The Wall Street Journal today notes that while Hillary Clinton has been holding up Countrywide Financial Corp. and CEO Angelo Mozilo as epitomizing misplaced priorities and values of lenders during the housing boom, one of her allies thinks she's wrong on that count.

Former HUD Secretary Henry Cisneros -- Hillary's husband gave him that job, and he's been campaigning for her in Texas -- tells the Journal that "Countrywide is not the Enron that some people have described it as."

Of course, Cisneros would have to say something to that effect, since he made more than $5 million sitting on Countrywide's board of directors before resigning in October, the Journal reports.

Another prominent Democrat, former California Treasurer Kathleen Brown (pictured), resigned from her seat on the Countrywide board last March (see previous post).

Kathleen Brown's brother, Jerry, is California's attorney general. So far, Jerry Brown hasn't made much of a fuss about mortgage lending practices during the boom -- at least not compared to his counterpart in New York, Andrew Cuomo, who's investigating just about everybody who's had anything to do with originating mortgages and packaging them into securities sold to Wall Street investors.

Photo by vecchiosettore1993

Groups tend to gather around common interests. We've always felt at Inman News that we see the best and brightest minds gather with us around a mutual passion for real estate.

It's why in the real world we called our San Francisco and New York events Connect, and it's why with this new site we wanted to encourage even more of those online connections.

Our vision for the new site was to create a virtual "watercooler" where people can still get the daily news, but if they want, they can also comment on and have a conversation around those stories too.

We also wanted to find ways to connect people around common interests (say internet marketing) and encourage a healthy sense of community.

We also realize that there's a serious case of social network fatigue setting into the industry now - so early on we decided against going too far down the social network road. It's also why we tiered many of the features so you can choose to participate only as much as you want.

If you want; to start, create a profile on our new site. Tell people a little about yourself. Show us who you are. Drop a comment or two on a story. Join a group. Share your knowledge in our wiki. Fill out an ad for your services in our marketplace. Have fun dipping your toes in the water.

If you like what you find; then upgrade to become an Inman Member. Become a leader. Start new groups. Have a greater presence on the site. Be recognized for your contributions.

We hope you have fun with the new Community features on the new Inman.com. That's what it's all about. Making productive business connections and having a good time doing it too.

See you there.

Countrywide Financial Corp.'s annual report, released today, provides some interesting stats going back five years. I've put some highlights into a single table. Click "continue reading" for table and discussion.

(click on image for full size)

Looking back in time, what stands out to me is how much last year's Countrywide's loan production resembles 2003. Conventional, conforming loans -- which fell out of favor during the boom -- once again represented the majority of loans. Note the huge drop in total residential loan funding in 2004, and the dramatic increase in the percentage of non-conforming and subprime loans that followed.

While much has been made of the boom in subprime lending, you can see Countrywide actually became much more dependent on conventional, non-conforming (jumbo) loans -- before the collapse of the secondary market for jumbo loans put an end to that last year. Note the massive growth in loans funded through Countrywide Bank, from $8.1 billion in 2005 to $211.9 billion in 2007, when debt markets dried up.

In looking at delinquencies and foreclosures in Countrywide's $1.45 trillion owned servicing portfolio, the more than two-fold growth in the delinquency rate on subprime loans, to 27.29 percent, is startling. But delinquencies on conventional loans also came close to doubling during that time, to 4.19 percent. I guess what's more interesting, or at least less often noted, is that the delinquency rate on prime home equity loans was eight times greater in 2007 than 2003.

And check out the rise in prime equity loans pending foreclosure. OK, 0.12 percent is only 12 out of 1,000 homes, but who goes into foreclosure on a prime home equity loan??? In 2003, only two in 1,000 borrowers were managing that feat, so there's been a six-fold increase there.

Another interesting trend: government loans have consistently had crummy, double digit delinquency rates. But while delinquency rates on all other loans have shot up, government loans have stayed pretty much unchanged. And if subprime and government loans had pretty much the same delinquency rates, at least until 2006, the percentage of government loans pending foreclosure has never been near that of subprime. In fact, the percentage of goverment loans pending foreclosure has hardly changed since 2003 and now compares quite favorably to conventional loans.

OK, so we've taken some shots over the years for our old web site.

And there's no doubt it was time for a makeover.

So, in addition to a new logo and some exciting new benefits for our valued Members, we've gone and given Inman.com a whole new look which we'll be rolling out very soon. (You can can also click on the image for some highlights of the new home page)

But don't worry. We never lost sight of our primary goal in this redesign.

Our hard-hitting, independent real estate news still remains at the heart of our new site.

