2007 Originated Loan Defaults - Frightening!

Questionable business practices may have played a role, too. Some of the 2007 loans "were knowingly originated as really bad loans," says Chris Mayer, a professor of real estate at Columbia University's business school. Mortgage originators who profited handsomely from the housing boom "realized the game was completely over" and pushed mortgages out the door, says Mr. Mayer.

online.wsj.com...

The fraud from loans written in 2007 appears to have been perpetrated across the board (maybe because there were just no legitimate loans left to be written?). This is really bad. It extends the fallout from the lending defaults much further out than originally expected.

Apparently the word "regulation" just vanished over the past few years. We already knew we have serious problems coming, but this just so ugly I am surprised it is even being reported, because it's one thing to know it, but it's another when the media actually starts saying it. I consider this a major YIKES!

hi there, nice work first and foremost, its pretty crazy to see all this going on knowingly but ive been there myself with the loans. it really does seem that the numbers are just all made up! lol. good work and good luck to us all when this bubble really bursts

Well, looks like we may be starting to see the Pay-Option ARM resets starting to hit. And it looks like they may be hitting a little early due to rapid depreciation of home values in the states where they were most often used. The pay-Option mortgage is truly one of the most vile financial instruments ever created, and sold to an unsophisticated consumer they are truly toxic.

By the way that is a great article. I see lots of familiar names in it. Looks like JPMorgan/chase is saying even the prime stuff written in '07 is crap.

Last month, J.P. Morgan Chase & Co. said it expects losses on prime mortgages that weren't securitized and remain on its books to triple from current levels. The increase in bad loans is driven mostly by jumbo mortgages originated in the second half of 2007, a company spokesman said.

I'd love to see one of these Mortgage Backed Securities bought around .30 on the dollar and tore apart by forensic acountants looking for fraud at all levels buyer, seller, appraiser, real estate agent, originator, and securitizer. I think it would be really interesting.

From the International Herald Tribune:

A Second, Far Larger Wave of U.S. Mortgage Defaults is Building

The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is building with alarming speed.

The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A, or alt-A, mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time.

While it is difficult to draw precise parallels among various segments of the mortgage market, the arc of the crisis in subprime loans suggests that the problems in the broader market may not peak for another year or two, analysts said.

"The wave on the prime side has lagged the wave on subprime side," said Rod Dubitsky, head of asset-backed research at Credit Suisse. Resetting the option adjustable rate mortgage loans "is a big event that will drive the timing of delinquencies."

"the problems in the broader market may not peak for another year or two"

Yikes!

Like I've been saying, 2009 is the year of pain.
.

Originally posted by Gools
Yikes!

Like I've been saying, 2009 is the year of pain.
.

I was thinking 2009 before this come out, and lets not forget we still don't know what has been going on in the first half of 2008. Has it even stopped yet? I think this revelation stretches it even further, perhaps as far out as to 2012 now.