Freemont Quits Subprime

HA! NOBODY wants to see bad things happen but it is fun when I get a prediction right! Freemont is quitting subprime. I've been saying they were next ever since I predicted MLN to go around Christmas (they closed at New Year, a week later).

Let's see...

Option One will survive with almost no subprime product. They will look suspiciously like Countrywide's lending matrix before long. Speaking of Countrywide, I wonder what they will do with Full Spectrum and their BC reps now that they have all A and Alt-A products which they already have retail and wholesale ops for? I'll bet they close them up.

New Century is tanking rapidly...73% off stock price at opening as I type??? but ain't gone yet. I look for them to go private if the stock hits a low-enough point. Their investors will buy in and save it.

Argent is the big question mark for me. How are they staying up? They've had bad paper for a very, very long time...?

There are a number of other companies that will cease operations. The one that is going to be the shocker to all in my opinion is going to be Decision One. Their pockets are deep, but HSBC is fed up with that market and owns them. I do look for regional banks to go into the BC market with small cap lending on borrowers with high residual income and/or deep reserves in 401k programs even if the scores stink.

The bottom is nearing rapidly. Let's see where the ride ends and the uptick starts!