This is the last month of my first 30 years in the business. Let’s take a look at what has happenened in the last 30 months.
May 6, 2006: Merit Financial is the first sub-prime mortgage recorded on Implode list to shut their doors.
December 6, 2006: Sebring (#5 on the Implode list) is the first major sub-prime lender to announce their dismiss….. most experts feel that this was the company that signaled the “beginning of the end” of subprime. There were a total of 9 lenders on the implode list in 2006.
March 16, 2007: National lender with a local name falls…. Ameriquest is #41 on the Implode list.
May 17, 2007: Federal Reserve Chairman Ben Bernanke said growing number of mortgage defaults will not seriously harm the U.S. economy.
June 29, 2007: Banking regulators complete new guidelines calling on lenders to strictly evaluate borrowers’ ability to repay home loans. Prime Rate is cut to 5.25%.
Aug. 22, 2007: American Home Mortgage shuts down overnight. Most experts agree that this company was the company that started the down ward spiral of “Niche” or “Alt-A” mortgages. AHM was #109 on the Implode list.
Aug. 7, 2007: Fed leaves key federal funds rate unchanged, says credit problems and housing slump pose increasing risks to U.S. economy.
Aug. 9, 2007: Fed pumps $24 billion into U.S. banking system through large purchases of securities, while European Central Bank makes record cash injection of $130 billion into its markets to shake off credit fears. Wall Street suffers its second-worst decline of the year as Dow Jones industrials drop by nearly 400 points.
Aug. 10, 2007: Fed pumps another $38 billion in temporary reserves into the U.S. financial system; government rejects request for mortgage finance giants Fannie Mae and Freddie Mac to take on more debt.
Aug. 17, 2007: Fed tries to stabilize financial markets by approving 0.5 percentage point cut in its discount rate on direct loans to banks.
Aug. 31, 2007: President Bush announces plan to use Federal Housing Administration, which insures loans for low-income borrowers, to offer government-guaranteed loans to around 80,000 homeowners in default.
Sept. 18, 2007: Fed cuts key federal funds rate by a half point to 4.75 percent.
Sept. 19, 2007: Government raises debt portfolio limits for Fannie and Freddie by more than 2 percent annually.
Sept. 20, 2007: Bush acknowledges “some unsettling times” in the housing and credit markets, while Treasury Secretary Henry Paulson signals the administration would consider allowing Fannie and Freddie to temporarily buy loans bigger than the current cap of $417,000.
Oct. 4, 2007: House approves tax break for homeowners who have mortgage debt forgiven as part of a foreclosure or loan renegotiation.
Oct 2, 2007: Large sub-prime lender, WMC shuts down (#161 on the implode list). Between 1/107-12/31/07, there were 201 lenders added to the implode list.
Oct. 10, 2007: Paulson announces a new mortgage industry coalition aimed at helping homeowners avoid foreclosure.
Oct. 11, 2007: House and Senate Democrats reach a compromise on legislation permitting Fannie and Freddie to increase mortgage holdings by 10 percent from current limit; Bush administration rejects that idea.
Oct. 15, 2007: Three largest banks – Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co. – announce a plan organized by Treasury Department to buy securities hurt during the summer’s mortgage turmoil.
Dec. 5, 2007: Congressional aides say the Bush administration has hammered out an industry agreement to freeze interest rates for certain subprime mortgages for five years.
Dec. 6, 2007: The Mortgage Bankers Association reports that home foreclosures hit an all time high in the third quarter.
Dec. 11, 2007: The U.S. Federal Reserve cuts its key interest rate by a quarter-point to 4.25 per cent, the third rate reduction in three months as the central bank tries to keep the country out of a recession. The reduction came as Fed officials signaled that further cuts are possible if a severe downturn in housing and a crisis in mortgage lending get worse.
Jan. 10, 2008: Federal Reserve Chairman Ben Bernanke pledges to slash interest rates yet again to prevent housing and credit problems from plunging the country into a recession.
Jan. 11, 2008: Bank of America Corporation soon will be the nation’s biggest mortgage lender and loan servicer. The Charlotte, N.C.-based company announced that will buy Countrywide Financial for just over $4 billion in stock. The deal rescues the country’s biggest mortgage lender and expands the financial services empire of the nation’s largest consumer bank.
