{"id":3201,"date":"2008-06-03T09:59:16","date_gmt":"2008-06-03T16:59:16","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=3201"},"modified":"2008-06-03T09:59:16","modified_gmt":"2008-06-03T16:59:16","slug":"and-wachovia-completes-the-gang-of-three","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3201\/and-wachovia-completes-the-gang-of-three\/","title":{"rendered":"And Wachovia Completes the Gang of Three"},"content":{"rendered":"

Wachovia<\/a> board members have forced CEO Ken Thompson to retire\u00a0<\/a>\u00a0and\u00a0Realtors should be popping champagne corks all over the nation.\u00a0\u00a0Why?\u00a0\u00a0Because Wachovia is the final reckoning of the Gang of Three\u00a0and this may very well signal the bottom of the market.\u00a0 Disclaimer #1: I usually write posts and comments backed by statistics.\u00a0 Barry Cunningham <\/a>will attest to that.\u00a0 But this post is going to be more along the lines of a\u00a0common sense case study; a thought experiment.<\/em><\/p>\n

The Gang of Three<\/strong>
\nWhen the press first started reporting on the “sub-prime” crisis (a misnomer in itself, but we’ll save that for another day), a number of us were pointing out\u00a0the real problems and what was to come.\u00a0 There were three lenders to worry about and Countrywide, by virtue of its size more than any particular wrong doing, was used as the example.\u00a0 In my weekly\u00a0speeches to Realtors, I began to refer to them as\u00a0The Gang of Three: Countrywide, WaMu and Wachovia.\u00a0\u00a0The initial problems at\u00a0Countrywide <\/a>can be seen as far back as May\u00a0of last year.\u00a0\u00a0The set-asides at Countrywide were woefully inadequate<\/a>, in my opinion, and that seems to have been borne out<\/a>.\u00a0 WaMu went down the exact same path and now, finally, we see\u00a0Wachovia doubling the losses they originally forecast<\/a>.\u00a0 Why are these three lenders leading the Lemming parade off the financial cliff?\u00a0 What do all three lenders have in common? (Hint: it’s not sub-prime loans.)\u00a0 The common thread here is Negative Amortization Loans <\/a>(cue ominous music).\u00a0 Disclaimer #2: I am on record as being VERY against Neg-Ams (I have never written one for a single client).\u00a0 Do they have a\u00a0purpose?\u00a0 Yes.\u00a0 A few\u00a0of my colleagues have used them effectively.\u00a0 But I would venture to\u00a0guess\u00a075% of the neg-am loans produced were at least a by-product of greed if not out right theft on the part of the originator.<\/em><\/p>\n

There is not space here to go into why these loans are, generally speaking, so abused and that is not the point of this post.\u00a0 The point is that these are the\u00a0big three\u00a0originators of neg-ams (Countrywide, WaMu and Wachovia through their very<\/em> questionable puchase of\u00a0Golden West Financial) and all three Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Wachovia board members have forced CEO Ken Thompson to retire\u00a0\u00a0and\u00a0Realtors should be popping champagne corks all over the nation.\u00a0\u00a0Why?\u00a0\u00a0Because Wachovia is the final reckoning of the Gang of Three\u00a0and this may very well signal the bottom of the market.\u00a0 Disclaimer #1: I usually write posts and comments backed by statistics.\u00a0 Barry Cunningham will attest to […]<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26],"tags":[160,159],"class_list":{"0":"post-3201","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","7":"tag-ken-thompson","8":"tag-wachovia","10":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":4721,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4721\/wachovia-fails-did-you-notice\/","url_meta":{"origin":3201,"position":0},"title":"Wachovia Fails… Did You Notice?","author":"Sean Purcell","date":"September 29, 2008","format":false,"excerpt":"Lost in the tsunami of bail-out failure, Wachovia gave up the ghost.\u00a0 Wachovia now joins Countrywide and WaMu as the big three option arm originators now become three of the biggest financial failures of all time.\u00a0 If this looks familiar to any posts you may have read here at BHB,\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5804,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5804\/citis-so-nice-i-bought-it-twice-a-tin-foil-hat-production\/","url_meta":{"origin":3201,"position":1},"title":"Citi’s So Nice I Bought It Twice (a Tin Foil Hat production)","author":"Sean Purcell","date":"November 24, 2008","format":false,"excerpt":"Alright, let's see if I got this straight: Less than 4 weeks ago Citi was purchasing Wachovia in a deal brokered by the FDIC. Less than 3 weeks ago the Fed injected $25 billion into Citi Less than 1 week ago Citi's shares tumbled Yesterday the Fed injected ANOTHER $20\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3355,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3355\/the-mortgage-dance-ez-just-follow-the-bouncing-ball\/","url_meta":{"origin":3201,"position":2},"title":"The Mortgage Dance? EZ: Just Follow The Bouncing Ball.","author":"Sean Purcell","date":"July 14, 2008","format":false,"excerpt":"And the beat goes on...\u00a0 but sometimes it helps\u00a0to have that little bouncing ball show us\u00a0exactly what lyric we are singing this week.\u00a0 All together now: Today the Fed suprised no one by\u00a0opening the discount window to ailing siblings: Fannie Mae and Freddie Mac.\u00a0 Together they\u00a0hold more\u00a0than half of all\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4729,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4729\/toms-top-ten-reasons-he-doesnt-like-the-bailout\/","url_meta":{"origin":3201,"position":3},"title":"Tom’s Top Ten Reasons He Doesn’t Like the Bailout….","author":"Tom Vanderwell","date":"September 30, 2008","format":false,"excerpt":"Because a government intervention the financial systems rarely works well. Because it fails to acknowledge the fundamental shift that is occurring in our society as we move from being \"overleveraged\" to using credit responsibly. Because Nancy Pelosi likes it. Because no one has been able to prove that by buying\u2026","rel":"","context":"In "Group Therapy"","block_context":{"text":"Group Therapy","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/group-therapy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":4669,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4669\/the-mortgage-dance-continues\/","url_meta":{"origin":3201,"position":4},"title":"The Mortgage Dance Continues","author":"Sean Purcell","date":"September 26, 2008","format":false,"excerpt":"I posted the following back in July and with WaMu going down it seems like a good time to bring it back to the top.\u00a0 If there is any confusion as to who is going down and why, make a point of clicking the link on the \"accounting debacle\".\u00a0 It\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5161,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5161\/mortgage-market-week-in-review-13\/","url_meta":{"origin":3201,"position":5},"title":"Mortgage Market Week in Review","author":"Tom Vanderwell","date":"October 24, 2008","format":false,"excerpt":"Here we are on Friday again.\u00a0 That means that it\u2019s time to try to summarize what\u2019s going on in the mortgage and finance world.\u00a0\u00a0 I\u2019m going to talk about a couple of main things:\u00a0 the economic fundamentals, some earnings reports\u00a0and the \u201cmargin calls\u201d that are going on in the equity\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/3201","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=3201"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/3201\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=3201"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=3201"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=3201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}