Coastal Funding's Blog

Got Snickers??? Enough Is Enough!!!

Coastal Funding Corp. — Thu, 21 Aug 2008 14:12:00 -0700

Maker of Snickers and M&Ms is raising prices

HARRISBURG, Pa. -The maker of Snickers bars and M&Ms candies says it is raising prices on various items to offset the higher costs of raw materials, packaging and energy. The statement issued this week by Mars follows a similar announcement by its larger rival, The Hershey Co. The privately held Mars did not say which products will go up in price, or by how much. But it said the majority of the price increases will take effect Oct. 17, while several other changes will be introduced through next March.

I have to pay more for gas...

I have to pay more for milk...

Now, I have to pay more for my candy...

Who's drivin this milk wagon? Someone else needs to take the wheel. Fast... My dollar isn't worth anything and my Snickers is made of gold. What are we supposed to do???

Fannie, Freddie Drag Down Stocks

Coastal Funding Corp. — Mon, 18 Aug 2008 14:58:26 -0700

By Peter A. McKay Word Count: 780 | Companies Featured in This Article: Fannie Mae, Freddie Mac, General Motors, Hewlett-Packard, financial sector, Lennar, D.R. Horton, Toll Brothers

Renewed worries about troubled mortgage lenders Fannie Mae and Freddie Mac sank the financial sector, which in turn led the broader stock market lower Monday.

The Dow Jones Industrial Average was recently down nearly 186 points, off 1.6%, at 11473.53. Each of its financial components declined at least 3%. General Motors tumbled nearly 6% and Hewlett-Packard declined more than 3%.

Fannie and Freddie plummeted more than 18% each in the wake of a Barron's article saying that it is increasingly likely that the Treasury Department will recapitalize the two giants, a move that would render the holdings of existing shareholders ...

Coastal Funding Corporation: SUB-PRIME!!!!

Coastal Funding Corp. — Mon, 18 Aug 2008 14:42:56 -0700

SUB-PRIME HAS RETURNED!!!!

COASTAL FUNDING CORPORATION IS NOW OFFERING:

STATED INCOME, STATED ASSET
CREDIT SCORES FROM 500
UP TO 102% FINANCING

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OFFICE: 843-903-5090

FAX: 843-903-0101

Coastal Funding Corporation: SUB-PRIME!!!!

Coastal Funding Corp. — Mon, 18 Aug 2008 14:35:43 -0700

SUB-PRIME HAS RETURNED!!!!

COASTAL FUNDING CORPORATION IS NOW OFFERING:

STATED INCOME, STATED ASSET
CREDIT SCORES FROM 500
UP TO 102% FINANCING

CALL US TODAY FOR MORE INFORMATION...

OFFICE: 843-903-5090

FAX: 843-903-0101

Coastal Funding Corporation: SUB-PRIME!!!!

Coastal Funding Corp. — Mon, 18 Aug 2008 14:31:01 -0700

SUB-PRIME HAS RETURNED!!!!

COASTAL FUNDING CORPORATION IS NOW OFFERING:

STATED INCOME, STATED ASSET
CREDIT SCORES FROM 500
UP TO 102% FINANCING

CALL US TODAY FOR MORE INFORMATION...

OFFICE: 843-903-5090

FAX: 843-903-0101

Coastal Funding Corporation: SUB-PRIME!!!!

Coastal Funding Corp. — Mon, 18 Aug 2008 14:29:37 -0700

SUB-PRIME HAS RETURNED!!!!

COASTAL FUNDING CORPORATION IS NOW OFFERING:

STATED INCOME, STATED ASSET
CREDIT SCORES FROM 500
UP TO 102% FINANCING

CALL US TODAY FOR MORE INFORMATION...

OFFICE: 843-903-5090

FAX: 843-903-0101

Coastal Funding Corporation: SUB-PRIME!!!!

Coastal Funding Corp. — Mon, 18 Aug 2008 14:25:48 -0700

(edit/delete)

SUB-PRIME HAS RETURNED!!!!

COASTAL FUNDING CORPORATION IS NOW OFFERING:

STATED INCOME, STATED ASSET
CREDIT SCORES FROM 500
UP TO 102% FINANCING

CALL US TODAY FOR MORE INFORMATION...

OFFICE: 843-903-5090

FAX: 843-903-0101

Coastal Funding Corporation: SUB-PRIME!!!!

Coastal Funding Corp. — Mon, 18 Aug 2008 14:24:49 -0700

(edit/delete)

SUB-PRIME HAS RETURNED!!!!

