Posted on April 29th, 2008 in Daily Mortgage/Housing News - The Real Story
This is a superb read from Karl Denninger. But, not only do loans go back to the original lender if they have fraud like the writer mentions, they ALSO go back if they have a 1st payment default in the first 6 months following origination in most cases. Some lenders rep & warrant for up to a year. This report is a little light on the fraud associated with ‘Stated Income’ as well. Studies have shown that among stated income loans, 90% lied about their income upward.. 50% of those by more than 5% and 50% by more than 50%. Both 1st payment defaults and fraud are write down wildcards rarely addressed. – Best, Mr Mortgage
Tuesday, April 29, 2008 Caution: Mortgage Explosions Just Starting (And More)
If you think the mortgage mess is over, you’re sadly mistaken. If you’re operating under the premise that the losses have been (mostly) recognized and we are now going to see “write ups” somewhere down the road, you’re more than wrong.You’re delusional. Truth is that the real damage hasn’t even begun. That damage is going to come from…. drum roll…… fraud.