Housing Doom Housing Bubble Blog

According to Marketwatch today, many lenders can’t sell their loans on to other investors:

After mortgage lenders like Indymac offer loans, they often package them for sale to institutional investors as mortgage-backed securities. If the loans conform to the standards of government-sponsored enterprises such as Fannie Mae those organizations can buy them. If the loans don’t conform, they are sold in the private, secondary market to other investors such as hedge funds and insurers.

The private, secondary mortgage market "is not functioning," Perry wrote in an email to Indymac staff, which was posted on a website run by the company on Thursday.
It’s currently difficult to trade even AAA rated parts of private mortgage-backed securities. Only mortgages that conform to the standards of government sponsored enterprises (GSEs) like Fannie are currently trading, Perry added.

So what are the guidelines for a "conforming" mortgage? For one thing, there is a limit on the loan amount:
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"BANKERS and investors might not agree, but the recent sell-off in financial markets is good news. It may, at last, have brought people to their senses." - The Economist (Cover Story)

"Buoyant global growth and the pick-up seen in Canada underpin our optimism on the equity outlook … But unfortunately, over the last month investors have been throwing out babies with the U.S. mortgage bathwater." - CIBC Economist

"I think it’s a healthy correction. We’ve seen excess in terms of leverage and there was not enough premium for the risk structures." - top executive of Bear Stearns

"All market participants were in agreement that it would make sense to find a cooperative solution to cover all of IKB’s risks" - German regulator … no happy-talk associated with this story.

"Massive redemptions at either Raptor or Caxton are seen as unlikely because they are well established and have strong records of returns over decades." - CNBC

"The bank doesn’t have underwriting positions, in relation to credit positions, that are acting as a strain on our balance sheet … So we are confident that the losses here can be contained, and what are largely unrealised losses will not be materialised to anywhere near that level." - Macquarie’s Lucas (Australia)

"At this stage, the economic fundamentals are really unchanged … We haven’t seen an effect yet on the broader real economy, but we’re looking very, very carefully at that" - Fed’s Kroszner

This [1] was a gimme.

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Many thanks to "Austin Real Estate" for permission to reprint his Guide to Going Bankrupt in Real Estate.  For those of you who are uncomfortable with financial solvency, you should find a lot of useful hints here! Note:  Austin does indicate:

This is not a definitive guide to foreclosure. A lot of people end up in foreclosure due to many things, unforeseen events like unpreventable family illness, divorce or being jobless. This is a guide to what I call elective foreclosure.

There have been a lot of books and late night infomercials on how to become rich through real estate. Apparently, you can become rich overnight. Neat. But, no one has really written a good guide on how to go bankrupt. Sure everyone is doing it, but how can you get in on the action?
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