COASTAL FUNDING CORPORATION IS NOW OFFERING:

STATED INCOME, STATED ASSET
CREDIT SCORES FROM 500
UP TO 102% FINANCING

CALL US TODAY FOR MORE INFORMATION...

OFFICE: 843-903-5090

FAX: 843-903-0101

Coastal Funding Corporation: SUB-PRIME!!!!

Coastal Funding Corp. — Mon, 18 Aug 2008 14:21:17 -0700

Coastal Funding Corporation: SUB-PRIME!!!! (edit/delete)

SUB-PRIME HAS RETURNED!!!!

COASTAL FUNDING CORPORATION IS NOW OFFERING:

STATED INCOME, STATED ASSET
CREDIT SCORES FROM 500
UP TO 102% FINANCING

CALL US TODAY FOR MORE INFORMATION...

OFFICE: 843-903-5090

FAX: 843-903-0101

Coastal Funding Corporation: SUB-PRIME!!!!

Coastal Funding Corp. — Mon, 18 Aug 2008 14:18:34 -0700

SUB-PRIME HAS RETURNED!!!!

COASTAL FUNDING CORPORATION IS NOW OFFERING:

STATED INCOME, STATED ASSET
CREDIT SCORES FROM 500
UP TO 102% FINANCING

CALL US TODAY FOR MORE INFORMATION...

OFFICE: 843-903-5090

FAX: 843-903-0101

Read This!!! Very Important...

Coastal Funding Corp. — Mon, 21 Jul 2008 10:59:09 -0700

FDIC Faces Mortgage Mess
After Running Failed Bank

Subprime Lender
Made Problem Loans
On Regulators' Watch By MARK MAREMONT
July 21, 2008; Page A1

Federal officials heap much of the blame for the subprime mortgage mess on lenders, claiming they recklessly made too many high-cost home loans to borrowers who couldn't afford them.

It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court.

The unusual situation, which is still bedeviling bank regulators, stems from the 2001 seizure by federal officials of Superior Bank FSB, then a national subprime lender based in Hinsdale, Ill. Rather than immediately shuttering or selling Superior, as it normally does with failed banks, the Federal Deposit Insurance Corp. continued to run the bank's subprime-mortgage business for months as it looked for a buyer. With FDIC people supervising day-to-day operations, Superior funded more than 6,700 new subprime loans worth more than $550 million, according to federal mortgage data.

The FDIC then sold a big chunk of the loans to another bank. That loan pool was afflicted by the same problems for which regulators have faulted the industry: lending to unqualified borrowers, inflated appraisals and poor verification of borrowers' incomes, according to a written report from a government-hired expert. The report said that many of the loans never should have been made in the first place.

FROM THE CASE FILINGS
• Beal Bank laid out its legal case in a Nov. 19 filing in the U.S. District Court in Washington, D.C. • The FDIC filed this response to Beal's suit at the same court in late April 2008. • In an undated internal FDIC assessment. that Beal Bank obtained and filed in court in June, the FDIC acknowledged "numerous appraisal deficiencies" in the portfolio it sold to Beal and discussed its legal vulnerability. Points of interest: Pages 8-11 summarize the final report of an outside expert; pages 16-17 pages 16-18 discuss appraisal, fraud and other problems; pages 26-27 consider the FDIC's "poor" legal situation. The handwritten notes were in the version filed in court; it's unclear who added them. • One exhibit filed in the case by Beal Bank was a May 2004 report to the FDIC from an outside expert reviewing the portfolio sold to Beal. • The FDIC filed an excerpt of what it said was a final version of the 2004 expert's report, which concluded that almost 19% of the loans sold to Beal contained material breaches of the warranties (pages 16-24). • Another internal legal analysis shows the FDIC recognized problems with fraud in some loans sold to Beal.

Hundreds of borrowers who took out Superior subprime loans on the FDIC's watch -- some with initial interest rates higher than 12% -- have lost their homes to foreclosure, data on the loans indicate.

Banking regulators are grappling with a new round of woes related to subprime mortgages, which were generally made to people with poor credit histories. This month, the FDIC took control of the IndyMac Bank, a major lender that specialized in higher risk loans, after it failed. The FDIC intends to keep IndyMac open, as it did with Superior, but it doesn't plan to originate any new mortgages.

At the time the FDIC was running Superior, subprime lending hadn't yet emerged as the national disaster it since has become. But some lending experts already were faulting industry practices and warning about rising delinquencies. The FDIC's problems with Superior could fuel criticism that bank regulators were slow to heed warning signs.

