Comments on: Mozilo, O’neal & Prince Set to Testify before the House Committee on Oversight and Government Reform http://loanworkout.org/2008/02/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/ Loan Modification & Home Loan News Mon, 22 Mar 2010 04:55:03 -0700 http://wordpress.org/?v=2.9.2 hourly 1 By: Gary http://loanworkout.org/2008/02/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4581 Gary Mon, 03 Mar 2008 00:50:19 +0000 http://loanworkout.org/2008/02/27/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4581 Yes consumers drive the economy, consumer spending accounts for almost 70% of GDP. Thats fine, i won't argue with that. And i would agree with the so called wealth-effect, that there is a causal relationship between the level of consumer spending and the amount of borrowers' home equity. and i would also agree declining home equity likely would have a negative effect on consumer spending. the more i think about your comment, the more you sound like the national home builders assocation. I listened to them last week try to persuade the senate banking committee that the government and fed should do everything in their collective powers to prevent house price declines because of their associated effect on consumer spending. So we're going to bail out everyone to keep consumer spending? That's the argument? We can discuss this but i think it's off-topic from my original post. My original point is housing is overvalued, we had an asset bubble, and we should allow the market to correct without government influence. Examine the relationship of incomes vs. house prices over the last five years and you'll immediately recognize how distorted that relationship became over the same period. That would indicate a correction is necessary, that either house prices must decline further or incomes must rise. Either could occur of course, but i would argue further house price declines are more likely given the current imablance of supply & demand in the market. Further, in my opinion, market forces are strong enough that inevitably we will have a correction regardless of what the fed & gov't do. So, with that in mind, why not invite the correction now rather than try to delay it and prolong its effects through such futile efforts as the hope now alliance, FHA Secure, bankruptcy law reform, as well as changing the portfolio caps, loan limits and capital requirements of the GSEs. another point i want to make-- Many in government and other areas complain about a lack of liquidity in the secondary RMBS market and its associated effects (e.g., lack of available and affordable housing credit). That lack of liquidity is caused in part by the uncertainty among RMBS investors. The uncertainty among RMBS investors stems from many factors, including the obvious credit risk concerns, as well as potential bankruptcy reform and loan modifications. Cramdowns and interest rate freezes are a real threat to RMBS investors. The irony is that the people complaining about a lack of liquidity in the secondary market and its associated effects are the same people suggesting and encouraging bankruptcy reform and mass loan modifications. Yes consumers drive the economy, consumer spending accounts for almost 70% of GDP. Thats fine, i won’t argue with that. And i would agree with the so called wealth-effect, that there is a causal relationship between the level of consumer spending and the amount of borrowers’ home equity. and i would also agree declining home equity likely would have a negative effect on consumer spending. the more i think about your comment, the more you sound like the national home builders assocation. I listened to them last week try to persuade the senate banking committee that the government and fed should do everything in their collective powers to prevent house price declines because of their associated effect on consumer spending. So we’re going to bail out everyone to keep consumer spending? That’s the argument? We can discuss this but i think it’s off-topic from my original post.

My original point is housing is overvalued, we had an asset bubble, and we should allow the market to correct without government influence. Examine the relationship of incomes vs. house prices over the last five years and you’ll immediately recognize how distorted that relationship became over the same period. That would indicate a correction is necessary, that either house prices must decline further or incomes must rise. Either could occur of course, but i would argue further house price declines are more likely given the current imablance of supply & demand in the market. Further, in my opinion, market forces are strong enough that inevitably we will have a correction regardless of what the fed & gov’t do. So, with that in mind, why not invite the correction now rather than try to delay it and prolong its effects through such futile efforts as the hope now alliance, FHA Secure, bankruptcy law reform, as well as changing the portfolio caps, loan limits and capital requirements of the GSEs.

another point i want to make–
Many in government and other areas complain about a lack of liquidity in the secondary RMBS market and its associated effects (e.g., lack of available and affordable housing credit). That lack of liquidity is caused in part by the uncertainty among RMBS investors. The uncertainty among RMBS investors stems from many factors, including the obvious credit risk concerns, as well as potential bankruptcy reform and loan modifications. Cramdowns and interest rate freezes are a real threat to RMBS investors. The irony is that the people complaining about a lack of liquidity in the secondary market and its associated effects are the same people suggesting and encouraging bankruptcy reform and mass loan modifications.

