mortgage industry
News and info on the mortgage industry, including updates on the mortgage crisis as well as information on how to protect you land and assets.
If There Was Any Doubt GM Will Go Bankrupt, Read This....
I have advocated all along to let the car companies go into bankruptcy. They need to be shocked into reality and something needs to change drastically with their upper management. Even with the billions the feds just gave them, we all know they are going to go bankrupt, we are just arguing about when.
Well, if you disagreed with this, you have to read this posting from "The Big Picture" titled: GMAC: 0% Financing for Sub-Prime Borrowers. I suggest you go to the site but here is the posting in its entirety.****************** Posting is below:
I found this quote from GM Sales & Marketing chief to be astounding:
“’Six hundred twenty is not a subprime score,’ GM’s sales and marketing chief Mark LaNeve told Automotive News. ‘That’s a very creditworthy buyer. Hopefully, we’ll have access to more of the market that is out there.’”
- Automotive News (12/30/08)
Bill Ryan of Portales Partners adds the following:
“We would like to sputter in shock and disbelief. General Motors Acceptance Corp. (GMAC) lost $5B in the 9 months ending September 2008 (on an operating basis). It has $100B in subprime and nonconforming mortgages through its ResCap subsidiary, and the government just lent them $5B at an 8% interest rate.
In addition, General Motors (GM) just announced a 0% financing option to car buyers.
So it turns out that we are now subsidizing a globally uncompetitive carmaker that does not understand what qualifies as a subprime FICO score and is offering 0% loans financed by a government (taxpayer) investment that costs 8%.
We guess they are hoping to make it up on volume.”
Astonishing.
FYI: Subprime is defined as those credit applicants with a FICO score below 660. Hence, GM plans on shoveling its excess inventory out the door — with a 8% hit on the financing — and the taxpayer bailout holding the bag.
A brand new chapter on Moral Hazard has just been written. I expect will will see significant costs for this profligacy down the road.
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The 10 Best and 10 Worst Celebrity Tippers
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Richard Branson is Awesome
If there were a magazine called "Eccentric Billionaire Playboy", Sir Richard Branson would be on every cover.
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Celebs Ring the Bell at the New York Stock Exchange
See stars promote themselves by ringing the NYSE opening bell.
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