The FDIC, one of the chief U.S. bank regulators, manages a giant insurance fund that compensates customers of failed banks, and it takes charge of banks seized by the government. It has taken over hundreds of failed banks over the years, and generally has a good track record handling the difficult job.

The Superior situation could be costly for the FDIC. Texas-based Beal Bank SSB, which bought a portfolio of Superior loans, about half of them originated under the FDIC, is suing the agency in U.S. District Court in Washington. The suit claims many of the loans were made improperly and are plagued with problems.

An internal FDIC legal assessment, obtained by Beal Bank and filed in court last month, acknowledged "numerous appraisal deficiencies" in the portfolio and a "small number of loans that appear to be fraudulent from inception." Calling the FDIC's legal position poor, the undated 26-page assessment suggested that the agency's liability could be as much as $70 million. Another FDIC official, in a deposition, estimated that the cost of settling the case could be less than one-third that amount.

In a recent court filing, the FDIC estimated that about 1,500 of the 5,315 loans it sold to Beal either have defaulted or are nonperforming. The FDIC already has bought back another 247 of the mortgages, most of them for violations of federal anti-predatory-lending laws intended to protect borrowers from unreasonably high fees or deceptive practices. Beal Bank has said in court filings that 73 of the repurchased loans were originated while the FDIC was running Superior.

In a statement, FDIC spokesman Andrew Gray said the agency was "prepared to immediately work with Beal" to fix any additional mortgages originated under its watch that violated consumer-protection laws or the FDIC's own subprime-lending guidelines. As for the loans it has already acknowledged were predatory, Mr. Gray said the FDIC has provided recompense to affected borrowers and instructed its servicing contractor to avoid foreclosing.

Mr. Gray added that the FDIC "remains deeply concerned about consumer-protection issues. Though these loans with relaxed lending standards were commonplace during this period, time and experience has shown that the long-term interests of borrowers were not always served well by them."

Meanwhile, a separate portfolio of Superior subprime loans that the FDIC sold to Bank of America Corp. -- which the bank in turn sold to investors -- also has been troubled. As of April, investors had suffered "realized losses" -- which generally occur after foreclosures -- on 511 of the 3,964 loans in that pool, according to data provided to investors. The vast majority of the loans were originated when the FDIC was running the bank, the data show. In May and June, two ratings agencies downgraded some securities backed by the mortgages, with one citing a large number of severely delinquent loans and other problems. A Bank of America spokesman declined to comment.

Subprime mortgages typically carry high interest rates to reflect the greater likelihood of default. For years, the government encouraged lending to low-income borrowers as a way to increase home-ownership rates. But the market got out of control after some lenders started doling out more aggressive loans, relaxing collateral requirements, and paying less attention to the ability of borrowers to pay.

FDIC Chairman Sheila Bair has been unusually forthright in putting part of the blame for the mortgage mess on regulators, who she has said should have acted earlier. But Ms. Bair -- who took office in 2006, long after the FDIC ran Superior -- also has faulted lenders, criticizing them for "lax lending standards," making "poorly underwritten" loans, and placing borrowers in "products that create financial hardship rather than building wealth."

Appraisal Issues

Brister Hightower, a retired high-school teacher, lost his rural home near Athens, Ga., to foreclosure after he fell behind on a high-interest mortgage taken out from Superior when the FDIC was running it.

Twenty years ago, Mr. Hightower had purchased what he calls a "small, run-down house" with a tin roof adjacent to a trailer park. He worked with a cousin to fix up the interior, and added insulation, vinyl siding and a second bathroom. In December 2001, he refinanced it with a $120,700 mortgage from Superior, using the proceeds to pay off an earlier loan and some other debt. The 20-year mortgage carried a 10.75% fixed interest rate, compared with the roughly 7% rate then available to borrowers with good credit.

Some subprime problems have been blamed on lenders giving out mortgages for more than a house is worth, immediately putting the borrower in a financial hole. The appraisal used by Superior valued Mr. Hightower's home at $142,000. The three "comparable" properties used to justify that appraisal were well-tended houses situated miles away in neighboring counties. Two were close to the center of Athens, where county officials say property values in general were much higher than in Mr. Hightower's area. County records show the fair-market value for tax purposes of Mr. Hightower's home was less than $84,000.

His loan was among those sold to Beal Bank by the FDIC. Mr. Hightower, now 68 years old, says he tried to keep up payments, but couldn't after "it got to the point I could hardly eat." Beal foreclosed, and in 2005 sold the property at auction for $76,000.