But along with our must-read daily headlines, we've brought together under one roof some of our popular new media initiatives; InmanTV, the InmanBlog, the InmanWiki as well as a brand new real estate blog network that's going to bring you even more top notch daily business intelligence.

We also realize we're not going to hit a home run coming out of the gates (how's that for a mixed metaphor?). Believe me, this is only version 1.0 and we fully expect to be constantly refining the site based on your feedback. We want to hear what you think. Inman.com is as much yours as it is ours.

Since we started down this path (and it's been nearly a year in the making) we've had an internal mantra that been guiding us. I wanted to share it with you today.

Same great news. Brand new site.

We hope you like it.

Here's a freakish headline that helps explain why regulators have been pushing for a breakup of monoline bond insurers: "Mortgage meltdown costs Orlando airport $12 million."

The Orlando Business Journal reports that downgrades of the airport authority's bond insurer, FGIC, due to losses on mortgage-related investments, has raised interest rates on bonds that are related to an expansion of the airport 20 years ago. Airports in Jacksonville, Denver, Atlanta and Washington D.C. are facing the same issue, the Journal reports.

Why do we care? Because to protect cities and local governments that depend on bond issues from experiencing the same kind of problems, regulators want bond insurers like FGIC to reorganize, separating their staid muni bond business from more risky guarantees of securities like collateralized debt obligations (CDOs) with exposure to mortgages. That could force banks into another round of write downs on such investments, worsening the credit crunch.

Real estate brokerage and franchise company Realogy Corp. is casting a very wide net on the 'Net these days, pumping its property listings out to many online sites. The company last year announced distribution agreements to share online property listings information with Google and Trulia, and more recently announced similar agreements to bring hundreds of thousands of property listings to Cyberhomes.com, Zillow.com, AOL, Homescape and FrontDoor, a real estate search site launched by HGTV operator Scripps Networks Interactive. Realogy brands include Century 21, Coldwell Banker, ERA and Sotheby's International Realty, among others.

The Internet is considered by some to be a great equalizer, with big and small companies competing side by side in cyberspace for the same consumers. And there is a movement to create data standards to assist brokers of all sizes in sending out real estate listings content to multiple sites, with online players such as Trulia, Zillow and Yahoo Real Estate on board with the effort. Some third-party companies are already serving as the go-between to assist brokers in dishing out content to a range of online sites.

But do all small real estate companies have the time and resources to supply updated data feeds to these various online sites -- or is this an easier feat for super-sized national brokerage companies? Are smaller companies at any disadvantage here as the larger companies push their real estate listings content out to any and all takers in massive data feeds?

(photo by wchien)

There's a flood of new information and insight into the credit crunch at your fingertips this week, and most of it is quite troubling. Here's a list of recommended reading for those who prefer to get their information direct from the source:

Leveraged Losses: Lessons from the Mortgage Market Meltdown. Mortgage credit losses will hit $400 billion -- about half of that on the books of  leveraged financial institutions including commercial banks, thrifts, hedge funds, and Fannie Mae and Freddie Mac. That will will lead to a contraction in domestic lending of $1 trillion, and trim economic growth by a staggering 1.3 percent, according to this authoritative paper by experts at Morgan Stanley, Goldman Sachs, the University of Chicago, and Princeton.

If you find the paper a bit of a slog, check out Federal Reserve Governor Frederic S. Mishkin's insightful -- and easy to understand -- critique of the study here.

On a related note, William Poole, president of the Federal Reserve Bank of St. Louis, talks about the possibility that Fannie Mae and Freddie Mac will require a bailout ("I do not have any information on the GSEs that the market does not also have," Poole says. "Nevertheless, in assessing the risk of further credit disruptions this year, I would put the GSEs at the top of my list of sources of potentially serious problems.")

Monetary Policy Report to the Congress. This is the annual report to Congress by the Board of Governors of the Federal Reserve System. Nothing you haven't heard about the housing sector before, but this report will help you step back and look at the big picture. Here are factors the Fed is thinking about when it makes monetary policy decisions -- including employment, inflation, corporate profits, financial markets, and consumer spending [check out the graph on the personal savings rate on page 9 (page 13 in Adobe Acrobat). Good luck coming up with that bigger downpayment, would-be homebuyers. ]

Testimony by Mark Zandi, chief economist for Moody's Economy.com, before the House Financial Services Committee this week. Check out Zandi's analysis of Equifax credit files, which leads him to conclude that first mortgages are defaulting at the rate of 2.2 million a year. Even if loan servicers step up the pace of loan modifications, Zandi projects "well over" 3 million mortgage defaults in 2008 and 2009. Two-thirds of those will end up going all the way through the foreclosure process, Zandi predicts. That's 2 million foreclosure sales, or 1 million a year (considerably more than my back-of-the-envelope estimate the other day of  648,000 which relied in part on an assumption by loan servicers that only one in three foreclosure starts will ultimately complete the process).

