Party's Over

A Quick Recap: The Day The Credit Died

Published at August 3, 2007 in Wall Street and Mortgage News/Insight. 22 Comments

Dear readers - what a day. I wish I could recap everything that happened, and I might get to it this weekend; if I try now I will have been working or on the phone or responding to email or writing for the last 13 hours straight and my wife will kill me - literally. So here is a quick recap:

A commenter correctly said that NovaStar was not the only one that ceased funding today; many other lenders did as well. Here is a quick summary of those that I know who temporarily (unless otherwise noted) pulled the lending plug today:

• NovaStar temporarily suspends funding due to “severe secondary market disruptions”
• 1st National Lending Services suspends all of the following products: Jumbo, Alt A, Pay Option Arm’s, and Seconds indefinitely (email to brokers) and throws in a round of layoffs for good measure
• First Magnus suspends all jumbo ARMs and expanded and niche products (email to brokers)
• Credit Suisse Wholesale suspends Subprime, Second Lien, Choice Payment ARMs and all 2 and 3 year ARMs
• Wachovia pulls out of Alt-A temporarily
• Wells Fargo pulls out of Alt-A
• Aegis Wholesale suspends option ARMs, expanded Alt-A and second lien products (email)
• Homecomings eliminates rebate on all Option ARMs (email)
• Countrywide increases pricing and fees on the LTV/FICO/ Documentation type grids for all documentation types, adjustments for Subordinate Financing, Cash out transactions and larger loan balances (email)
• National City makes changes
• IndyMac increases pricing and spreads on Alt-A products
• American Home Mortgage workers pack it up
• Fieldstone stops funding
• Bear Stearns says its the worst they’ve seen it in 22 years