As The World Turns

I thought this was must viewing as  60 Minutes took a look at one piece of the foreclosure meltdown. 

The story focuses on a local East Bay company, World Saving. World was a small savings and loan in the San Francisco Bay area when it was purchased in 1963 for $4 million by Herbert and Marion Sandler and it was sold at the top of the market.

Golden West, which operated branches under the name World Savings Bank, was the second largest savings and loan in the United Stateswhen it was acquired by Wachovia. 60 Minutes makes the case that the collapse of Wachovia was in part do to World's lending practices, a loan product called  "Pick-A-Pay." The fall of Wachovia led it to be acquired by Wells Fargo, which in turn caused Wells to apply for TARP funds. A big mess.

Additional Pressure on Mortgage Industry

Saw a 60 Minutes story, Sunday Night, on a looming second mortgage crisis that is being forecast by Whitney Tilson. Tilson believes that we are only half way through this meltdown and even a bigger fall is ready to hit because of  two other kinds of exotic mortgages that became popular during the boom, called "Alt-A" and "option ARM. Not sure how many Alameda Homes were bought with these types of loans but I thought is was a valuable to learn more and share the story. For me it was good learning moment since I was not aware of these additional types of loans. (my favorite quote is the "Ninja Loan")