Comments on: JPM Chase – Major Mortgage Loan Default Spike

By: BertDilbert

BertDilbert — Mon, 03 Nov 2008 02:05:19 +0000

Well California says they have a 10% budget shortfall so far and since we are going to be 50% into the budget, that means we are 20% short in the second half…. Get your snorkels out. Job cuts and more taxes on the horizon should accelerate the foreclosure problem.

I heare the clock ticking on CA’s debt ratings.

By: JJ

JJ — Sat, 01 Nov 2008 18:57:01 +0000

On a national basis this is an ugly problem because employment was the last leg holding the house of cards together. Forget the election, certain industries and regions in this country are toast and will be lousy for the next decade or so. Bank on it.

This crisis is national but really more of a regional one in certain states but the bleed over effect and nationalization and socialization of this problem makes it mine too even if I live in an area that will not get hit as hard.

By: peterb

peterb — Sat, 01 Nov 2008 17:46:04 +0000

I’m leaning towards rising unemployment as making this an inescapable checkmate for the banks. As modification most likely will not cure a loan where the borrower is unemployed. And as this drags on, the walk-aways will escalate along with the number of forced foreclosures. Not a pretty picture.

By: Justin

Justin — Sat, 01 Nov 2008 17:21:02 +0000

Chase has been in trouble for a long time and their purchase of WAMU and Bear Stearns makes as much sense as buying a Ford Pinto for the purpose reliability. Thanks to our corrupt Government they are still in business much like BOA and WFB and Citi it’s a complete scandal.

By: Jim

Jim — Sat, 01 Nov 2008 15:30:14 +0000

You are a god and very blessed to have such a perfect life. I wish I was you.

By: BertDilbert

BertDilbert — Sat, 01 Nov 2008 14:58:18 +0000

That will likely depend on how successful they are in doing modifications. The slower they act, the further prices are going to get pushed down and the bigger the hit they are going to have to take on the modifications. What the banks are willing to do is likely going to depend on what their balance sheets are going to look like once they mark it down. If the banks don’t have the assets to do the modifications, then they will continue to hide and shift while offering half measures to consumers.

My guess is that home sales and prices did not do well in October. Compounding the problem is that we are in a recession and banks are going to have to be dealing with borrowers with job losses.

By: peterb

peterb — Sat, 01 Nov 2008 08:59:09 +0000

Well now, if I were to think of this in terms of forecasting 2009 foreclosures, I’d conclude it may be worse than 2008. This is based on the assumption that very few NOD’s are getting cured and that it’s now about 12 months from NOD to NOT. This is what I’ve been hearing. Anyone know how close to the mark my assumptions may be?

By: Next Shoe to Drop

Next Shoe to Drop — Sat, 01 Nov 2008 07:29:01 +0000

@ JJ

LMAO! That is some great writing! Love your style.

Mr. Mortgage, I’ve recommended your youtube vids to everyone I know, and religiously read your posts — you’re doing a great service to everyone, and I thank you!

By: Patient Renter

Patient Renter — Sat, 01 Nov 2008 05:56:02 +0000

Is this good news or bad news?

I don’t know if it will be effective in the end, but isn’t it a step in the right direction?

What does this mean for the market going forward?

By: BertDilbert

BertDilbert — Sat, 01 Nov 2008 05:12:08 +0000

Mr. Mortgage

Are you saying that JP Morgan put out the most poisonous products at the end of the boom? Or is the increase more due to an acceleration late into the game?

Or are you suggesting they had the lowest standards of approvals, low or no doc?

Another question. The fed currently has sub prime and Alt A loans on the website, yet they have not included jumbo’s on their map. What is the size of the Jumbo market compared to Alt A?

Last, the Alt A is primarily California in dollar volume. Are the Jumbo % originated in CA similar in concentration in dollar volume like the Alt A or is it bigger/smaller?