ... are you saying that you have to assist with the outsourcing of your old job???

You got it. We are in the process of transferring all of the systems, hardware and software over to India and Jacksonville Florida.

This is the fourth time in 10 years that Iv'e been through this. Either chapter 11 liquidation, or outsourcing. Information Technology is a very unstable profession to be in.

This message has been edited. Last edited by: ac9311,

__________________________
Africa, my Africa, I have never known you but my face is full of your blood.

- David Diop

quote:

Originally posted by Kweli4Real:
So what are you going to do? PM me. Depending on your background,I might be able to hook you up with some advisory consulting work ... if you don't mind traveling to DC every couple of weeks.

I am trying to get a business off the ground. I am being very calculated in my movements. I am trying to fund it using my own money. I don't want Mr. Charlie involved at all.

I have a product that is currently being field tested. So far I have being receiving good reviews from the brotha's that are using it. Most of whom I have never met. I have been getting my feedback second hand.

I'll send you my resume if you'd like. I'm open to any opportunity. I'm also working my network here. Actually, I was on the road for 13 years. This is the first company that I've worked for in which I haven't travelled.

Five years ago, I was commuting four days per week to Houston. I have no problem travelling. As you can see travelling isn't a problem.

This message has been edited. Last edited by: ac9311,

__________________________
Africa, my Africa, I have never known you but my face is full of your blood.

- David Diop

Interesting facts about this "nation-wide", "sub-prime mortgage", "folks bought more house than they could afford crisis".

It turns out the numbers say that this is not a nation-wide phenomena; rather the foreclosures are centered in four states, California, Nevada, Arizona and Florida. If these state are stripped from the foreclosure numbers, the other 46 states actually show a DECLINE in defaults over last year.

Further, the numbers show the majority of defaults are, for the most part, not sub-prime loans, but rather prime loans [at 60+%].

And finally, the defaults are not folks that bought to much house and/or got a bad loan ... rather, a full third of those in default were investors that had no intention of living in the home.

quote:

http://www.msnbc.msn.com/id/20725063/ cited from the video and quckly confirmed through lending data.

Well, now that's a horse of a different color, now isn't it??

quote:

Originally posted by ac9311:
I believe that these reports are combining all foreclosures not just sub-prime.

That's why I said the above statement. I was basing that off of the fact that all of the loans that the company services were "A" paper loans and the foreclosure rate is high.

Peace....

quote:

Interesting facts about this "nation-wide", "sub-prime mortgage", "folks bought more house than they could afford crisis".

It turns out the numbers say that this is not a nation-wide phenomena; rather the foreclosures are centered in four states, California, Nevada, Arizona and Florida. If these state are stripped from the foreclosure numbers, the other 46 states actually show a DECLINE in defaults over last year.

Kweli, I don't think the above is accurate. Michigan foreclosure rates are accelerating at an alarming rate. Certain counties in Michingan are experiencing increased rates which can be considered as no less than alarming.

Overall, this crisi is very real. If people look at the cycles in real estate they will notice that for over 8 years the realty mortgage bubble grew...Now that it has bursted the effects will be long lasting and devastating to the economy over a very long period of time.

Several markets have seen the adverse effects already, and there is no sign of real recovery on the horizon.

The real question becomes: is a recovery even possible?


Kai