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No. of Recommendations: 4
Hi Mish,

The offer was rejected because owning ownit was worth less than ZERO.
It was a liability with no redeeming qualities.
There are many more coming too


Sure are.... and ALL in the same category of lenders (subprime) and all for the exact same reason (Liar's Loans... the 'wink/nod' tolerance of outright credit fraud executed in shared responsibility between greedy borrowers and slime-dog lowest-level sales schmucks allowed to sleeze their way into the mortgage finance business.)

Borrowers (along with their loan officers) that simply outright lied to be able to borrow more money than they could afford (most frequently in the heat of "always rising real estate" speculation) are simply discovering that time and cycle is inescapable, and since they can't pay the mortgage bills, they are walking from them. The properties are still there, and in most cases are in fine shape. The INVESTORS (the back end... like Bear & DLJ & Lehman) are demanding the buyback clauses in the mortgage banker's (OwnIt, MLN, AmeriQuest, etc.) contracts... and (surprise) the bankers don't have the liquidity to make good on the buyback demands.

The cows are meandering home. There WILL NOT be any overwhelming 'collapse' industry wide however... there's plenty of 'strong hands' that WILL buy the discounted operations & paper to support the markets... these strong hands have watched the margins squeezed from pricing and servicing, and (being strong hands) knew that a cycle extreme was approaching giving them a rare opportunity to buy with blood in the streets... There will be no 'collapse' because the strong hands are still ruthlessly competitive with each other, and will begin buying when the time and price is right...

But the 'hustlers' (the street-front jonny-come-lately originators) are bleeding and will continue to fall.

Dave Donhoff
Strategic Equity & Mortgage Planner
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