Exposure

Tip o’ the hat to Housing Panic.

You too can bail out of that pesky sub-prime mortgage

According to Barry Ritholtz of Big Picture, an article written for the AP wire service (for which he was interviewed) hasn’t gotten enough notice- yet. Maybe it’s too dangerous, and it’s been suppressed!

No, seriously, this item apparently contains a pretty cool angle that bisects the industry’s slant, pretty much reminding us we have a law about how any mortgage, even a sub-prime mortgage, can be rescinded- transforming the lender into just another creditor (not the primary).

The pump-and-dump near-boiler room nature of most sub-prime mortgage brokers probably means loans were often rushed into being, without proper documentation. This just might be the saving grace for some grieving “homeowners” who are upside down. As we now know, many do regret ever taking on that nasty, vicious, landed-serf retro death-stalking sub-prime mortgage.

Hell, there might even be an escape from a conventional mortgage, considering the Truth-in-Lending Act (TILA) is really quite clear about disclosure, for all types of loans.

As home values plummet, it is natural to expect that some people might want to consider consulting with a legal professional with expertise (since they didn’t read their contract in the first place), ascertaining if this enhances their position- and packing a parachute for later use, should their loan obligation becomes too onerous.

Maybe paralegals can take on some extra work; who knows, this might even become a growth industry over the next few years.

This article hasn’t appeared yet in any of the news sources I frequent (e.g. Yahoo), but since it is AP it’s bound to appear sooner or later. I’ll keep an eye and an ear open and link to it when it does.

This was a public service announcement.

Another Nice Rant

What I think they don’t get is that finance has virtually become the US economy — if you subtract it, there is nothing left besides hair-styling, fried chicken, and colonoscopies. By “righting the economy” do people mean the ability to keep running a transparently fraudulent set of rackets that have nothing whatever to do with financing real productive activity?

I concur with Clusterfuck Nation (a handle I wished I’d thought up first).

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Relunctant class warriors – good on ya
And yet another:

Somewhere in the Hamptons a high-roller is cursing his cleaning lady and shaking his fists at the lawn guys. The American poor, who are usually tactful enough to remain invisible to the multi-millionaire class, suddenly leaped onto the scene and started smashing the global financial system. Incredibly enough, this may be the first case in history in which the downtrodden manage to bring down an unfair economic system without going to the trouble of a revolution.

A sort of relunctant revolution, then.

Then, in a diabolically clever move, the poor–a category which now roughly coincides with the working class–stopped shopping. Both Wal-Mart and Home Depot announced disappointing second quarter performances, plunging the market into another Arctic-style meltdown. H. Lee Scott, CEO of the low-wage Wal-Mart empire, admitted with admirable sensitivity, that “it’s no secret that many customers are running out of money at the end of the month.”

A Minsky Moment to be sure (stability fosters instability).

It gets worse though. While with one hand the high-rollers, H. Lee Scott among them, squeezed the American worker’s wages, the other hand was reaching out with the tempting offer of credit. In fact, easy credit became the American substitute for decent wages. Once you worked for your money, but now you were supposed to pay for it. Once you could count on earning enough to save for a home. Now you’ll never earn that much, but, as the lenders were saying–heh, heh–do we have a mortgage for you!

Looks like the squeezers shall soon be squeezed themselves.

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It’s like deja vu all over again
Heckuva job, Stickler.

After his nomination was twice rejected by the Senate, President Bush gave Richard Stickler the mine safety job with a recess appointment.

That’s a presidential appointment made when congress is not in session.

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Karl Rove had a step dad
His step dad had a cock ring.

This gent has it in his possession.

Stange bedfellows indeed.

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Now for a humorous take on the entire situation
Mr.  Carroll sums it up nicely applying some good old American horse sense.

Nice Rant

Stop Making Sense!

No Tears Will I Shed

… for those Cunts at Countrywide(tm).

Liars. Thieves. Rats. Sinking Ship. Dump Stock.

The meltdown? It’s clearly the fault of the Republican party. ;^)

Tuesday Morning Coming Down Hard

What does it take to quit the credit crack addiction cold turkey? First step: admitting there is a problem. Seven signs of credit addiction.

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Cool graphic of where the pain resides (or soon will)
A Spectator’s pictorial guide to the housing bust and hedge fund meltdown [NYT].

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Never a borrower nor a lender be
One Santa Ana neighbodhood deals with subprime fallout [OCR].

“I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.”

Touché.

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Prescient Essence
Are we heading toward another Depression? Is anyone out there old enough to remember it (of course not), or have parents or grandparents whose lives were deeply impacted by the Great Depression? If not, here’s a concise and well researched page that helps explain what made it all come about. Maybe we’ll avoid it this time… but a lot of the same factors are at play, and much of what went on then is eerily familiar now.

Yeah, I’d say that’s about right

Speaking to the 2008 presidential election:

The candidate who can tap into the frustration around collapsing home markets and the proliferation of unsustainable risk to the economy will be the next President of the United States.

Cuteness Alert

What a screwy business

… is mortgage backed securities. Are there any lenders who still hold their own paper? My suspicion is no, each and every mortgage is handed on to be chopped into hamburger.

Whenever home building gets as fierce as it it recently did, you gotta expect that quality will suffer. On top of that, home contruction in general has gotten worse, not better, since the 1960’s, not better.