Told that the FDIC was running the bank when it gave him the loan, Mr. Hightower says: "I wouldn't expect the government to rip me off...Can I get some money back?" The FDIC didn't respond to questions about Mr. Hightower's loan.

Superior Bank, based outside of Chicago, was 50% owned by the Pritzker family of Chicago, which also controls the Hyatt hotel chain. The bank had just 18 branches, but grew rapidly in the 1990s by making subprime loans nationwide through a subsidiary, Alliance Funding. When Superior failed in July 2001, regulators faulted it for "poor lending practices" and overly rosy valuations of assets related to its securitization of subprime loans.

When the FDIC learns a bank is about to fail, it tries to locate a buyer ahead of time to assume its deposits and loans. With Superior, the agency had little warning. A private-sector rescue plan had fallen apart at the last minute. The agency decided that the best way to maximize the value of the failed bank was to continue operating it under a new name while it searched for buyers.

FDIC Personnel

The FDIC appointed one of its senior officials to be Superior's chairman, hired a new chief executive, and installed agency employees to oversee day-to-day operations, agency documents show. But it continued to employ many of the bank's workers who originated subprime mortgage loans. The FDIC sold Superior's branches and its deposit-taking business for $52.4 million in late 2001, but no prospective buyers materialized for its subprime-lending unit. The FDIC stopped funding new loans in early 2002, and shuttered the operation by that May 31.

Both before and after the FDIC takeover, Superior relied heavily on a national network of independent mortgage brokers to locate potential borrowers. Some such brokers have been criticized for focusing more on the fees they collect from generating loans than on the ability of borrowers to pay. The FDIC says it was concerned about the dependence on brokers, and brought in "independent compliance examiners" to look at Superior's lending standards. The agency says it changed some of the guidelines several months after it took charge.

But in a deposition in May for the Beal Bank litigation, a senior FDIC official suggested that fixing the bank wasn't the agency's top priority. "Our job was to go in and sell the assets of the institution, and not try to clean up the operations, per se, to make this a better bank," said the official, Gail Patelunas.

Mitchell L. Glassman, director of the FDIC's division of resolutions and receiverships, defended the agency's oversight of Superior in a 2004 letter to FDIC's inspector general. He said that mortgage applications submitted through brokers were first checked by 270 in-house underwriters, then rechecked by a staff of 21 quality-control auditors, who "effectively conducted due diligence" on all incoming loans using a 200-item questionnaire.

Beal Bank, based in Plano, Texas, sued the FDIC in 2002, not long after it finished paying the agency about $339 million for 5,315 Superior mortgages. Roughly half were "New Superior" loans originated when the FDIC was in control, and half were underwritten by "Old Superior."

Although the FDIC usually sells such loans on an as-is basis, the agency backed the Superior loans with extensive warranties about their quality, including that there was no fraud or misrepresentation in their origination. The FDIC says it included such guarantees, in part, to give Beal Bank the ability to sell back to the agency any loans that had fallen through cracks in the oversight process.

In its court filings, Beal Bank claims that many of the loans weren't as represented by the FDIC. It says some were based on negligent or fraudulent appraisals, and others were based on false or inaccurate information about borrower income. It also says that minority borrowers were given loans with higher fees and interest rates than similarly situated white borrowers, in violation of federal law.

"The FDIC has established high standards of ethical and legal conduct for mortgage lenders that it regulates, but has demonstrably failed to meet these standards in its lending activities at Superior and loan sales to Beal Bank," says Andrew Sandler, an attorney at Skadden Arps Slate Meagher & Flom LLP, who represents Beal Bank. "This lawsuit is about requiring the FDIC to meet its own standards of accountability."

'Gross Discrepancies'

An internal FDIC legal memo on the case that was turned over to Beal Bank's lawyers refers to "gross discrepancies" in some loan files, including forged signatures or "wildly different signatures purporting to be that of the same person." A single mother claimed two children in applying for a loan, but later cited the needs of five children when she failed to make a single payment, according to the memo, which is undated.

In 2004, the FDIC hired an outside expert, Silver Spring, Md., consultant Ronald L. Freudenheim, to assess the loans sold to Beal Bank. A version of the consultant's report, recently filed in court by Beal, said that 13% of the loans showed no evidence that the borrowers' incomes were verified, while in 16% of loans the borrowers had too little income for the debt they were taking on. Overall, he said, 56% of the loans violated Superior's guidelines and "should not have been issued." The assessment didn't differentiate between Old Superior and New Superior mortgages.

