Worst Conditions Ever Seen by the Modern Mortgage Industry
Countrywide, the nation's No. 1 home lender, said yesterday that it would cut as many as 12,000 jobs, or about 20% of its workforce. It said the downturn in the housing market and the credit crunch related to sub-prime loans have created the worst conditions ever seen by the modern mortgage industry.
Countrywide Chairman Angelo Mozilo said in a letter to employees yesterday. "Unfortunately, the only way to accomplish this is to make significant reductions in our workforce, in fact, this current cycle is certainly the most severe in the contemporary history of our industry."
Our first post about possible Countrywide layoffs was 9-26-06 National Home Price Drop..Catching up to San Diego’s Continuing Slide. Our other post about Countrywide was: Subprime Loan Implosion, Subprime Home Mortgage Lenders in Big Trouble, Largest US mortgage lender Takes a Big Foreclosure Hit, #1 US Mortgage Company to Go Bankrupt?, Countrywide Has Started layoffs …Thousands Could Be at Risk
Also, IndyMac Bancorp (the second-biggest mortgage company), National City Corp. and Lehman Brothers Holdings Inc. have been cutting staff. At least 100 mortgage companies have sought buyers or halted lending since the start of 2006, and foreclosures in the second quarter rose to a record, according to the Mortgage Bankers Association in Washington.
Adding to this already dire situation is the fact that mortgage defaults have started moving beyond the sub-prime sector: The Mortgage Bankers Assn. noted a rise in foreclosures on supposedly high-quality prime loans that were used by speculators who put little money down on houses in California, Nevada, Arizona and Florida, and now are walking away due to lower home prices. [tags]mortgage market,housing market,real estate market,real estate bubble[/tags] Realtors San Diego
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Believing anything you read in the newspaper is wrong.
Understand these are the same people who said real estate would go to the moon. Never go down, buy now or you’ll be left behind.
When will it be time to step in and buy?
When the front page headline is a record number of people turning in their keys because they cannot sell their homes, and there are too many homes for sale in the neighborhood.
The newspapers should be used as a CONTRARY indicator.
If you want to keep up with what is REALLY going on ignore media, CNBC, and go to web sites that are years ahead of everyone else.
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Stagflation is the problem going forward, not recession. If our gdp is 70% consumer spending, there is no value added to the society. The big muckimucks of wallstreet should consider how to invest in areas that increases value and not just consumer spending!! That is what will take out of stagflation.
George
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It’s simple. House prices have to come down to pre-bubble level. It’s hard to take for a lot of folks. But that’s reality.
Rachel
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