For those of you who missed 60 minutes last night, they did a 13 minute segment on Paul Bishop a whistle blower at World Savings Bank (which was Golden West Financial's bank subsidiary) who tried to alert bank management to the risks associated with the Pick-a-Payment Option ARM mortgages.
Wachovia bought out the bank near the peak of the market at $25 billion
"World of Trouble" (13 minutes)
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Showing posts with label Wachovia. Show all posts
Showing posts with label Wachovia. Show all posts
Monday, February 16, 2009
Sunday, December 28, 2008
Wells Fargo / Wachovia Option Arms
The December-2008 Wells Fargo Investor Presentation had an interesting table on page #19
The key content was:
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WB - Pick-a-Pay ARMs
Note: WB = Wachovia Bank & "Pick-a-Pay ARMs" = "Option ARM"
Now considering that according to http://www.ofheo.gov California has had 6 consecutive quarters of declines in housing values with Q3-2008 dropping ~21% in the last year. That means there are plenty of Californians with Option-ARMs that have zero (or negative) equity in there homes, and for the loans that Wells Fargo acquired via Wachovia, their losses "should" crest in 2010.
Now only time will tell if the loan loss estimates ($36 billion / 29% of WB's outstanding Option-ARMs) is conservative enough)
The key content was:
*****************************************
WB - Pick-a-Pay ARMs
- $122bn outstanding:
- 58% secured by California real estate
- Weighted average LTV at origination 76%
- 80%+ stated income with average 675 FICO
- Recast at 125% loan balance or 10 years minimizes contractual payment shock
- Remaining losses after purchase accounting to peak in 2010
- Loss mitigation program appears to have significant potential. Life of loan loss projections do not incorporate any loss mitigation program impacts
- Life of loan loss estimated at $36bn = 29% of outstanding
Note: WB = Wachovia Bank & "Pick-a-Pay ARMs" = "Option ARM"
Now considering that according to http://www.ofheo.gov California has had 6 consecutive quarters of declines in housing values with Q3-2008 dropping ~21% in the last year. That means there are plenty of Californians with Option-ARMs that have zero (or negative) equity in there homes, and for the loans that Wells Fargo acquired via Wachovia, their losses "should" crest in 2010.
Now only time will tell if the loan loss estimates ($36 billion / 29% of WB's outstanding Option-ARMs) is conservative enough)
Q3-2008 vs Q3-2007 Alt-A Mortgage Originators
Q3-2008 (vs. Q3-2007) saw an even bigger decline in Alt-A mortgage originations than the Q2-08 vs. Q2-07 data point. The Top-10 Alt-A companies underwrote $1.55 Billion in Alt-A mortgages in Q3-2008, which is an 88% decline from the $13.2Billion of business done in Q3-2007.
Again, ResCap (GMAC) and Chase were the biggest drivers of the decline--Down $4.7Billion and $2.4Billion respectively.
Top-10 Alt-A Mortgage Originators Q2-2008 vs Q2-2007
The Top-10 Alt-A mortgage originators in Q2-2008 did 81% fewer Alt-A mortgages in Q2-2008 vs. Q2-2007, as Alt-A mortgages in Q2-2008 amounted to $2.6 billion vs $13.6 billion from those same companies in the prior year; with the biggest cut-backs coming from Chase and ResCap (GMAC) Mortgage.
Monday, December 22, 2008
Q3 2008 Top 10 Mortgage Originators
The Top-10 mortgage originators in Q3-2008 originated $230 billion of mortgages in Q3-2008, which is 29% less than the $323 billion of business that they did in Q3-2007.
It's also interesting to note that Bank of America's increase in business was driven by their acquisition of Countrywide Mortgage. In the quarter, Washington Mutual (WaMu) had the distinction of having the largest drop in business--on both dollar terms ($24 billion less) and percentage decrease (down 71%).
It's also interesting to note that Bank of America's increase in business was driven by their acquisition of Countrywide Mortgage. In the quarter, Washington Mutual (WaMu) had the distinction of having the largest drop in business--on both dollar terms ($24 billion less) and percentage decrease (down 71%).
Sunday, December 21, 2008
Top 10 Mortgage Providers Originate much fewer loans in Q2-2008 vs Q2-2007
Comparing Q2-2008 Mortgage origination figures with Q2-2007, you can see that there was a significant decrease in mortgages underwritten.
The top-10 Mortgage originators did $320 billion in originations in Q2-2008 compared to $507 billion, from those same companies in Q2-2007. In dollar terms Countrywide shrunk from $130 billion to $59 billion; While Washington Mutual (WaMu) saw the biggest percent decline--Down 74%.
The top-10 Mortgage originators did $320 billion in originations in Q2-2008 compared to $507 billion, from those same companies in Q2-2007. In dollar terms Countrywide shrunk from $130 billion to $59 billion; While Washington Mutual (WaMu) saw the biggest percent decline--Down 74%.
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