Friday, January 11, 2008

Exotic Foreclosures

Among the many foreclosure notices that appear in the local papers each week, one notices some of them in this form:

Deutshe [sic] Bank National Trust Company, as trustee for the certificate holders of Soundview Home Loan Trust 2005-OPT3, asset-backed certificate, series 2005-OPT3, Plaintff

and this,
HSBC Bank USA National Association for Nomura Asset Acceptance Corporation Mortgage Pass-through Certificates, Series 2004-AP3, Plaintiff

These are the CDOs and SIVs and other exotic, asset, i.e., mortgage-backed securities into which were placed the sub-prime mortgages that are fueling the implosion of companies like Merrill Lynch, Bear Stearns, Countrywide, and many others.

No money down down, no income verification, interest-only, buy now and wait for the greater fool to show up. It's all come crashing down. I can't feel sorry for anyone in this debacle. It was fueled by greedy buyers meeting greedy mortgage brokers enabled by greedy bankers fooling greedy investors.


Anonymous said...

I do feel sorry for one category who got caught up in this mess: those who innocently bought in the early days of the run-up, thinking they better act quickly before the prices got too high for them to ever afford a place of their own, and ended up having to extend themselves quite a bit to do so.

Those folks were NOT greedy flippers, just people who didn't realize what was eventually going to happen, and just wanted a piece of the American Dream (to own their own home).

Many of those folks bought a house they could barely afford and then watched as prices climbed still further. "Whew!" they thought -- "I got in just under the wire."

But now, for whatever reason (e.g., job change, forced move, medical situation, whatever) they find they have to sell. And they can't, because prices have tumbled below what they THOUGHT was a good deal when they bought the place. Ultimately, because they can't stick it out (they HAVE to unload it) they'll be taking a big loss.

They weren't greedy, they weren't especially stupid (costs were increasing and all the Sunday Morning Quarterbacks hadn't yet starting pointing out how it was all going to come crumbling down). But they're going to pay dearly for trying to own their own home.

There are lots of these people out there. And there but for the grace of God goes I....

Robert Kelly said...

Thanks, David. You almost always have a reasonable counterpoint view when you comment on my posts here. The people you speak of are often the victims of someone else's greed rather than being the greedy ones themselves.

It's a valid distinction.

Anonymous said...

Ive been reading about the housing problems in Key West and vincinity but when I'm searching for rentals I find some of them are very reasonably priced. Am I missing something??? My husband and I want to move to the Keys once we sell our summer home in Maine (will keep NH house). We'd like to live there full time so I've been scouring the classified ads for housing and employment ops, but fear with what I've been reading that maybe I'm not seeing the whole picture?

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