  3rdworldcity Member Username: 3rdworldcity Post Number: 885 Registered: 01-2005 |
...or first step in survival? Countrywide, which buys all of Quicken's loans, announced this morning that is is drawing down it entire unsecured credit line of $11.5 billion (provided by 40 banks around the world). CW said it was "forced" to take this step in order to fund its ongoing operations as it no longer can tap its conventional credit markets. It also said it has "accelerated" plans to "migrate" its mortgage operations into wholly owned Countrywide Bank, FSB. [whatever that means.] (The bank has 2 branches in the Detroit area.) I personally have no idea whether that money is sufficient to fund the mortgages in its pipeline. Assuming it is, it would be reasonable to assume the CW will then stop making (or purchasing) new loans and will attempt to survive on its servicing revenue, which should be substantial. Based on a couple of conversations w/ mtg bankers who have a pretty good handle on the industry, CW has a better than average chance of surviving, but many lenders from whom it usually purchases loans will not. The whole debacle seem to be getting worse rather than better. | ||
Goat Member Username: Goat Post Number: 9698 Registered: 10-2003 |
As stated on another thread, Feds are saying a 50/50 chance of recession. Great fun for all! | ||
Raptor56 Member Username: Raptor56 Post Number: 41 Registered: 05-2007 |
That's what happens when a bank owns too many foreclosed homes and can't get rid of them. money drain. In a some what ideal fantasy world, Countrywide would go belly up, not sell their mortgages, and I would no longer have a mortgage payment  | ||
Kid_dynamite Member Username: Kid_dynamite Post Number: 183 Registered: 06-2007 |
Let me correct you. Countrywide does not buy all of our loans. You dont know what you are talking about. It is more like 60% if I had to guess. QL has many other investors. QL is in a pretty good position in terms on liquidity right now. The crisis that exists might take a few months to get through, but things will settle down. | ||
Lilpup Member Username: Lilpup Post Number: 2614 Registered: 06-2004 |
Oh, this debacle is just getting started, and it's going international. | ||
Drankin21 Member Username: Drankin21 Post Number: 113 Registered: 12-2003 |
It's scaring the hell out of me. I am moving to Detroit from overseas and am terrified to even BUY a house right now. | ||
Supergay Member Username: Supergay Post Number: 74 Registered: 05-2006 |
Possibly intergalactic. | ||
Dannaroo Member Username: Dannaroo Post Number: 130 Registered: 05-2006 |
I don't plan to buy a home anytime soon... I'm shooting for inheriting one instead. | ||
Gannon Member Username: Gannon Post Number: 9862 Registered: 12-2003 |
Most of the moon is held outright, Super, no mortgages on those cheesy deeds. We could only arrange long-term lease deals on the surface of Mars...specifically NO subterranean, h-m-m-m-n submartian?!, rights at all! None of those star-naming deeds are enforceable, don't think there are mortgages on 'em anyways. | ||
Wazootyman Member Username: Wazootyman Post Number: 245 Registered: 02-2006 |
Quicken sells an overwhelming majority of its loans to Citi and/or Countrywide. Quicken is also in the middle of a hiring freeze, and on the verge of cutting almost 20% of its workforce. I also understand that right now it is very difficult to qualify many people who would have outright qualified months ago. Quicken's business model is largely dependent on volume of new loans, and right now that puts them in a lot of trouble. You'll notice that their advertising has changed a lot lately; big money making programs like the "Secure Advantage" are no longer available to anyone. | ||
Kid_dynamite Member Username: Kid_dynamite Post Number: 184 Registered: 06-2007 |
Watoozyman, let me restate this...its more like 60%. You are wrong, it is not an overwhelming majority. | ||
Sstashmoo Member Username: Sstashmoo Post Number: 265 Registered: 02-2007 |
Countrywide Mortgage is getting exactly what they deserve. They will loan ANYONE money with very little research involved. Heard of several "deals" in the area that didn't go their way and it was their fault for not doing their homework. Not me personally, but I know of some that are really working them over. CW wound up upside down on an S'load of vacant houses and no market to sell them in. This announcement comes as no surprise. | ||
