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Mortgage Market - The Panic of 2007... EXPLAINED!

By
Mortgage and Lending with Century 21 Mortgage

I was just forwarded this article by my financial adviser.  At first I was hesitant to open.  Much of what they send out is canned and just a CYA thing.  However, this link proved to be dramatically different.  It is not only insightful, but (believe it or not) gives a nice basic introduction to some of the things going on.  While it gives you enough acronyms to choke on, it also tries to explain and categorize them.  Not sure if I've been reading this stuff too much, but this seems to clearly walk you through many of the technical aspects of what is going on w/o requiring you to get a Ph.D in Economics. 

I found the link to MIT on page 3 did not work, but was able to track down what I believe is the chapter he is referring you to (warning, THAT may require some post graduate study to stomach :).

So, without further adieu, please read and comment on the following:

John Mauldin's "The Panic of 2007!"

And another link to MIT referenced on page 3:

MIT - Chapter 20 - Introduction to Commercial Mortgage Backed Securities

Let me know if either link is broken.  I thought that his article was a great read and really puts together what could actually be happening.

 

 

Show All Comments Sort:
R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

That was good!  I think that the guy pretty much hit the nail on the head. 

 

Bob Mitchell

ValueList Real Estate Services, Inc. 

Aug 21, 2007 02:53 AM
Joe Kupiszewski
Century 21 Mortgage - Tallahassee, FL

~Michael~  Thanks.  That was how I felt.  Glad someone forwarded it to me!

~Bob~  I agree.  Seems to have summed up much of the underlying fundamentals for us.

Aug 21, 2007 04:01 AM
Joe Manausa - Tallahassee, FL
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate
Thanks Joe, great post. But who's panicing? Just kiddin...
Aug 21, 2007 09:59 PM
Joe Manausa - Tallahassee, FL
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate
Joe, after reading the link, I came back, gave you 5 stars and recommended for Feature Article. I hope others do as well. This is the type of information that EVERYONE on AR needs to read. Best explanation for market condition that I have read or heard.
Aug 21, 2007 10:04 PM
Joe Kupiszewski
Century 21 Mortgage - Tallahassee, FL
~Joe~ Thanks for the comments.  That was my reaction after reading the article.  Maybe I need a better title for my blog entry like your Realtor Dies During Blog Training (warning, Graphic Pictures!) to expose this to more people.   
Aug 21, 2007 10:22 PM
Richard J. Allen
Guaranteed Rate - Santa Clarita, CA
Vice President of Mortgage Lending
Very good blog.  I am a mortgage broker in California that can really feel the financial market tightening up.  I forwarded this to all my agents for the great information on how our business operates!
Aug 22, 2007 10:13 AM
Shane Leady
Apella Business Solutions - Zolfo Springs, FL

Thanks for the post and item, I have to admit there was a couple of ideas in there that I found to be interesting. Thanks again was a great share.

Aug 22, 2007 02:21 PM
Shane Leady
Apella Business Solutions - Zolfo Springs, FL

Thanks for the post and item, I have to admit there was a couple of ideas in there that I found to be interesting. Thanks again was a great share.

Aug 22, 2007 02:21 PM
Shane Leady
Apella Business Solutions - Zolfo Springs, FL

Thanks for the post and item, I have to admit there was a couple of ideas in there that I found to be interesting. Thanks again was a great share.

Aug 22, 2007 02:21 PM
Jason Danowski
Wells Fargo Home Mortgage - Quincy, MA

 <<IF ANYONE JUST SKIMMED-THROUGH THAT ACRTICLE....READ IT AGAIN!>>

 This was an absolute pleasure to read....informative, succinct, and inherently (not intentionally) optimistic.

It also magnifies some key indefinites;

1) Someone has to step in and restore credibility to the rating system, what if they don't?

2) If almost all of the people in danger of going into default/foreclosure contact their lender and arrange workouts (loss mitigation), REO's and Short-Sales can be avoided/delayed to help pricing/rating.  Many homeowners in this situation are NOT calling their lender, and have no idea that they can request a loan modification.  With so many ARM's ready to adjust and Pay Option Mortgages nearing re-cast, a great number of loans can still go very bad, and (possibly) leave many tranches as poorly rated as they are today (if not worse).

I have read plenty of  people's thoughts on how this can play out "worst-case-scenario"...I think that John has a fantastic (and feasible) perspective on "best-case-scenario".

Hopefully things progress as Mr. Mauldin has foreseen.

....there are still a whole lot of loans out there that have yet to enter default/foreclosure status...but they will default...

I know I wouldn't buy any of the crap loans that I turned-away from originating as an LO,...even if Warren Buffet was selling them....lol

 We'll just have to see.  In any event....great friggn post Joe, kudos to you and John.

Aug 22, 2007 03:20 PM
Joe Manausa - Tallahassee, FL
Joe Manausa Real Estate - Tallahassee, FL
Tallahassee Real Estate
I agree with Jason. This is not a "skim," but rather a semester reading assignment!
Aug 22, 2007 07:24 PM
Joe Kupiszewski
Century 21 Mortgage - Tallahassee, FL

~Jason~  Thanks!  I have re-read that article 2 times now and will read it again today.  So many interesting points layed out and tied together in a logical manner... Glad you enjoyed.

 

Aug 22, 2007 10:21 PM
Joe Kupiszewski
Century 21 Mortgage - Tallahassee, FL
~Christina~  Let us know what you think!
Aug 22, 2007 10:22 PM
Joe Kupiszewski
Century 21 Mortgage - Tallahassee, FL
Thanks Richard, thanks Shane.  Just glad others enjoyed as well.
Aug 22, 2007 10:23 PM
Melissa Grant
A Serendipity World - Greenbackville, VA
The Law of Attraction In Life & Business
Kudos ! Great post !
Aug 22, 2007 11:08 PM
Joe Kupiszewski
Century 21 Mortgage - Tallahassee, FL
~Melissa~ Glad you enjoyed, thanks!
Aug 23, 2007 12:47 AM