Jan. 15, 2008: The Federal Reserve, working to combat the effects of a serious credit crisis, says it auctioned $30 billion in money to commercial banks at an interest rate of 3.95 percent. It marked the third in a series of innovative auctions the Fed began last month as a way to provide cash-strapped banks with the reserves they need. The hope is that the increase in resources will keep banks lending to consumers and businesses and prevent the credit turmoil that hit in August from pushing the country into a recession.
Jan. 22, 2008: The Federal Reserve’s unexpected slashing of a key interest rate by a bold three-quarters of a point appears to be having the desired effect on world markets. The move has sent Asian stocks up after two days of steep losses. Fears of a U.S. recession have battered the region’s markets since the start of the year.
Jan. 24, 2008: Democratic and Republican congressional leaders reach a tentative deal on tax rebates of $300 to $1,200 per household and business tax cuts to jolt the slumping economy.
Jan. 29, 2008: The House overwhelmingly passes a $146 billion aid package that would speed rebates to most taxpayers. But the Senate could slow things, with lawmakers there backing a larger package that adds billions of dollars for senior citizens and the unemployed.
Jan. 30, 2008: The Fed cuts a key interest rate (to 3.00%) for the second time in just over a week, reducing the federal funds rate by a half point. The rate cut marked the fifth time that the Fed has cut the funds rate since Sept. 18 in response to the severe credit crisis which hit global markets in August. The action was expected to be quickly followed by cuts in banks’ prime lending rate, the benchmark rate for millions of consumer and business loans.
Feb. 7, 2008: Congress passes an economic stimulus bill and the White House says President Bush will sign it. Rebate checks could start arriving in the homes of Americans in May, averaging $600 to $1,200 for most taxpayers. Disabled veterans, the elderly and other low-income people will get around $300.
Feb. 12, 2008: Homeowners threatened with foreclosure could get a 30-day reprieve under a plan announced by the Bush administration. “Project Lifeline” is meant to cover people with all types of mortgages, not just subprime loans that were the focus of previous relief efforts.
The Federal Reserve has auctioned another $30 billion in funds to commercial banks, meant to alleviate the credit crunch. It is the fifth in a series of auctions that have pumped $130 billion into the nation’s banking system.
March 3, 2008: Federal Reserve Chairman Ben Bernanke calls for additional relief and urges lenders to help distressed homeowners by lowering the amount of their loans. He says foreclosures are likely to keep rising even as the government and the housing industry begin relief efforts.
March 6, 2008: The Mortgage Bankers Association reports that home foreclosures hit an all-time high in the final quarter of 2007. Meantime, the Federal Reserve says the percent of equity homeowners have in their houses has fallen below 50 percent for the first time since 1945.
March 15, 2008: The Federal Reserve, in an extraordinarily rare weekend move, took bold action Sunday evening to provide cash to financially squeezed Wall Street investment houses, a fresh effort to prevent a spreading credit crisis from sinking the U.S. economy.
April 10, 2008: The Senate passes a bipartisan measure aimed at boosting the housing market and easing the threat of foreclosures. The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, as well as $4 billion in grants for communities to buy and fix up abandoned homes. The White House opposes the plan, saying parts of it would actually make the problem worse by depressing some home values.
April 30, 2008: Scrambling to shore up the faltering economy, the Federal Reserve cut interest rates to the lowest point (2.00%) in nearly four years Wednesday as the nation teetered on the edge of recession. Wall Street rallied at first but then pulled back, concerned that the reduction might be the last for a while.
May 2, 2008: The Federal Reserve and other regulators have begun steps to end “unfair and deceptive” credit card industry practices assailing consumers who are already struggling to cope in a bad economy. The proposed rules would be the biggest clampdown on the industry in decades.
June 17, 2008: The Federal Reserve has auctioned another $75 billion in loans to squeezed banks to help them overcome credit problems. The auction is the 14th since the program began in December.
July 11, 2008: A mortgage rescue to help struggling homeowners avoid foreclosure and get more affordable, safer loans has passed the Senate. The measure faces a bumpy road in the House. It includes a modernization of the Federal Housing Administration and would create tighter controls on mortgage giants Fannie Mae and Freddie Mac.
July 13, 2008: Scrambling to bolster eroding investor confidence, the Federal Reserve and the Treasury Department announce steps to brace slumping mortgage giants Fannie Mae and Freddie Mac. The plan is intended to signal the government is prepared to take all necessary steps to prevent the credit market troubles that erupted in 2007 with losses from subprime mortgages from engulfing financial markets.