Quozl Member Username: Quozl Post Number: 1193 Registered: 07-2005 |
quote:You're going to have to do better than that Kid Dy-NO-mite, that QL Kool-Aid you have been generously giving us to gulp is not working anymore. I heard from some friends of mine over there the grape flavor is LETHAL...  (Message edited by quozl on August 16, 2007) | ||
Cincinnati_kid Member Username: Cincinnati_kid Post Number: 5 Registered: 07-2006 |
Quicken Loans is being sued by a lot of people for fraudulent loan practices. I've heard that a lot of the loans they wrote, mislead a lot of consumers. Now, I understand that its the consumers responsibility to understand what he or she is signing, but Quicken, and other mortgage companies just FLAT out took advantage of consumers. | ||
3rdworldcity Member Username: 3rdworldcity Post Number: 886 Registered: 01-2005 |
Kid_dynamite: My source is a senior person there. Possibly I should have said CW buys "almost" all of QL's loans, and you yourself seem to be guessing about the percentage. You're in the business so hopefully you can shed some light on the situation. How are QL's other investors (loan purchasers) faring? Can't be doing much better than CW, which is truly a heavyweight, can they? Does QL sell directly into the secondary mkt - Fanny Mae? Is QL still making loans? Can it fund the ones in the pipeline? Any repo liability? Because QL is privately held there's no way to know what its financial position is, and I guess it's none of our business. However, your statement that QL "is in a pretty good liquidity position now" seems to fly in the face of reality. It's hard to believe that if CW has to wipe out its credit line QL can be doing much better. I'd love to see you shed some light on the subject re: the mkt in general or better yet, QL specifically if you can. And, Gilbert has made so many public statements about the prospect of moving into Detroit, it seems to me that he should follow up and let everyone know where he stands on the issue now in light of the mtg mkt meltdown. What would that hurt? Thanks in advance for any new info you can provide us. I am sure that everyone wants to see QL come out of this situation Ok. | ||
Lilpup Member Username: Lilpup Post Number: 2615 Registered: 06-2004 |
CW is having problems because they had too little liquidity Quicken may not have that problem | ||
Kid_dynamite Member Username: Kid_dynamite Post Number: 185 Registered: 06-2007 |
woah woah woah.. Cincinnati ..please back up your claim with evidence. That is an outright lie. (Message edited by kid dynamite on August 16, 2007) | ||
East_detroit Member Username: East_detroit Post Number: 1167 Registered: 11-2003 |
Does this mean CW will stop calling my house and offering home equity loans every other day? | ||
Sstashmoo Member Username: Sstashmoo Post Number: 266 Registered: 02-2007 |
Quote: "woah woah woah..Cincinatti..please back up your claim with evidence. That is an outright lie." Wasn't there a little scam going with closing costs and Quicken? Alot of people got bit by that one or so I heard. | ||
3rdworldcity Member Username: 3rdworldcity Post Number: 887 Registered: 01-2005 |
Lilpup: Please, where do you come up w/ this stuff? CW is the strongest, most diversified mortgage lender in the country and just tapped into $11.5 billion. EVERYONE in the industry is having liquidity problems (except some of the major banks, where residential lending is a relatively small part of their business.) Read the WSJ, Barron's and the trades. | ||
Bumble Member Username: Bumble Post Number: 310 Registered: 11-2004 |
Lots of companies get sued. What I want to know is if I missed the new HQ announcement. | ||
Cincinnati_kid Member Username: Cincinnati_kid Post Number: 6 Registered: 07-2006 |
My Brother-in law has a friend that is suing Quicken Loans. His Real Estate lawyer told him he has about 12 other clients that are suing them. Do you work for Quicken Kid dynomyte? Why are you so defensive? They aren't above doing wrong any more than any other mortgage company. I hope more people sue them if they scammed people, they deserve it. (Message edited by cincinnati_kid on August 16, 2007) | ||
Sharmaal Member Username: Sharmaal Post Number: 1202 Registered: 09-2004 |
http://freep.com/apps/pbcs.dll /article?AID=/20070816/COL06/7 0816033 | ||
