Home lender Novastar cutting 17 pct of work force

[UpInArms]

http://today.reuters.com/news/articleinvesting.aspx?type=bondsNews&storyID=2007-03-16T230422Z_01_N16252077_RTRIDST_0_USA-SUBPRIME-NOVASTAR-UPDATE-1.XML

NEW YORK, March 16 (Reuters) - NovaStar Financial Inc. (NFI.N: Quote, Profile , Research) said on Friday that it is firing about 17 percent of its work force, the latest subprime lender to lay off workers amid soaring default rates among borrowers with poor credit.

Novastar, one of several mortgage lenders struggling with a sharp downturn in the once-booming industry, said it was cutting about 350 jobs "to align its organization with changing conditions in the mortgage market."

<snip>

The cuts, to be centered in its wholesale loan origination group, will include employees at its Kansas City, Missouri, headquarters and operation centers in California and Ohio.

<snip>

Among other subprime lenders, Ameriquest parent company ACC Capital said this week it was shutting four of its call centers nationwide and one of three loan processing centers, part of an unspecified number of job cuts.

...more...

[Raven]

1. Anyone remember the Resolution Trust Corporation?

It was established by the government in 1989 to pick up and hold the real estate based assets of failed savings and loan companies. I wonder if we are headed that way again.

[UpInArms]

3. The S&L Crisis: A Chrono-Bibliography

http://www.fdic.gov/bank/historical/s&l/

August, 1981--Tax Reform Act of 1981 enacted. Provides powerful tax incentives for real-estate investment by individuals. This legislation helps create a "boom" in real estate and contributes to over-building.

September, 1981--Federal Home Loan Bank Board permits troubled S&Ls to issue "income capital certificates" that are purchased by FSLIC and included as capital. Rather than showing that an institution is insolvent, the certificates make it appear solvent.

1982-1985 Reductions in the Bank Board's regulatory and supervisory staff. In 1983, a starting S&L examiner is paid $14,000 a year. The average examiner has only two years on the job. Examiner salaries are paid through OMB, not the Bank Board. During this period of supervisory and examination retraction, industry growth increases. Industry assets increase by 56% between 1982 and 1985. 40 Texas S&Ls triple in size between 1982 and 1986; many of them grow by 100% each year. California S&Ls follow a similar pattern.

January, 1982--Federal Home Loan Bank Board reduces net worth requirement for insured S&Ls from 4 to 3 percent of total deposits. Additionally, S&Ls are allowed to meet the low net worth standard not in terms of generally accepted accounting principles (GAAP), but of even more liberal regulatory accounting principles (RAP).

[NYC]

6. Thank you for that very useful link.

:hi:

[UpInArms]

7. you're welcome!

I remember it all just like it was yesterday. So many tragedies for corruption and greed.

It feels like the second verse will be worse than the first.

[NYC]

8. The news people never provided a detailed report on it.

It was not easy to follow, and I think they were hoping it would all go right over our heads.

I remember that Bush, Sr. occupied an apartment in Texas belonging to the Resolution Trust Company. (I also remember Neil Bush of Silverado Savings & Loan.)

That whole (undivulged) scandal was a major expense to the taxpayers. How many of the thieves suffered any consequences?

I, too, fear the second verse will be worse than the first.

The outcome will be another major expense to the taxpayers. How many thieves will suffer any consequences? (I would call that a rhetorical question, but it's more of a joke.)

[WannaJumpMyScooter]

2. Does not surprise me, these schmucks

had my mortgage for a couple of years.
We fell behind for reasons beyond our control, while trying to work it out with them, I have to say, I have never run into a more inflexible, myopic, bunch of ill-tempered shitheads in my life.

Good riddance to bad rubbish. I hope this ruins the company, too.

[salin]

4. ameriqwest.... I seem to remember that its founder was a bushjr nomination

but I don't recall for what he was nominated.

[UpInArms]

5. Roland Arnall

http://www.watchingamerica.com/nrchandelsblad000014.html

It was a bad idea for President George W. Bush to appoint entrepreneur, millionaire and Republican fund raiser Roland Arnall to the post of Ambassador to the Netherlands. Arnall comes with significant baggage. His formal appointment has been held up since July because of a U.S. Justice Department probe into mortgage insurance company he founded, Ameriquest.

Ameriquest is under investigation for alleged fraudulent activities during the sale of mortgage insurance policies. It is expected that the U.S. Senate will block confirmation because the candidate for the ambassadorship has not properly resolved his legal issues with the Justice Department. Late last week, he had to answer some very pointed questions from Senators regarding his business dealings. It is one thing that Ameriquest is not highly regarded in the U.S. But what is really held against the candidate is the fact that many of Ameriquest’s customers, victimized by the company’s fraudulent practices, are now being stonewalled while trying to get their share of the multi-million dollar settlement (apparently agreed upon by both parties). This remains a major blemish on Arnall’s record. It also causes the post of Ambassador to The Netherlands to remain unfilled.

Primarily, the blame for this latest blunder lies with Bush himself. There is nothing against awarding a major appointment to a significant election campaign contributor. It may be better that a friend of the president (who has a track record of putting his money where his mouth is) may have far better access to the President and his inner circle than a career diplomat that has a minimal relations with the President and may belong to the other party. Many Ambassadors to The Netherlands have gotten their assignment due of the fact that they were significant campaign contributors.

However, this type of appointment can by very risky politically, as the Arnall case proves. The issue surrounding the company he no longer leads - but still owns - came up immediately after Bush proposed his name. The president should have seen this coming: a long, slow-moving investigation, sharp criticism during Senate hearings, and disruption of the appointment process, leaving the Arnall appointment in permanent limbo.

...more...

[Mr. Ected]

9. I Once Had To Fax Them 140 Pages For a Loan Closing Approval

Eight people waiting for their response. It took an hour to fax the documents. The Novastar people knew it was coming. We received the fax confirmation at 5:00 pm on the dot. When we called our contact there, they had left for the day.

Needless to say, they can kiss my lily white.

And I'm a Kansas City boy, too!

[WannaJumpMyScooter]

10. Me too, but I don't know any of the

names on the board, they must all be JoCo's or from out of town.

I mean, I went to Southwest back in the day when the whole power structure went there... not one name was familiar.

I thought the same thing. That I must know someone to get through this shitty company somehow.
No luck.