The FDIC says that was a draft report. Last month, the agency filed a final version in court, which estimated that about 19% of the loans sold to Beal contained "material" breaches of the warranties -- meaning there were significant problems with close to 1,000 mortgages. This version of the report blames Beal Bank for some of the portfolio's lost value, saying it serviced the loans in an "inferior" manner.

Stephen Costas, Beal Bank's general counsel, declined to comment on that. He said the Superior matter is an "isolated disagreement" with the FDIC, and that the bank looks forward to resolving it and continuing its "good relationship" with the agency.

Mr. Gray, the FDIC spokesman, said the agency has "worked in good faith to repurchase loans subject to our obligations." He said Beal Bank hadn't provided until recently enough information on the alleged problem loans for the agency to take action.

OMG!!! I Can't Believe This. The Gov. Accepting Blame.....

Coastal Funding Corp. — Mon, 21 Jul 2008 10:51:35 -0700

Subprime Lender
Made Problem Loans
On Regulators' Watch By MARK MAREMONT
July 21, 2008; Page A1

Federal officials heap much of the blame for the subprime mortgage mess on lenders, claiming they recklessly made too many high-cost home loans to borrowers who couldn't afford them.

It turns out that the U.S. government itself was one of the lenders giving out high-interest, subprime mortgages, some of them predatory, according to government documents filed in federal court.

I had just posted a blog last week over another article that was pointing the finger at brokers. I can't believe the Government finally stepped up to except some of the blame. ( I'm sure they didn't have a choice. )

It is very hard to condemn others, when you set the bar...

Paulson Braces Public for Tough Times

Coastal Funding Corp. — Mon, 21 Jul 2008 10:36:53 -0700

While reassuring the public that the U.S. economy has "strong long-term fundamentals," Treasury Secretary Henry Paulson says Americans should still prepare themselves for months of economic troubles. "The three big issues we're facing right now are, first, the housing correction; secondly, turmoil of the capital markets; and thirdly, the high oil prices," he says.

Is the only thing these idiots can do, is point out the obvious.

"Hey everybody, the market is bad..."

"Hey everybody, Gas is expensive..."

"Hey everybody, The Housing market is a mess..."

Thank you Capt. Obvious, where would we be without you...

It's no wonder things aren't picking up like we've been told over and over again they would.

Don't Just Blame The LO....

Coastal Funding Corp. — Thu, 17 Jul 2008 13:20:24 -0700

I posted this on another blog but thought it was worth sharing...

You can't put all the blame on loan officers. Some of the blame has to fall on the system that allowed some of those loans to close. I've been in this business a long time now and seen a whole lot of finger pointin... Your are right about that trickle down effect. That trickle flows pretty good when it comes to passing the blame. Banks are in so much trouble due to their own system. And Greed, can't forget that one!!! Being in the business, there was not as much fraud and things along those lines as Banks would have you believe. Not saying it wasn't there, because it was and still is, but everyone wants to pass the blame on to others. The bottom line was, banks were offering loan programs that made it possible for borrowers to qualify for loans they should not have qualified for. Case in point, Stated W-2... Which means, " Hey ya'll, I really don't make the money to pay this loan back, is that gonna be a problem???" You offer programs like that, of coarse brokers are going to take advantage of it. But, who is to blame? The Bank or the Broker... No matter who points where, the answer is BOTH... Not one or the other.... You should have to take the borrowers ablility to re-pay a loan into the equation reguardless of program guidelines... Banks want to scream fraud, and misleading information. What did they think would happen with programs like that? If you tell me you don't care how much money I really make and to just tell you a number, don't get mad and call me a liar, when I can no longer afford the payment. You plainly said, you do not care. I'm not defending either side, I'm just doing what I do best. TELL IT LIKE IT IS... Everyone should take responsibility for thier own stupidity and bad judgement...

We Need Loan Originators!!!!!

Coastal Funding Corp. — Wed, 16 Jul 2008 13:03:27 -0700

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Excellent Commision Plan
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Myrtle Beach, SC 29579

843-903-5090

Fed Clears Rule to Guard Against Deceptive Mortgages...

Coastal Funding Corp. — Wed, 16 Jul 2008 13:00:37 -0700

Fed Clears Rule to Guard Against Deceptive Mortgages

By MEENA THIRUVENGADAM and MAYA JACKSON-RANDALL
July 15, 2008; Page A15

The Federal Reserve Board unanimously approved a rule aimed at better protecting consumers from deceptive mortgage-lending practices.

The rule is similar to a proposal issued in December but adds protections for people with higher-priced mortgages. Those loans include those in the subprime market but typically exclude prime loans.

