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The mortgage industry looks more like a party that ended abruptly when the parents came home a day early, only to discover the children and hundreds of their friends were caught with their pants down. Every day more reports of job cuts and layoffs come to our attention.

LandAmerica Financial Group Inc., primarily a title insurer, said Tuesday it plans to cut 1,100 jobs in the second-half of 2007 because of a slowdown of the mortgage origination market.

This is from August 2005 – exactly two years ago – as Mortgage Blues takes a look back:

In a speech last month (july 2005) to the New York Bankers Association, then-Acting Comptroller of the Currency Julie Williams addressed criticism that the agency’s enforcement is too soft. “When supervisors identify an issue, we expect it to be fixed, promptly, without having to resort to subpoenas for the information we need or to enforcement action to achieve the result we seek,” Williams said.

Why did the subprime money pipeline shut down? And which bank was buying mortgages from brokers and lenders? HSBC of course. Subprime and second mortgages were to HSBC like Household International was to predatory lending – an easy ride to profits. Or so they thought. Second mortgages? Sorry, but HSBC has little or no security interest when a home goes to foreclosure.

Bloomberg Television announced this morning that shares of Countrywide are down 53 percent for the year. Countrywide is the biggest mortgage lender in the United States. After a 42 billion infusion by Bank of America some analysts expected Countrywide share to rebound. The company tried to reassure the general public that it was safe and sound, saying they had billions in liquidity.

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