DISQUS

Blown Mortgage: Lehman may mark down $61 billion worth of mortgage assets

  • Bill Rice · 1 year ago
    I am doubling down on that bet and putting the rest of my chips on (not an I-bank, but big all the same) Washington Mutual too.
  • Doug · 1 year ago
    Wachovia is going down also.
  • morganb · 1 year ago
    wachovia and wamu are definitely going down... as are many other banks
    - but wall street i-banks i only see lehman in the cross hairs...
  • Fielding Mellish · 1 year ago
    Lehman (dba Aurora Loan Svcs) was doing the absolute goofiest, riskiest most-prone-to-fraud loans there were in 2005-2006: 100CLTV NO Ratios, etc... We can never tell from the outside how much of that risk was successfully pawned off on other investors and/or MI companies, but a 20% write-down on that kind of freaky Alt-A product seems woefully inadequate. I know of an own-occ 80LTV SISA on a California condo closed in 2004. Purchase price of $275k. Lehman now has a "BPO" (broker price opinion) on the unit for $109,000. Lehman is now claiming fraud on the basis of borrower's bogus stated income. Their correspondent is being billed - after accrued interest, legal fees, etc... - $180,000. That's an 80% loss on a loan where the borrower put 20% down. Other situations are even worse: if they bought in 2006, if they put zero down, etc...

    A 25% drop in property value can be a 50-60% loss on a 100% loan. I suspect Lehman is worse off than this recent write-down would suggest.
  • Richard Dale-Mesaros · 1 year ago
    My partners and I are eagerly anticipating the coming months..... we're raising $20MM to purchase defaulted first mortgages in Mass and New Hampshire and we hope we are able to negotiate big enough discounts to warrant us getting involved. Should be interesting to see how this next period pans out!

    Yours in the starting blocks,

    Richard Dale-Mesaros :)

    Chief Deal Weaver
    www.BlackWidowNetwork.com
  • Don · 1 year ago
    Well, those Boston loans should be interesting. The way mortgages in MA and the rest of New England is really screwy. The last mortgage banker I worked for had a lot of problems with our Boston office. There were lots of problems because they where notorious for funding high cost loans back there and it was really a pain to sell those loans.
  • morganb · 1 year ago
    there are going to be all sorts of worms that come out from under this
    rock. you can't put the genie back in the bottle, as they say..