"The subprime market doesn't really exist right now," Federal Reserve Board Vice Chairman Donald Kohn said. "What we're asking is what do we want it to look like when it comes back. We don't want it to look like it has [the] past couple of years."

The new measures require creditors to verify borrowers' income and assets and to establish escrow accounts for all first-lien mortgages. Lenders will be prohibited from relying solely on a home's value to assess a borrowers' ability to repay loans. Prepayment penalties also will be limited.

The rule will also require advertising to include new information about rates, monthly payments and other loan features and ban seven deceptive or misleading practices, including representing that a rate or payment is "fixed" when it can change.

The rule will apply to all lenders and not just to banks supervised by the Fed.

"This rule will help eliminate areas of uncertainty that threaten to further weaken the market and [will] establish clear, well-balanced regulations that will benefit both borrowers and lenders," said Rep. Carolyn Maloney (D., N.Y.). "Unfortunately, however, the new rule won't help the millions of homeowners who've already fallen behind or defaulted on their mortgages, but it can help to prevent another housing crisis."

The Fed's staff is recommending that most changes go into effect by Oct. 1, 2009. Regulations for escrow requirements, however, wouldn't go into effect until April 1, 2010, to allow the industry to make the adjustments to facilitate the rule change.

Mortgage insurers raise the bar, creating another hurdle for home buyers...

Coastal Funding Corp. — Wed, 16 Jul 2008 12:49:44 -0700

Mortgage insurers raise the bar, creating another hurdle for home buyers

By Amy Merrick - The Wall Street Journal

Mortgage insurers have been dramatically tightening their standards throughout the U.S., further squeezing potential home buyers.

Stung by growing defaults, lenders are offering borrowers fewer ways to avoid purchasing private mortgage insurance. Mortgage insurance, required for buyers who are unable to make a full down payment or who have insufficient credit histories, reimburses lenders in the event of a borrower default. But over the past few months, mortgage insurers have been declaring more and more of the U.S. a "declining market," raising the requirements and making such insurance harder to obtain. The result: another hurdle for home buyers, and yet another wrenching change for the struggling housing market.

While it's difficult to gauge the severity of the impact, industry executives concede insurers' tighter standards are affecting the market. At ShoreBank Corp., a community-development bank with branches in Chicago, Cleveland and other cities, the insurers' tighter standards are "wreaking havoc," said Michelle Collins, director of mortgage lending. For a popular conventional loan package, "easily 70 percent of the previous set of borrowers will not be able to buy," she added.

The spreading restrictions are a symptom not only of the housing and credit crisis, but of the mortgage-insurance industry's own huge losses. The insurers face massive borrower defaults on loans that were approved when securing a mortgage was far easier.

Punished with continual downgrades by credit-rating agencies, mortgage insurers have been trying to shore up their stricken balance sheets. One large player, Triad Guaranty Inc., said last month that it would stop writing new insurance and gradually wind down its business. Radian Group Inc. announced management changes last week aimed at restoring investor confidence.

Insurers add that they are pursuing the kind of more disciplined behavior that may have helped avert the housing crisis.

"Clearly, the pendulum had swung a little too far in terms of flexibility in underwriting," said Len Sweeney, chief risk officer for AIG United Guaranty, the mortgage-insurance unit of American International Group Inc. "Some of the movement we've made of late is back to a more prudent approach."

Michael Zimmerman, a spokesman for industry leader MGIC Investment Corp., said, "So far, we're only losing the business that we no longer want to write. The long-term objective of anybody in the housing industry should not be just affordability, but sustainability. I think for the last few years, the drive and the focus have been solely on affordability."

For a time, it seemed mortgage insurers were going the way of the dinosaur. During the housing boom, when lending standards loosened drastically, borrowers often avoided mortgage insurance by taking out two loans, one that covered 80 percent of the purchase price and a second, "piggyback" loan to cover the once-traditional down payment.

But with piggyback loans all but vanished, prospective home buyers are facing more pressure to purchase mortgage insurance. The so-called "penetration rate," which compares the balance of all loans covered by mortgage insurance with the balance of all mortgage loans underwritten during the same period, jumped from about 8.5 percent in early 2006 to about 20 percent in the fourth quarter of 2007, according to several insurers' filings with the Securities and Exchange Commission. (The rate dropped to 13 percent in the first quarter as insurers increasingly focused on more credit-worthy borrowers.)

This year, mortgage insurers have benefited from the growing number of loans being funded by Fannie Mae and Freddie Mac, the government-sponsored mortgage companies that require mortgage insurance on loans that don't have a substantial down payment.

