Our old friend Zach Fox has moved on to more illustrious things than the NC Times, he now works for a big-time financial publication back east.
But he hasn’t forgotten us little guys, especially the data geeks:
Jim,
We’re finally sending out some free links as we move toward getting our brand more to the public and not just Wall Street. I thought these stories might interest you and was hoping to piggy back on your ever-growing fame:
I got an update on that infamous Credit Suisse ARM reset chart, along with some interesting speculation from Greg McBride at Bankrate:
http://www.snl.com/interactivex/article.aspx?CDID=A-10770380-12086
I also thought this piece by one of our banking/insurance gurus was interesting. It runs through responses to FDIC’s securitization reform:
http://www.snl.com/InteractiveX/article.aspx?CDID=A-10788544-11055
Also, here is our bare-bones free site that has some TARP info. News is on the left-hand side, let me know if you see any links you can’t click on and would like to check out:
http://www.snl.com/Sectors/Financial-Institutions/FIG/Home/Tarp.aspx
Best,
Zach
“If you look at it, there’s almost probably 5 million borrowers sitting there in some sort of delinquency right now who have yet to be foreclosed upon. So if you say [the Home Affordable Modification Program] is going to save only a small fraction of that, the rest of them have to go through in some form of foreclosure or distressed sale,” Bhattacharya said. “So it’s definitely not over by any means.”
Credit Suisse projects 10 million foreclosures over a five-year period starting in 2008.
I stamp a big “WE’LL SEE” on on this. As long a representatives can buy votes by kicking the can down the street I believe they will.
Soon voters are going to show their anger at the ballot box.
Regarding that now-infamous reset chart: How many of those pigrims have already refi’d or been flushed out?
“As long a representatives can buy votes by kicking the can down the street I believe they will.” The trouble with Socialism is that you eventually run out of other people’s money (Margaret Thatcher).
“Regarding that now-infamous reset chart: How many of those pigrims have already refi’d or been flushed out?”
Doesn’t matter; we all know their houses won’t be showing up as REOs anytime soon. A trillion dollars used to sound like a lot of money.
Capital Gain:
None. That is a current chart.
Capital gain – looks like alot. As referenced in the article:
“Likewise, McBride was cool to the idea that option ARMs could flood the foreclosure rolls. Option ARMs are less concerning, he said, because so many have defaulted already.”
Orb,
You’re misreading the McBride quote. “Defaulted” means something different than “Foreclosed” or “Refinanced”. 46% of the OA’s are 30 days delinquent (In default) and they will be in default until they resolve or become REO. Until the note is retired (through refinance or REO), they stay in the chart.
Chuck
Most of the best guesses I’ve read are that we are only 50% of way through this crisis — which the chart from the post would seem to indicate. What the landscape will look like post 2012 is anybody’s guess.
I’ll go out on a limb and say that when the history books are written, this goes down as the Second Great Depression.
2.Regarding that now-infamous reset chart: How many of those pigrims have already refi’d or been flushed out?
Well, given that the old chart used to show Option Arms peaking at about 17B a month, and now it shows them peaking at 12B a month, id say about 30% are early flushouts.
By the time any particular wave gets here, I would guess its about 40% smaller than originally shown in the 2007 chart.
SD2B.
The formula is not that easy to say “take original amount minus current amount and divide difference by original total to get percentage” by month. The reason it doesn’t work is that unprecedented low rates have extended the recast schedule. Recasts are only based on time when original projects prove to be true… but lower rates have significantly extended the timeline, not reduced the number or amounts. You have to remember that most OAs adjust every 12 months to prevailing indexed values, they only recast when 1 of 2 things happens, either they hit their negative amortization cap (like 120% of original loan balance) or recast date (like 7 or 10 years from original issuance). Lower rates simply stretches out the recasts, it does not mute them.
The calculation is more like “total oas minus current oas and divide difference by original total oas”.
Some of them have been cleared through the system. If you look at total cumulative OA recasts, we can see that about 10-12% of the total have been “flushedout” as of present. Some of those were through REO and some were refinances into fixed or other ARM. The rest of the pain was deferred to a later date, based off of current assumptions of negative amortization or recast dates.
Chuck
Some of them have been cleared through the system. If you look at total cumulative OA recasts, we can see that about 10-12% of the total have been “flushedout” as of present.
Some of them have been cleared through the system. If you look at total cumulative OA recasts, we can see that about 10-12% of the total have been “flushedout” as of present.
Chuck Ponzi – source?
Anon,
I don’t have an exact count because there is not a dataset that comes with that.
The flushed out totals would be the total of OAs from the 2007 chart minus the totals of the 2010 chart all divided by the 2010 total. I show about 90%, but in reality, it could be as high as 15 or 17%. If I had the underlying dataset, I could prove out a number, but I’m set estimating by measuring the totals per month, summing and comparing each dataset totals. Because nothing is precise, it’s an estimation.
I don’t have an exact count because there is not a dataset that comes with that.
As I suspected – thanks…