July 14, 2008: The Federal Reserve adopts rules to give homebuyers more protection from shady lending practices. The board approves a plan that would crack down on the type of practices that have hurt many of the riskiest borrowers. Lenders wouldn’t be able to make loans without proof of a borrower’s income.
July 23, 2008: The House approves legislation to give the ailing housing market a boost. It targets help for 400,000 homeowners facing foreclosure while giving support to mortgage giants Fannie Mae and Freddie Mac. The highlights of the bill include: $300 billion to provide more affordable mortgages to troubled homeowners, nearly $4 billion in grants to help communities fix up foreclosed properties and a $7,500 tax credit for first-time homebuyers.
July 30, 2008: The Federal Reserve announces that it is extending emergency borrowing to Wall Street, and is also making other moves to ease the crippling credit crunch. The program will now be available through January 2009, rather than ending in mid-September as was originally planned.
July 30, 2008: President Bush signs a housing bill seen as the most significant in decades (H.R. 3221). The measure lets homeowners who can’t afford their payments refinance into more affordable government-backed loans rather than lose their homes. As many as 400,000 struggling homeowners could stand to benefit.
Aug. 12, 2008: The Fed has auctioned another $25 billion in loans to U.S. banks, at a rate of 2.754 percent. In the latest auction, the Fed says it offered the loans for an extended period of 84 days, rather than the 28-day period for the previous loans.
Sept. 7, 2008: The Bush administration announced it was seizing the troubled mortgage giants Fannie Mae and Freddie Mac in a bid to help reverse a prolonged housing and credit crisis. Both Fannie Mae and Freddie Mac were being placed in a government conservatorship, a move that could end up costing taxpayers billions of dollars.
Sept, 14, 2008: Lehman Brothers, burdened by $60 billion in soured real-estate holdings, filed a Chapter 11 bankruptcy petition in U.S. Bankruptcy Court after attempts to rescue the 158-year-old firm failed.
Sept. 15, 2008: Bank of America Corp. announces it would acquire Merrill Lynch in an all-stock transaction that should lift the uncertainty shrouding the investment bank since the start of the credit crisis over a year ago. The $50 billion deal would create a bank that offers everything from fixed-income trading to credit card lending and will rival Citigroup Inc., the biggest U.S. bank in terms of assets.
Sept. 15, 2008: A stunning makeover of the Wall Street landscape sent stocks falling precipitously, with the Dow Jones industrials sliding 504.48 points in their worst point drop since the September 2001 terrorist attacks. Investors reacted badly to a shakeup of the financial industry that took out two storied names: Lehman Brothers and Merrill Lynch Co. Stocks also posted big losses in markets across much of the globe.
Sept. 16, 2008: The U.S. government announces an $85 billion emergency loan to rescue AIG, saying a disorderly failure of the company could hurt the already delicate financial markets and the economy.
Sept. 17, 2008: The Dow Jones industrial average lost about 450 points, giving it a shortfall of more than 800 so far for the week. Markets around the world shared in the confidence crisis, and Russia shut down its market for a third day following its worst plunge in share prices since 1998.
Sept. 18, 2008: The U.S. Federal Reserve, working with central banks in Europe, Canada and Asia, pumped as much as $180 billion into money markets to combat a seizing up of lending between banks.
Sept. 19, 2008: Following a series of ad hoc measures, the U.S. government announces a broad rescue plan for the financial system, including a program to buy hundreds of billions of dollars of bad mortgages and other forms of toxic debt that have been weighing down U.S. financial companies. The Fed and Treasury Dept. shore up money market funds, which had also come under siege during the crisis, and the SEC temporarily bans short-selling – a way of betting that a stock will fall – against shares in 799 financial stocks.
Sept. 24, 2008: Warren Buffett’s Berkshire Hathaway Inc. announces plans to invest at least $5 billion in Goldman Sachs, a move seen as a huge vote of confidence for one of the credit crisis survivors.
Sept. 25, 2008: Washington Mutual Inc., one of the nation’s largest banks, collapses under the weight of its enormous bad bets on the mortgage market. The Federal Deposit Insurance Corp. seizes WaMu and then sells the thrift’s banking assets to JPMorgan Chase & Co. for $1.9 billion. With $307 billion in assets, Seattle-based WaMu, which was founded in 1889, is the largest bank in American history to fail.