But the crisis of confidence facing Fannie and Freddie raises major concerns about the pipeline of business flowing to mortgage insurers.

"The U.S. housing market and the industry are very closely linked" with Fannie and Freddie, said AIG's Sweeney. "The plan announced by the U.S. Treasury and the Federal Reserve should go a long way to reassure the credit markets and allow [Fannie and Freddie] to maintain their critical role in the nation's economy."

If the insurers can't keep up with the pace of failing loans they've promised to make whole, that would turn up the pressure on mortgage lenders, who could get stuck without insurance payments to offset their losses.

"There were obviously a lot of products in the market that weren't supportive of sustainable homeownership," said Joanne Berkowitz, executive vice president of risk management and operations for mortgage insurer PMI Group Inc. The insurers say they will be able to pay the claims.

To diminish their exposure, mortgage insurers have been defining an increasing number of markets as declining, based on housing starts, home sales and prices, unemployment and other factors. In areas where home prices are dropping, insurers bear greater risks, because a home now is more likely to bring too little at a foreclosure sale to pay off the loan.

Nowadays, insurers are frequently requiring at least a 10 percent down payment, compared with previous standards that might have included a 3 percent to 5 percent down payment. Prices also are rising. Next month, for example, MGIC plans to charge an annualized premium of up to 0.75 percent of the loan balance for fixed-rate, 30-year mortgages with a 10 percent down payment, up from 0.67 percent this month. The company doesn't plan to change course anytime soon.

"Housing cycles don't correct quickly," said MGIC's Zimmerman.

Mortgage lenders and real-estate agents complain that insurers are painting the country with too broad a brush. For instance, the metropolitan area that includes Chicago, home to nearly 8 million people, is designated a declining market by four of the top five insurers, even though home sales vary widely within the area.

"To put this blanket overlay on my marketplace and say it's all a declining market, it's not true," said David Hanna, managing partner of Prudential SourceOne Realty in Chicago. City neighborhoods such as Lincoln Park and Hyde Park, as well as affluent suburbs such as Hinsdale, still are seeing home prices appreciate, he said.

Hanna points out the declining-market tag has hit such unlikely transactions as a $1.1 million sale of a home in Wilmette, a well-to-do suburb. The buyer had to come up with an extra 5 percent down payment.

In another case, a two-unit building in Chicago was ready to be sold to an investor for $449,000, when the required down payment again was boosted. The buyer still is trying to come up with the funds. It turned out that a different investor in that neighborhood had defaulted on seven properties, driving down comparable prices.

Hanna said such circumstances should be taken into account.

"Maybe one project, because of past history, you have issues, but you're impacting literally thousands of other people," he said.

Mortgage insurers say the data they receive on home sales aren't conclusive enough to be more precise in designating declining markets.

Some mortgage brokers are turning instead to the Federal Housing Administration, whose more lenient loan program requires only a 3 percent down payment. The government agency's share of the mortgage market has grown to about 10 percent to 12 percent recently, compared with about 3 percent when private-sector loans were easiest to obtain.

Yamila Ayad, president of Mission Home Loans in San Marcos, Calif., said business is growing for FHA loans on properties below $350,000. But some prospective buyers need bigger loans than the FHA offers or fail to qualify.

"It's either an FHA loan or a conventional buyer with 20 percent down," she said. "There's no in-between."

Meanwhile, government officials are growing concerned about the FHA taking on many loans that the private sector would refuse. On July 1, the FHA began charging higher premiums for riskier borrowers for the first time in its 74-year history.

The FED is buying up all these failing Mortgage Lenders....

Coastal Funding Corp. — Wed, 16 Jul 2008 12:33:38 -0700

Anybody here ever play MONOPOLY???

Seems to me the FED likes to play Chess....

Feds Seize IndyMac's Assets As Bank Fails

Coastal Funding Corp. — Tue, 15 Jul 2008 23:48:03 -0700

"(AP) IndyMac Bank's assets were seized by federal regulators on Friday after the mortgage lender succumbed to the pressures of tighter credit, tumbling home prices and rising foreclosures." ( they forgot to mention lousy decision making. OOOPS!!! did I say that out loud...)

The bank is the largest regulated thrift to fail and the second largest financial institution to close in U.S. history, regulators said.

Shares of Fannie and Freddie dropped to 17-year lows before the stocks recovered somewhat. Wall Street is growing more convinced that the government will have to bail out the country's biggest mortgage financiers, whose failure could deal a tremendous blow to the already staggering economy.

