Recent Articles
Piggyback home loans, defined:
A piggyback is a second mortgage taken out at the same time as a first mortgage, as a way of borrowing a larger total amount. The first mortgage is for 80 percent of property value, and therefore does not require mortgage insurance, while the piggyback is for 5 percent, 10 percent, 15 percent or 20 percent of value. Instead of a mortgage insurance premium, the borrower pays a higher rate on the piggyback than on the first mortgage.
Definition – the difference between a write-down and a credit loss:
Investment banks and the investment-banking units of financial conglomerates mark their assets to market values, whether they’re loans, securities or collateralized debt obligations, and label that a “writedown” when values decline.
perhaps Countrywide should have looked at lending standards when the company had a chance. Instead, foreclosure rates have doubled at Countrywide. In addition to becoming a cash flow problem, issues such as tax liability and carrying costs now concern Countrywide. Lawsuits are sure to follow. In the discovery phase some analysts predict a startling similarity between what was commonly acceptable and previous allegations against Household International and Ameriquest.
Even though the government came up with $200 billion of our money as a “new plan for help”, the fact remains that AAA bond ratings are still a joke. Why aren’t they downgraded? Sticking to the rules would strip at least $120 billion in bonds of their AAA status, extending the pain of a mortgage crisis that’s triggered $188 billion in writedowns for the world’s largest financial firms. Obviously stripping $120 billion when the Fed provided $200 billion is counterproductive, even if it is the right thing to do. Once again we are being played like a cheap guitar.
Do you think politics and influence has anything to do with today’s mortgage problems? Carlyle Capital Corp Ltd, a subsidiary of one of the most influential US private equity funds and closely tied to the Bush family, is in default on several of its securities. Carlyle is an offshore subsidiary of the Washington-based Carlyle Group, one of the most politically powerful private equity firms of the past two decades. Among the leading partners of the Carlyle Group in recent years have been George H W Bush, father of President George W Bush; James Baker III, the Bush family’s attorney and fixer; and former British prime minister John Major.