This was a two-day hearing. Check out all the testimony from day one here, and Fed chairman Ben Bernanke's testimony on day two here.

OK, so we've taken some shots over the years for our old web site.

And there's no doubt it was time for a makeover.

So, in addition to a new logo and some exciting new benefits for our valued Members, we've gone and given Inman.com a whole new look which we'll be rolling out very soon. (You can can also click on the image for some highlights of the new home page)

But don't worry. We never lost sight of our primary goal in this redesign.

Our hard-hitting, independent real estate news still remains at the heart of our new site.

But along with our must-read daily headlines, we've brought together under one roof some of our popular new media initiatives; InmanTV, the InmanBlog, the InmanWiki as well as a brand new real estate blog network that's going to bring you even more top notch daily business intelligence.

We also realize we're not going to hit a home run coming out of the gates (how's that for a mixed metaphor?). Believe me, this is only version 1.0 and we fully expect to be constantly refining the site based on your feedback. We want to hear what you think. Inman.com is as much yours as it is ours.

Since we started down this path (and it's been nearly a year in the making) we've had an internal mantra that been guiding us. I wanted to share it with you today.

Same great news. Brand new site.

We hope you like it.

The Senate voted this evening NOT to bring the Foreclosure Prevention Act of 2008 to the floor for a vote. This is the bill that includes provisions to allow bankruptcy judges to modify the mortgages of troubled borrowers to help them avoid foreclosure (see previous post).

The 48-46 party line vote was a procedural matter, and we could see the bill come back in another form (it has a lot of other stuff in it, like giving state housing finance authorities the go ahead to issue $10 billion in additional mortgage revenue bonds to refinance subprime loans, that's not controversial).

But no way are Democrats who support cram downs going to get 67 votes to override a presidential veto. If the idea ever sees the light of day, it will be because a President Obama or McCain can live with it.

The Mortgage Bankers Association sent out a bulletin to members hailing the vote as a "major victory."

"Over the last several weeks, MBA has used all tools available to influence today's successful outcome - including the activation of MBA's grassroots network, the Mortgage Action Alliance," the bulletin said. "Our thanks to all MBA members who called or wrote their Senators and expressed in no uncertain terms the industry's opposition."

The Bush administration is staying on message today as it tries to put a lid on suggestions that the government take a more radical (and costly) approach to propping up housing markets. The White House is rejecting such plans as "bail outs" for "lenders and speculators."

Speaking in Chicago, Treasury Secretary Paulson said that "while some in Washington are proposing big interventions, most of the proposals I've seen would do more harm than good. I'm not interested in bailing out investors, lenders and speculators. I'm focused on solutions targeted at struggling homeowners who want to keep their homes."

Paulson seems to be trying to quell speculation that the administration might get behind Sen. Chris Dodd's proposal to create a Federal Homeownership Preservation Corp. to buy up mortgages at a discount from lenders. Bank of America has reportedly expressed support for the idea.

As noted here Tuesday, the Bush administration has vowed to veto Senate legislation that would allow bankruptcy judges to rewrite the terms of troubled borrowers' mortgage loans.

At a press conference today, the President elaborated on an earlier White House policy statement, saying the proposal would "do more to bail out lenders and speculators than to help American families keep their homes" and "prolong the time it takes for the housing market to adjust and recover and it would lead to higher interest rates."

Bush didn't go into details, but the administration also opposes, on pretty much the same grounds, another provision of the bill that would provide $4 billion in state and local assistance for redeveloping abandoned and foreclosed homes, and a proposal to triple funding for the Neighborhood Reinvestment Corp.

Pressed further about the economic slowdown in general, Bush said the tax rebates authorized in the recently approved stimulus package will soon be in the mail: 

"I know there's a lot of -- here in Washington, people are trying to -- stimulus package two and all that stuff. Why don't we let stimulus package one, which seemed like a good idea at the time, have a chance to kick in?"

The administration's game plan for resuscitating the housing and mortgage markets continues to rest on voluntary workouts by loan servicers, and giving the Federal Housing Administration, Fannie Mae and Freddie Mac more leeway to guarantee and buy loans.

Problem is, FHA, Fannie and Freddie don't HAVE much leeway to do more than they're doing now. Congress has yet to pass an FHA modernization bill that would expand risk-based pricing, and Fannie and Freddie are actually shrinking their loan portfolios to meet regulatory capital requirements (which the administration could lift, but may be maintaining as a bargaining chip to get Congress to pass a GSE reform bill).