"The FDIC estimated that its takeover of IndyMac would cost between $4 billion and $8 billion." ( that's a whole lot of 0's. )

"IndyMac spent the last two weeks trying to reassure customers that it was not near default."

I just love it when corporations lie right to your face, right before they slam the door in it. I can't count how many times I've heard the same song and dance from every lender right before they close there doors. There goes more of our tax dollars to bail out another corporation whos greed out weighed their common sence. I guess some peoples moral compass only points in the direction of their wallet. So Sad...

Jay @ Coastal Funding Corporation

A case against waiting to purchase a home

Coastal Funding Corp. — Thu, 10 Jul 2008 11:46:23 -0700

If you purchased a home today for $218,900, put 20 percent down at 5.5 percent interest on a 30-year-mortgage then your payments would be $994.31.

If you purchased that same home next year, and the price dropped by 10 percent to $197,010 and had to pay 6 percent interest because we are coming out of a so-called-recession, then your payments would be $994.94.

Your payments would be nearly the same no matter which price you paid for the home. It is very likely that once our economy as a whole starts to get better then interest rates will gradually increase.

That slight increase will wash away all of the gains that one would get from waiting. In addition, waiting could cause you to lose the home of your choice.

Today, buyers have many options, yet when the market starts to go back up, those options will vanish. Now is a great time to buy a property.

Everyone needs to understand this so they don't miss the boat. Today, there are people who are wishing they sold two years ago.

In a few years from now, there will be people wishing they had bought today. Here are three facts that buyers must consider:

1. There is so much inventory to choose from. They can find what they want, where they want it.

2. Interest rates are very low; money is cheap.

3. Prices have fallen to unreasonable lows - good for the buyer. People say this market is bad. Think about that. It is only bad for half of the people in the market, sellers.

Two years ago, sellers were happy selling at really high prices waffle buyers were upset because they made a full price offer and the seller was holding out for a bidding war.

The buyer had to pay more than full price to buy something. The buyer was unhappy. Today, buyers are happy because they have a lot of property to choose from.

Prices are low and interest rates are low. Buyers are finding quality properties at a discount. Sellers are unhappy. So, is the market really bad?

There is almost always one group of the market that is happy and one group that is unhappy, just as it was a few years ago.

*The Carolina Forest Chronicle

We Need Loan Originators!!!!!

Coastal Funding Corp. — Fri, 27 Jun 2008 11:03:24 -0700

Coastal Funding Corpoation is in need of experienced Loan Originators...

Must Have Experience
Excellent Commision Plan
The Best Processing In The area. Loans Almost Close Themselves
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Call Today For More Information...

Coastal Funding Corporation

3721 Wesley Street Suite 123

Myrtle Beach, SC 29579

843-903-5090

We Need Positive Reinforcement.....

Coastal Funding Corp. — Tue, 03 Jun 2008 12:10:06 -0700

Why is it that all you read or hear about in the media is how bad the real estate market is??? Property values are coming down, making it a little easier for average working class people to once again be able to afford to own their own home without starving to death in the process. Interest rate are still low. Usually floating in the 5.5-6% range. You don't hear to much about that do ya... 100% financing is, for all practicle purposes a thing of the past. It can still be done to a degree, but nothing like in the past. FHA IS NOT THE ANSWER... FHA IS NOT THE NEW SUB-PRIME... I don't care how much they try to, you are not selling it here... In the past, anything that would qualify FHA, I could get approved conventional. Less headaches, less paper work, less explanations... Granted, I made less money, but I like simple and easy and so do my clients. We try to take as much of the stress and aggrevation out of the mortgage process as we can... That statement, in my experience, did not mesh well with FHA. I do have access to the avenue of FHA, but I myself have a tough time turning down that avenue. WILL, BUT NOT HAPPY ABOUT IT. The point is, the media points people in a direction. Sometimes it the wrong direction or just a bios one. If you turned on the TV tonight and saw a report that said: IT'S OVER... THE MORTGAGE CRISIS IS OVER... NOW IS THE PERFECT TIME TO BUY... People would believe it. It would not true, but none the less, they would believe it. That is my whole point. Good or Bad, the honest truth is, most people believe what they hear, if they think it is a viable source; Radio,TV,News paper, internet... That is what it is and will not ever change. All anyone can ask for is a little positive reinforcement...

Jay Spurlin

Coastal Funding Corporation

It is getting better....

Coastal Funding Corp. — Tue, 03 Jun 2008 11:33:55 -0700

It's about time... Slowly, Sub-Prime is returning... As each day passes, more and more loan programs are returning...