The guys who made the video that aired on February 8th describing the IndyMac/FDIC/One West deal have responded to the FDIC’s press release, and are standing by their story:
Apparently the FDIC doesn’t pay a penny to One West unless losses exceed $2.5 billion, but who knows if that’s possible, or how close they are to hitting that number. There isn’t a smoking gun yet, and until CR lends some credibility to this story, it going to sound like a nothing-burger to me.
The worst thing that is going to happen is that one day it’ll slip out that the FDIC passed a few billion dollars to One West to honor the agreement, and there will be outrage for a day or two.
By then, we’ll be numb to it (if we’re not already?).
I started walking around the neighborhoods that I want to buy a house in this weekend. I noticed something a little odd. A large number of the houses that were on the market last summer/fall are STILL sitting empty and they are NOT currently listed on the mls. I’m not going to pretend anymore that I understand why these properties aren’t on the market. I’m sure every one has it’s own special reasons. But, as a buyer seeing this kind of thing isn’t a ringing endorsement of prices going up.
* In one particular house I’m nearly positive the Realtor has moved in with her kid. Unless shes the type of buyer that like to sleep overnight in a house with no furniture and do showings for neighbors on weekends.
Yeah Jim.. who knows if they will hit that loss? The FDIC says it has not been paid anything against the 2.5 billion loss provision. And they say this loss provision only applies to the loans that were actually held by Indymac versus the ones that they were just servicing. They say the Indymac owned notes were only 7% of the total. I can’t find the actual totals in dollar amount of loans that these numbers represent, but it seems to me that the losses would need to be significant before this provision kicks in.
And I have seen numerous loans modified by Indymac in accordance with HAMP. So, the question remains.. is OneWest/Indymac incentivized to foreclose OR to modify?
Their story seems solid. They have a lot more details than CR, which is less about investigative reporting than it is about general investing knowledge. CR probably won’t do this unless it’s a widespread problem in ALL banking sectors.
However, I take exception with the video for one “assertion”; that the economy won’t recover until the housing market recovers… Seriously? That’s the same kind of BS that the banking cartel is shoveling into congress. Until we get past platitudes and talk about what’s REALLY wrong with our economy (malinvestment) we’ll never be able to have a long-term sustainable recovery to speak of. We really will turn out like Japan. Get used to falling asset prices, this could take a long time.
Shadash, interesting observations. That’s kind of what I’m referring to when I say there’s a change going on. It sounds like those sellers have thrown in the towel. I bet those homes were way overpriced when listed. Now most of the buyers left are conservative ones who aren’t about to save a drowning homeowner. The gig is up for a lot of these clowns. Those empty homes have to come on the market sometime. Likewise, people won’t get free rent forever. And Bernanke will have to raise rates at some point.
If you were looking to buy in O’side or Temecula, there would be no reason to wait. I think towns like those represent the majority of the country. From a national perspective, the housing crisis almost over. The bailouts will end along with the money printing (hopefully,) and places like Coastal North County will have to face the music real soon. And that’s why I think conservative and responsible buyers are taking the leverage.
So now both sides of the RE bubble are lying outright? Sweet
I agree with Chuck. It will take 10 years for the home building industry to recover from their spree of overbuilding. If this is a cornerstone of “recovery” we have a long slog ahead of us. Makes me very, very glad I bought in 2002 before it went totally insane and I bought a house I could afford even at half my income. I can’t even rent as cheaply in this neighborhood as I pay on my mortgage.
In the long run, those who played it safe may actually win – despite the free rent program and associated graft.
I guess it’s cheaper to buy the house you want at foreclosure rather than buying it through a short sale with OneWest Bank. More info at:
>So now both sides of the RE bubble are lying outright? Sweet
Two years ago, I’d have thought that a major step up.