South Bay Blogs

Accredited Home Lenders Holding Company is laying off more than half of its employees, close 65 branches, and stops accepting new mortgage applications in its struggle to survive the currently turbulent mortgage market. According to Associated Press, which reported on this story, mortgage lenders have been “stung by decaying credit quality and a newfound fear of risk on Wall Street,” as more than 50 lenders went bankrupt this year alone.

We bought a home in 2005, when the Southern California housing market was still ridiculously hot. Given how risk averse and fiscally conservative we were, we made sure we had a 20% down payment and almost 2 full years of mortgage saved up before purchasing the house we now live in. I was struck by the amount of TV and radio advertising and promotion that mortgage lenders engaged in, and thought some preyed on the ignorance of the consumers that would only come back to bite the lenders. Now it looks like not only are gullible consumers paying for it, the businesses that were only too happy to make a quick buck are paying for it too.

Uh oh… customers who hear rumors of Countrywide Bank becoming unstable are rushing to withdraw their savings, even as Countrywide Bank’s parent company, Countrywide Financial, is rushing to reassure its customers that the bank is safe. The Los Angeles times reported on this on Friday. Countrywide savings customers are afraid that a potential flood of defaults on jumbo loans that Countrywide has been issuing may corrupt the stability of the bank, and affecting their savings. One customer said he didn’t care if the bank was FDIC insured, he wanted to get his half million dollars ($500,000) in savings out and into another bank. Read the rest of this entry →