Forget all the news about the bailout, and about Citi/Wachovia! More importantly, Heather Locklear was arrested! Rumors of thousands of men lined up to post bail are probably exaggerated. Obviously this mortgage crisis is proving too much for her.

UPDATE 1: Citi beat Wells on Wachovia, will acquire them for $2.16b. UPDATE 2: Morgan/Mitsubishi deal is done for $9b.

What kind of loan do consumers want? Is that like asking, “What kind of camera do you want?” “Feature creep” is a common problem with items like cameras and phones, with appliances, cars, etc. having user manuals over a hundred pages long and so many feature that consumers give up. Average consumers just couldn’t figure [...]

Last week, I discussed possible outcomes of the Goldman Sachs audit of Wachovia’s loan portfolio. Goldman was just hired, and already this week Wachovia announced that they’re discontinuing the negative amortization option on their Option ARMs. This is the case I was making when discussing it last week. Option ARMs have come to be defined [...]

A majority 69% of Countrywide shareholders voted today to approve takeover of the company by Bank of America. Countrywide will drop the name in short order and is likely also to drop many product lines. According to Bloomberg:

Wachovia, the last name-brand player besides Countrywide still active in neg-am Option ARMs, has hired Goldman Sachs to evaluate its loan portfolio. Wachovia’s slogan on their wholesale broker rate sheets is “We Lend Our Own Money, We Make Our Own Rules.” That seems likely to change as outsiders exert more influence over the process.

The last time mortgage rates were this bad compared to Treasury rates, dinosaurs roamed the earth…and this morning it continues. After Jobless Claims fell 24,000 to a much lower-than-expected 351,000, we find the 10-yr at 3.67% but 30-yr mortgage prices worse by .50 in price. Fixed income investors need to be reminded why they should [...]

Last month, we talked about Active Mortgage Management, the process of adjusting your mortgage strategy as the markets and your own circumstances change. We talked about this process in the context of a market cycle from 2002 to 2006, during which time rates hit all-time record lows then rose off of those lows. Because many [...]

In recent months, you can’t turn on the radio or pick up a newspaper without being told about so-called Option ARM home loans. The radio ads tell you if you’re paying more than $1608 per month for your $500,000 loan, you’re paying too much. And the newspaper headlines warn of financial doom from negative amortization.