August 21, 2007
-- by Dave Johnson
We're seeing the tip of the tip of the iceberg of the debt bomb. The "subprimes" were the first to surface, and we're seeing the ripples of that spreading.
First National Bank of Arizona has become the latest casualty in the mortgage collapse that is gripping U.S. lenders.And more, More Mortgage Firms Fire Workers,
The privately held bank has shuttered its wholesale mortgage lending division, according to mortgage brokers who have spoken with the lender.
Trouble in the mortgage market spread Monday as Capital One cof said it will shut its GreenPoint Mortgage unit and fire 1,900 employees because it expects tighter credit to squeeze both lenders and home buyers out of the market.More and more bad news as the ripples spread, Thornburg Loses $930M Selling Mostly AAA Mortgage Securities,
SunTrust Banks sti also said Monday it expects to lay off about 7% of its workforce to cut costs...
The news follows an announcement Friday that First Magnus Financial was closing down and had let go its nearly 6,000 employees. And Countrywide Financial, cfc the nation's largest mortgage lender, told employees it would cut an unspecified number of jobs in its unit that specializes in loans for those with good credit but often undocumented income or assets, The Wall Street Journal reported.
Thornburg Mortgage Inc. said on Monday that it lost roughly $930 million selling billions of dollars worth of AAA rated mortgage securities, while reducing borrowing and unwinding interest-rate hedges.Later this year and throughout next year many, many adjustable mortgages reset to current rates from their initial "qualifying" rates, and many mortgage-holders will find themselves with whopping payment increases. And even THAT is only the first wave of the debt bomb.
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It's not just mortgage companies. My former employer, a network security company in Atlanta, had been trying to secure an additional round of VC funding, with no success. They laid off half their employees, including myself, on Friday.
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