Real Estate -- How to Invest in Sub-Prime Lenders
Friday Feb 23, 2007
Dear American Capitalist Reader,
What do you call a former sub-prime mortgage lender employee? A waiter.
This is the last time I’m going to bring this up. Sub-prime lenders are continuing to be punished. H&R Block just posted a loss thanks to its sub-prime connections, and it’s very likely that we’ll see plenty more bankruptcy filings from sub-prime companies in the near future.
To date, 23 sub-prime lenders have gone kaput.
How to Invest in Sub-Prime Lenders: Look Out Below…
This month alone Silver State Mortgage shut down its national operations, according to The Mortgage Lender Implode-O-Meter site. That puts about 800 people out of work. Sad but true, “Silver State had been a mainstay on the Inc. 500 list of the nation's fastest-growing private companies for three years, ranking #159 in 2004, #214 in 2005 and #227 in 2006, and was recently rated the nation's fastest growing wholesale lender in the third quarter of 2006 by competing industry source National Mortgage News,” according to the site.
Mortgage Lenders Network shut down after offering below market rates on $600 million in loans, according to Bloomberg.com.
And ResMAE Mortgage just filed for Chapter 11 protection. Better for us, worse for the sub-prime lenders, the chief economist of the Mortgage Bankers Association, according to Bloomberg.com, says that “more than 100 other lenders will go out of business this year. Many will be sub-prime lenders, victims of loans to borderline borrowers last year.”
Sub-prime lenders are over… Short them now while they’re still expensive.
Editor, Death Cross Trader