At first I was just going to let this slide off into obscurity. I can't.
On Friday, I watched Jim Cramer of CNBC have his own personal on camera meltdown. I'm not a big fan of Cramer, but I certainly can feel his pain.
Cramer was upset by the Fed's not paying attention to what is actually happening in the market. His Pain comes directly from his contacts in the hedge fund business. The fact that "good people" were losing their jobs because of the Fed's position. His Pain was that two of the Feds, Ben and Bill, were not paying attention. They just were not getting it.
I mentioned yesterday that the market was operating in uncharted territory right now. The 10 Year Bond Yield and the mortgage rates that have been mirroring the rise and fall of that bond yield have gone their separate ways.
My metaphor of choice was flying a jet through a cloud, no visibility, with no radar. Flying Blind.
I talked to a few Agents today. They've watched the same news I have, they've seen the same articles, some many even read that post. Yet as I was discussing current events with them, discussing the current Mortgage Meltdown, it became crystal clear they were just not getting the gravity of the situation. They just were not getting it.
"Mike, does this mean you can't get my self employed client approved for a 80/20 first time home buyer on a Non Owner Occupied duplex with his 600 credit score?"
Let's put it this way...
"Ladies and gentlemen, This is the Navigation Officer. I regret to inform you that it appears both the Captain and Co-Pilot have used their emergency parachutes and have left the plane. We'll pretend nothing has happened and continue flying on autopilot. Have a Nice Day and thank you for flying Mortgage Airlines!"
"So, how soon can we get them pre-approved and ready to make an offer?"
That right there is My Pain.
Jim, I feel for you.
Here is Jim's Meltdown.
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Mike,
I feel your pain. Nobody want to take charge and fly us out of our situation. Everybody is jumping out trying for a safe landing.
Frightening stuff, Mike. The panic that is happening south of the border is starting to be felt up here in Canada....what disturbs me even more is the steadily widening gap between the rich and the poor in the USA.
Where are all of these people who are losing their homes going ?
I saw a show a few nights ago that said of all of the developed nations, the USA is the closest to becoming a third world country. What I find even worse is that no one seems to be in charge down there....and things are clearly getting out of control.
Jo
WOW, what a blow up. He seems really upset about the whole situation. It makes you wonder who if anyone is home at the FED.
Wow, that was an amazing show. I wonder if anyone on the Federal level will hear what he said?
Hi Sarah - It's not just Agents, it's other mortgage people too. They have no idea what they can do and what they can't do (right now). I have no fewer than 10 people on my desk who's loans literally evaporated. One I can salvage as she other options on how she can buy. I'm going to a Title Company mixer this afternoon. I'll get to talk to lots of Agents and Mortgage people I'm sure. Plenty will be of the mindset that it's possible to do "this loan" or "that loan". That's so last month. The mortgage lender that's jerking your Dad around either knows what's happening and is telling your dad the truth (although he may not want to hear it) or he has no clue (there are plenty of clueless people in my industry) and has no idea why the underwriter just changed the conditional loan approval.
Rebecca - We're all along for the ride. Hold on tight. Countrywide is a rumor. They have issued statement after statement announcing they are safe. They may be - only time will tell.
"HomeBanc, a mortgage lender and servicer in the Southeast, said it is exiting the mortgage origination business since it has been unable to tap its lines of credit in order to fund new originations and had no liquidity. (HomeBanc has reached an agreement with Countrywide to transfer certain assets related to the retail mortgage origination operations, including up to five branches.)"
Susan - We can only accept what is. we're along for the ride.
Dennis - While I still don't agree with him, I do feel his pain. Fed Fund futures are suggesting only a 14% chance of a decrease by October. The accompanying statement mentioned the market volatility and credit tightening but it also gave no hope that it was soon to cut rates. And even if it did - I'm not sure that's the answer for us - it may be for Jim's friends in Hedge fund land, but how about us?
Jo-Anne - We're all coming up there. Get ready. I am already a Hockey player so I have that half covered. (don't you just love gross generalizations?)
Brenda, Randy and Nicole - They do. They have huge staffs of people listening. One of the problems is that the Fed must move with moderation. It's the nature of the beast. They are listening, but they cannot react quickly and abruptly.
Jason - As always Thanks!
Jeanne - As Countrywide Rep I appreciate your positive outlook. But I will also very respectfully say, How can you be so sure? I get all the CW press releases. I don't get the internal memos you are getting. I did get one forwarded to me from another lender yesterday that was a fluff piece to all the employees. "We're strong. We're solid. we're different from all the other guys." They left out the part about "until we regretfully have to close our doors due to unseen circumstances and let you all go."
Like I said, it's only a rumor and Countrywide is different. But you are a loan officer - not a CFO. While I support your enthusiasm and certainly hope you are gainfully employed for as long as you wish. The truth is that the doors to your office are controlled by others and other factors outside your company.
From yesterday:
Countrywide changed their reduced, no ratio, SISA, NINA, and “Super Streamline Documentation” programs, hitting their piggyback and standalone second-lien transactions (90.01-100% CLTVs are no longer eligible for purchase, single-lien transactions with 90.01-95% LTVs that have MI are still eligible.)
Mike, I dislike gross generalizations as well, and try to avoid making them myself. When I see politicians and journalists and scholars making them, I wonder if it is an alert to sit up and take notice. Lots of scary statistics flying around these days.
Hockey has greater prominence in the northern states now than it has in Canada....I guess we can always go back to lacrosse.
It may not be that much longer before the border is entirely dissolved so you may not need to bother coming up here....I see another of our biggest companies was just purchased by an American interest......there isn't much left that is entirely Canadian anymore. Even our prime minister has fallen into the back pocket of GB..
Mike,
After I watched Cramers, rant, I couldn't help but to agree with what he was saying, I mean how bad is it going to have to get before something gets done? I may not agree witha whole lot but our market is damaged badly and if any more banks go under and the economy continues on this course, we made have a Recession....
Whats your thoughts??
Tom Weiss
Whoa! Get that guy some Xanax! I swear, the things that go on in this country scare me more all the time.
Mike - It is not only Realtors, it's also loan officers. There are loan officers going ballistic because they can't believe they can't get something approved that they could have gotten down in the past.
Keep up the good work. Fortunately, good borrowers, buying good properties are having no problem getting loans. Doesn't this remind you of the dot.com bust?