Headlines...

NEW -> Contingent Buyer Assistance Program
http://tinyurl.com/2c7cmj

Meritage homes reports some ugly numbers with cancellations up year over year and up from the last quarter.

But the best part was this:

"We think that this correction will be equal to or, more likely, greater than that in the early 1990s," said Gieber at A.G. Edwards.
 
"This is a developing scandal every bit as big as the Savings and Loan scandals of what seems like another era. We will end up with new regulations that are going to make it hard on the subprime borrower to actually get a loan, even when they should. Such is the way of rules"

Mauldin on subprime...
 
...the table shows all too clearly that an astounding percentage of adjustable-rate mortgages already are underwater, and it estimates how much equity would be wiped out if home values decline by 5%, 10% and 15% and translates the corresponding losses into dollars.

bahouse_20070706_2.gif


Link to Barry Ritholtz. (OK, not quite headlines but interesting nonetheless.)
 
Wowzers (again, not news headlines):

The problem is not the lack of clients which I have many. The culprit is the deteriorating home equity and degenerating credit profiles of my clients. On top of that, I encountered "flaky" A/Es and also "shaky" lenders who claim they could but they really can't fund the tough loans in today's market.

Spotted at CR. Link.
 
OC - Should I relay some stories from the front lines of how the mortgage guys are really struggling? It used to be if you had five in the pipeline three would close and now it is get as much in the pipeline because you don't know if it can or will close.

A little jobs data from Bloomberg.

Since consumer credit was double than expected is it just me thinking this is a bad thing when the "economists" think this means that the consumer is spending? Doesn't that mean they can't pay for things so they charge it? This wouldn't have anything to due with the lack of MEW would it?
 
D.R. Horton's quarterly orders fall 40%

Builder says housing market still challenging, sees loss after charges

By John Spence, MarketWatch

Last Update: 11:22 AM ET Jul 10, 2007

BOSTON (MarketWatch) -- Home-building bellwether D.R. Horton Inc. early Tuesday said quarterly orders for new homes fell 40% from a year earlier and that it expects to post a loss after impairment charges.

http://www.marketwatch.com/news/story/dr-hortons-orders-fall-40/story.aspx?guid=%7B435B3B41%2DCB11%2D49CF%2DB2AE%2D461155901C70%7D&siteid=yhoof
 
60 million Californians by mid-century

Riverside will become the second most populous county behind Los Angeles and Latinos the dominant ethnic group, study says.

By Maria L. La Ganga and Sara Lin, Times Staff Writers

July 10, 2007

Over the next half-century, California's population will explode by nearly 75%, and Riverside will surpass its bigger neighbors to become the second most populous county after Los Angeles, according to state Department of Finance projections released Monday.

http://www.latimes.com/news/local/la-me-population10jul10,0,1878846.story?coll=la-home-center
 
DowngradeFest:

In response to the investor criticism, executives at S&P, Moody's and Fitch had said last month that they were waiting until foreclosure sales of homes proved that the collateral backing the bonds has declined enough to create losses.

S&P said it is acting now because many bonds issued in late 2005 and most of 2006 now have ``sufficient seasoning'' to show delinquency, default and loss trends that indicated "weak future credit performance.''

Link.
 
When you start selling homes for $400,000 that were $500,000, all the homeowners who paid $500,000 are going to be in your sales office complaining, saying, "Why are you doing this to me? Why don't you just put a sign on my lawn saying, 'I'm a schmuck?' " So you've got to give incentives instead of lowering prices because you don't want to be rude, crude and barbaric to your clients.

Linky.

bob_toll.03.jpg
 
Damn I wish I knew how to short the ABX indices. With Moodys and S&P changing and downgrading the subprime toxic waste this is only going to get more ugly.

abx0707-1iec6ga2.png
 
graphrix - Try shorts or leap puts on the financials holding this stuff, or since they actually sold most of their toxic waste, short the financials that sold the most, because they are the ones who will end up with all the lawsuits.

We can all breath easy now. There is no problem with the Bear Stearns hedge funds, according to the SEC.

The U.S. Securities and Exchange Commission's market regulation director said on Wednesday the Bear Stearns Cos. Inc. hedge funds facing severe liquidity problems will "be able to unwind in an orderly fashion."

Don't pay any attention to that man behind the curtain.
 
The dumbest article of the day.

"Real estate experts say sales are being fueled by several factors, including the growing ranks of the wealthy.

The richest 5% of the nation's population saw its average household wealth soar 40% (adjusted for inflation) from 1990 to 2005, according to census data. That contrasts with a 7.3% increase for middle-income families."

Duh I bet that explains this: "By contrast, home sales in Los Angeles County fell 19.1% through May, according to research firm DataQuick Information Systems. "

The Times must be on the CAR payroll.
 
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