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Michael Gracie

Drug wars begin in mortgage lender back offices

Gain-on-sale accounting rules are a mess, but I wouldn’t blame them for all the sub-prime mortgage woes. Around here, unchecked greed combined with the floating consensus that if you don’t have 5,000 square feet and granite countertops (even if they’re the low-end tiled kind) you just aren’t human, comes to mind first.

Nevertheless, I loved the headline: Subprime Mess Fueled by Crack Cocaine Accounting.

Maybe it’s all a ruse to make people think accounting is a thrilling, risky, gang-in-streets profession?

Earthlink takes $11 million in spam suit

There are a lot of people in the world that hate corporate America – I’m not one of them. They are pounding spammers with reckless abandon and the latest win is at Earthlink, where a judge has awarded them $11 million from the pockets of a mortgage spammer.

I was wondering when mortgage spammers were going to get a clue – the real estate boom looks like it is over. Since that didn’t get them to stop, maybe this Earthlink win will.

Signs liquidity is about to disappear from your market

FannieMaeLogo.gifLiquidity makes markets. Without a fair share of buyers and sellers to keep the spreads reasonable, nothing works. If you were to suck a big player out of the market, say one that provides a lot of “insured liquidity,” the same thing would happen, inefficiency, if not wholesale disruption.

What are some of the signs that a big player desperately needs an exit door?

Start with some fraud. Toss in backing out of early stage deals. Throw in a mass exodus of its managers.

I think that is plenty in the way of signs.

Bet the Debt is the latest casino game

According to a recent poll, plenty of folks would be willing to go double-or-nothing on their personal debt at an online casino.

This all comes despite the poor odds, none to surprising as most people don’t calculate risk when they sign the aggregious contract on that new European car (their thought at the time is they will just draw down the home equity line to pay it off).

Little do they know, while they are sitting around with their thumbs up their butts hoping for a miracle of chance, the farm has already been bet for them.

They’d be well served to read this instead.

Phish Tank in the House

Mortgage News Daily ran an informative story a few days back on the growing scam of mortgage phishing. The scammers send out emails offering low rate, low fee refinancing and debt consolidation loans, and use the standard “even if your credit is bad” language. This an especially dangerous situation, and likely is going to be an especially effective one as well. There are several reasons for this…
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Greenspan Scratching the Fannie

An Economist report a few days back was quietly entitled Building the American dream…or nightmare?

There wasn’t much in this article that came as a surprise, until the near end…..
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