]]> By: Moe http://loanworkout.org/2008/02/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4584 Moe Sun, 02 Mar 2008 23:20:55 +0000 http://loanworkout.org/2008/02/27/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4584 Yes, the damage is done. But the damge needs to be mitigated or we might be heading into a massive DEPRESSION. The writing is on the wall. Don't forget it is the borrowers who are in turn "consumers" who what Gary? Drive the economy sir. That's exactly what they do. Not banks. Not Bernake. Not Paulson and not Bush. It's the people and the power needs to go back in the peoples hands. What do we need andother S & L another Enron, Another LENDRON?????? It's obvious "some" of corporate America has taken the citizens of this country on several billion dollar swindles and this time, we need to put a stop to this BS. Yes, the damage is done. But the damge needs to be mitigated or we might be heading into a massive DEPRESSION. The writing is on the wall.

Don’t forget it is the borrowers who are in turn “consumers” who what Gary? Drive the economy sir. That’s exactly what they do. Not banks. Not Bernake. Not Paulson and not Bush.

It’s the people and the power needs to go back in the peoples hands. What do we need andother S & L another Enron, Another LENDRON??????

It’s obvious “some” of corporate America has taken the citizens of this country on several billion dollar swindles and this time, we need to put a stop to this BS.

]]> By: Gary http://loanworkout.org/2008/02/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4583 Gary Sun, 02 Mar 2008 23:02:25 +0000 http://loanworkout.org/2008/02/27/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4583 Get over it. Foreclosures are here to stay. Home price declines are here to stay. No amount of government intervention will change materially the balance of the supply of and demand for homes. Look at the stats (e.g. record high supply or existing & new homes, record low sales rates for existing & new homes, record high vacancy rates). What possible conclusion could you draw from those data? Borrowers were accomplices to the current condition, rather than victims. Get over it. Foreclosures are here to stay. Home price declines are here to stay. No amount of government intervention will change materially the balance of the supply of and demand for homes. Look at the stats (e.g. record high supply or existing & new homes, record low sales rates for existing & new homes, record high vacancy rates). What possible conclusion could you draw from those data? Borrowers were accomplices to the current condition, rather than victims.

]]> By: Michael http://loanworkout.org/2008/02/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-10355 Michael Sun, 02 Mar 2008 20:31:45 +0000 http://loanworkout.org/2008/02/27/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-10355 What is that supposed to mean? What is that supposed to mean?

]]> By: million http://loanworkout.org/2008/02/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4585 million Sun, 02 Mar 2008 16:53:54 +0000 http://loanworkout.org/2008/02/27/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4585 Wow, OCC actually got off their neutered arse and did something? When they finally issue a monthly report and we can see what kind of "insight" they provide, then I'll believe the OCC is not run by black-hearted scumbags. Wow, OCC actually got off their neutered arse and did something? When they finally issue a monthly report and we can see what kind of “insight” they provide, then I’ll believe the OCC is not run by black-hearted scumbags.

]]> By: P.T.Pluhar http://loanworkout.org/2008/02/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4582 P.T.Pluhar Sun, 02 Mar 2008 14:12:59 +0000 http://loanworkout.org/2008/02/27/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4582 It about time someone in government does what they are paid to do! Hope this is real discovery and not more lies, corruption or the band-aid approach. It about time someone in government does what they are paid to do! Hope this is real discovery and not more lies, corruption or the band-aid approach.

]]> By: John Fritsche http://loanworkout.org/2008/02/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4580 John Fritsche Sun, 02 Mar 2008 02:02:19 +0000 http://loanworkout.org/2008/02/27/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-4580 Thanks for the article. I wonder when BAC takes over CountryWide if they will be required to include as a separate report the CountyWide holdings? As a holder of ResCap LLC bonds, I also wonder why the GMAC bank was not required to begin reporting as their bonds are junk and worth about half of their par value. GMAC is a large mortage oringinator and buyer and so I would hope to see some clarity on their part. Thanks for the article. I wonder when BAC takes over CountryWide if they will be required to include as a separate report the CountyWide holdings?

As a holder of ResCap LLC bonds, I also wonder why the GMAC bank was not required to begin reporting as their bonds are junk and worth about half of their par value. GMAC is a large mortage oringinator and buyer and so I would hope to see some clarity on their part.

]]> By: Moe http://loanworkout.org/2008/02/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-10354 Moe Wed, 27 Feb 2008 23:06:58 +0000 http://loanworkout.org/2008/02/27/mozilo-oneal-prince-set-to-testify-before-the-house-committee-on-oversight-and-government-reform/#comment-10354 um..... I don't recall even posting this. um….. I don’t recall even posting this.

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