You Laugh Because it Hurts too Much to Cry
The subprime meltdown is even hurting monkeys!
Regarding my earlier blogs on Countrywide calling customers to remind them to pay their mortgages (which Countrywide confirms), I received this email from Michael Paslawskyj. He's a Senior Economist for the American Institute for Economic Research who says he's spent much of the last 25 years working in financial services and says he's never heard of such a policy:
"About the only thing I can think of is that this is being done while the loans are in a warehouse pending them becoming "wet", that is, have a positive payment history, usually one or two payments, so that the loan can be securitized. It is possible that the originator knows these are loans that could be a problem and wants to baby-sit them until they are safely (for the originator) out the door. You see, if the first or second payment is missed the loan can't be securitized and the originator is stuck with it."
And That's Not All
It's not just lenders reaching out in new ways. David Kneupper passed along this letter which a friend received from Fidelity:
"Your recent account balance indicates that more than 22% of your portfolio is in cash...you might prefer the relative stability and predictability that cash can provide. But remember that when your cash is on the sidelines, you could be missing out on potential opportunities."
Yeah, and I could be missing out on an ulcer, too...
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