Comments on: Where is the Fat Lady? She needs to start singing!

By: Cliff Pape

Cliff Pape — Fri, 18 Jul 2008 13:19:26 +0000

I agree with Rob and the other posters. Yes, good deals are getting funded the old fashioned way. However, as an economist Rob is right if Fannie and/or Freddie went down markets would more than likely freeze. Given that scenario no deals would be funded overnight.

It’s hard to understand how close we really are to the edge until a dramatic event occurs to wake us up. Hopefully all the talk from Bernanke and Paulson will continue to instill confidence in markets.

By: Colin - Buying Florida Property

Colin - Buying Florida Property — Thu, 17 Jul 2008 12:55:20 +0000

It’s hard to dispute that, in retrospect, lax lending attitudes of the past few years were crazy and were almost certain to result in today’s problems. We’ve probably all got some war stories of loans being dispensed like candies and borrowers who were encouraged to stretch things too far. At the time it was fascinating but now it seems unreal how many lenders and borrowers got caught up in it because of (basically) greed.

On the question of how far along the DEFCONOMY scale we’ve progressed, I’d put it at 3 rather than 2 – because there is still some level of credit around for some people! I’m also a firm believer that pessimism can bring about the very troubles that it fears – so let’s stay positive and publicize the positive signs (if/when they appear!) just as much as the melodrama of Indy Mac, Freddie Mac, etc. I do agree that one of two more big banks cracking under the pressure could transform the situation quickly. Let’s hope we avoid that!

By: Mike Taylor

Mike Taylor — Thu, 17 Jul 2008 12:48:12 +0000

I definitely think we are going to see a few more big banks fail before we get out of this. I just heard something on NPR about the government has a secret list of over 30 banks they feel are in trouble. I am ready for this to be over.

By: rob powell

rob powell — Wed, 16 Jul 2008 21:42:37 +0000

Thanks for the comment Denton.

The problem is IndyMac may just be the beginning of several banks being exposed for being “too greedy.”

By: rob powell

rob powell — Wed, 16 Jul 2008 21:38:34 +0000

thanks for the comment Glenn.

You are talking about current conditions…and I would agree with you. BUT… The post was directed toward a prediction….about what may or may not happen.

By: Denton Ward

Denton Ward — Wed, 16 Jul 2008 21:35:49 +0000

Real estate lending guidelines were out of control in the years prior. We are back into the “old fashioned” or traditional days of home financing. If you have money in the bank and have a good credit score, you can still get financing from hundreds of lenders.

The sky isn’t really falling, it is merely adjusting back to where it once was.

I guess IndyMac got a little too greedy and it bit them in the butt!

By: Commercial Mortgage Loans - MasterPlan Capital LLC - Glenn F.

Commercial Mortgage Loans - MasterPlan Capital LLC - Glenn F. — Wed, 16 Jul 2008 20:39:33 +0000

“Most forms of credit become virtually nonexistent”…Things are bad, but lets not get melowdramatic.

Good deals are still getting funded, just not through traditional lenders. LTVs are lower, DSCR requirments are higher, 100% financing is dead.
All this is true, but the sky is not falling.

Indymac went out-of-business because they were reckless and unprepared for this down-turn. There are still strong banks out there…one of them will buy Indymac from the feds within a month.