The Sale of Golden West Financial.. an omen?
The pioneer of the option adjustable rate mortgage, Golden West Financial and its founders, Herb Sandler and his wife, have cashed in their chips, selling the bank for $25B in mostly stock to Wachovia. The Wall Street Journal this morning discusses possible insights into this sale. Would you bet on a housing boom after one of its main facilitators jumps ship? We're not so sure... Golden West's Loan Originations were down in the latest quarter to $11.6B, down from $13.1B in the fourth quarter. This seams to be a continuing trends as evidenced by Ameriquest's partial implosion. An interesting tidbit from the article:
"A full 29% of people who took out mortgages or refinanced in 2005 have no equity or negative equity in their homes, according to Christopher Cagan of First American Real Estate Solutions, a data provider. That's a shocking figure, compared with 10.6% of people who took out mortgages in 2004."
