Buying & Selling: Washington Post Vs. Housing Market

The Post has published some yeoman articles dealing with the collapse of the housing market in recent months, and the last two days have been no exception. Sunday's edition had a story detailing the fight by lenders to keep their buyers from foreclosing:

"We would much rather work with a borrower than go through the foreclosure process," said Steve Bailey, Countrywide's senior managing director of loan administration. "We lose money on a foreclosure, the borrower is out of their home, and nobody is happy. The math works against us."

The article includes some detailed advice on what to do if you are falling behind on your payments, including the sobering advice that sometimes it's better to just hand over the keys in a short sale than be foreclosed on.

Not to be outdone, today's edition has a look at how mortgage firms such as New Century were pressuring brokers to rubber-stamp bad loans:

"The stress in that place was ungodly. It was like selling your soul," said Hardiman, who worked for New Century in 2004 and 2005. "There was instant notification to everyone as soon as you rejected a loan. And you dreaded doing it because you paid for it. Two guys would come with a bat, and they were all [ticked] off because you cut their deals."

This is EXACTLY why we need stronger oversight, regulation, and transparency of the markets. Wall Street turned its head and let itself be deafened by the sound of the cash rolling in like ocean waves, and as a result, "sweatshop lenders" like New Century pushed through loans that should never have been approved, under appalling conditions. As long as the market was good, no one gave a damn, but once the delinquencies started rolling in, everyone had one eye on the exit.

This cannot be allowed to happen again, and kudos to the Post for shedding light on these issues.

Posted at May 7, 2007 01:28 PM

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The Post has published some yeoman articles dealing with the collapse of the housing market in recent months, and the last two days have been no exception. Sunday's edition had a story detailing the fight by lenders to keep their buyers from foreclosing: "We would much rather work with a borrower than go through the foreclosure process," said Steve Bailey, Countrywide's senior managing director of loan administration. "We lose money on a foreclosure, the borrower is out of their home, and nobody is happy. The math works against us." The article includes some detailed advice on what to do if you are falling behind on your payments, including the sobering advice that sometimes it's better to just hand over the keys in a short sale than be foreclosed on. Not to be outdone, today's edition has a look at how mortgage firms such as New Century were pressuring brokers to rubber-stamp bad loans: "The stress in that place was ungodly. It was like selling your soul," said Hardiman, who worked for New Century in 2004 and 2005. "There was instant notification to everyone as soon as you rejected a loan. And you dreaded doing it because you paid for it. Two guys would come with a bat, and they were all [ticked] off because you cut their deals." This is EXACTLY why we need stronger oversight, regulation, and transparency of the markets. Wall Street turned its head and let itself be deafened by the sound of the cash rolling in like ocean waves, and as a result, "sweatshop lenders" like New Century pushed through loans that should never have been approved, under appalling conditions. As long as the market was good, no one gave a damn, but once the delinquencies started rolling in, everyone had one eye on the exit. This cannot be allowed to happen again, and kudos to the Post for shedding light on these issues.