Kid_dynamite Member Username: Kid_dynamite Post Number: 186 Registered: 06-2007 |
Yeas I do. That is BS. Show me some proof of that and I will retract that. Until then, you are making this up. | ||
Johnlodge Member Username: Johnlodge Post Number: 1839 Registered: 10-2003 |
"Quicken has moved in recent weeks to cut costs, slow hiring and shift all its retail lending to “plain vanilla” very-low-risk loans, Gilbert said. But it has not laid off any workers and still expects to grow mortgage lending volume this year by about 10% to more than $20 billion. Gilbert also said Quicken/Rock’s much anticipated decision about where to locate a new headquarters will not be derailed or delayed by the national mortgage market woes. “We think this is a blessing in disguise for the company because we think that there’s so much carnage out there – less competitors, less people buying marketing and advertising on the Internet where we play. Although it’s painful for the whole industry and everybody going through it, we think it’s one of those things that’s going to be beneficial to us in the long run,” he said. “We’re still talking” about options for headquarters, he said, but no final decision has been made and none is imminent. Other people close to the discussions said Quicken/Rock’s search is focused primarily on downtown Detroit, but is tied in part to what happens with other potential big Detroit projects, such as a new arena for the Detroit Red Wings. " WOOOOOOOO, watch out for those pieces of sky guys. They really smart when they whack you in the noggin. (Message edited by johnlodge on August 16, 2007) | ||
Emu_steve Member Username: Emu_steve Post Number: 439 Registered: 11-2006 |
quote: "Other people close to the discussions said Quicken/Rock’s search is focused primarily on downtown Detroit, but is tied in part to what happens with other potential big Detroit projects, such as a new arena for the Detroit Red Wings. " Interesting. I assume (and have assumed) that both or neither will happen. I really wonder what Gilbert would do if Ilitch decides not to build a new hockey arena nearby. | ||
Lilpup Member Username: Lilpup Post Number: 2616 Registered: 06-2004 |
quote: That $11.5 billion is emergency funding they just tapped today and they're tapping all of it. That's why it's viewed so negatively. Maybe you need to upgrade your reading material ~ http://bloomberg.com | ||
Quozl Member Username: Quozl Post Number: 1194 Registered: 07-2005 |
Oh good, another delivery of Kool-Aid to feed the masses. A national mortgage industry credit squeeze is a "Blessing in disguise" for QL? Yea, right on Gilbert. The relocation is "tied in part to what happens with other potential big Detroit projects, such as a new arena for the Detroit Red Wings." Is he talking about new housing developments for the poor, Ford moving out of Dearborn, Boeing rerelocating from Chicago or am I totally missing something here? I am going back to carbonated beverages, no more QL Kool-Aid for this gent. | ||
Belleislerunner Member Username: Belleislerunner Post Number: 338 Registered: 12-2003 |
Quicken thrives on new originations because it sells those loans to "secondary market" players who securitize the loans into securities which investors then purchase. The Freep article noted that Quicken had switched over to 100% loans in conformity w/ agency requirements. Agency refers to Fannie Mae, Freddie Mac etc - Government sponsored entities (though publicly traded) which purchase the loans, may/may not guarantee the cash flows and sell the securities to investors. However, Fannie/Freddie currently are under a lot of pressure relative to accounting and regulatory issues and currently have their "mortgage portfolio" set at a capped level. If investors no longer demand the securities issued by "agencies", then "agencies" will no longer need to buy the loans from originators such as Quicken. Alternatively, the agencies may reach their cap and won't be able to purchase additional loans. Which leaves the originator w/ the loan to suffer 100% of the default risk. A large number of variables at play. But most of it was caused by greed - both at the corporate level and individuals living beyond their means. | ||
Gistok Member Username: Gistok Post Number: 5124 Registered: 08-2004 |
No Quozl, you're definitely missing something there... we just don't know what... |