Meanwhile in Washington D.C., key members of Congress claimed agreement on an outline and crucial details of an urgent multibillion-dollar plan to stave off the crisis, but Republican members of the house balk at the plan and suggest an alternative plan. Presidential candidates Barack Obama and John McCain join negotiations, and late in the day, McCain sides with the House GOP alternative plan.
Sept. 29, 2008: In a surprise break from party leaders, House legislators defeat the $700 billion emergency rescue plan backed by the Senate and the White House for helping the nation’s financial system. In reaction to the move, the Dow Jones industrials plunge nearly 780 points, the most ever point drop for a single day.
Oct. 1, 2008: After senators loaded the economic rescue bill with tax breaks and other sweeteners, the $700 billion financial industry bailout passed on a 74-25 vote and moved on to the House.
Oct. 3, 2008: On a final vote of 263-171, the House of Representatives approved the revised $700 billion government bailout plan and sent it to President Bush for his certain signature.
Meanwhile, Wachovia announced it had agreed to be acquired by San Francisco-based Wells Fargo & Co rather than by Citigroup.
Oct. 6, 2008: In a rare coordinated move, the Federal Reserve and other major central banks from around the world slashed interest rates to prevent a mushrooming financial crisis from becoming a global economic meltdown. The Dow Jones industrials average posts its biggest loss ever during a trading day, closing below 10,000 for the first time since 2004.
Oct. 8, 2008: The Federal Reserve agrees to provide American International Group with a second loan of up to $37.8 billion, coming on top of a $85 billion loan made to the troubled insurance company in September. The move comes as lawmakers investigating the meltdown of AIG questioned the decision by AIG executives to spend $440,000 on a recent company retreat, complete with spa treatments, banquets and golf outings.
Overseas, the British government announced a $87.5 billion plan on Wednesday to partly nationalize major banks, with taxpayers taking stakes in a bid to shore up a financial sector hard hit by the world financial crisis.
Oct. 13, 2008: Wall Street stormed back after its worst week ever and staged the biggest single-day stock rally since the Great Depression, catapulting the Dow Jones industrials to a 936-point gain.
Oct. 14, 2008: The 2008 federal budget deficit soars to $454.8 billion, the highest level in history and more than double the $161.5 billion recorded in 2007.
Oct. 17, 2008: President George W. Bush addresses the country about financial crisis by saying the economy didn’t falter overnight, “and it’s going to take a while for the credit system to thaw.” U.S. and world markets continue to endure a volatile period of record daily gains and daily losses.
Oct 22, 2008: Internet lender E loan shuts down their computers. They were #293 on the implode list.
Oct. 23, 2008: Former Federal Reserve Chairman Alan Greenspan appears before the House Oversight Committee and says the financial meltdown — a “once-in-a-century credit tsunami” — has revealed a flaw in a lifetime of economic thinking, leaving him in a “state of shocked disbelief.”
Reported on this same day, the number of homeowners ensnared in the foreclosure crisis grew by more than 70 percent in the third quarter of this year compared with the same period in 2007, while new claims for jobless benefits increased by more than expected.
Oct. 28, 2008: The Conference Board reports the U.S. consumer confidence index fell to 38, down from a revised 61.4 in September and significantly below analysts’ expectations of 52. That’s the lowest level for the index since the Conference Board began tracking consumer sentiment in 1967, and the third-steepest drop.
October 29, 2008: Prime Rate is reduced to 1.00- it is to be noted that prime rate has only been this low four times in 20 years.
Oct. 30, 2008: The U.S. Commerce Department reports gross domestic product fell at an annual rate of 0.3 percent in the July-September period, a sign the country could be facing a worse recession. The GDP is widely seen as the broadest measure of America’s economic health. Consumer spending, which accounts for two-thirds of the economy, dropped by the largest amount in 28 years in the third quarter.
Oct. 31, 2008: Last day for the retail side of CTX (#298 on the Implode list).
Nov. 6, 2008: California government proposes a 90 day moratorium on foreclosures. Other governors have followed suit.
Nov 3, 2008: Announcement made that one out of five mortgages were currently behind or in foreclosure.
Nov 12, 2008: FHA sets 2009 limits (D/FW stays at $271,050).
Nov. 24, 2008: Latest victim on the mortgage industry- #305 on the Implode List- Fortes Financial.
Nov 25, 2008: FDIC adds 54 more banks to its “problem list”.
Nov 26, 2008: Cost of Bailout hits 8.5 Trillion dollars.
My head is spinning!!