What Subprime Mess?

By Douglas A. McIntyre Published Mar 15, 8:05AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

Sometimes it is quite amazing how fast the tide can turn. Just two days ago everyone was still looking for subprime mortgage and any lender or financial institution that had exposure to those with less than perfect credit. If you saw the recovery in the growth stocks and junkier stocks late yesterday compared to "value and defensive" stocks, it was more than amazing. It is as though the risk parameters instantly went back to risk tolerance instead of risk averse. Keep in mind now that New Century has all but failed and been booted to the Pink Sheets that there will probably be more implosions, as these are rarely isolated to just one of the public companies in the sector.

There is also a mortgage and business lending deal that hit the tape this morning. PHH Corporation (PHH) announced that it is being acquired by GE Capital Solutions a GE unit) in an all cash transaction valued at approximately $1.8 billion. In conjunction with this transaction, GE has entered into an agreement to sell the mortgage operations of PHH Corporation, a prime mortgage originator and servicer, to a private equity affiliate of The Blackstone Group.

This morning after Indymac Bancorp (NDE) basically said all is well and after the street has figured out that not all lenders and not all subprime mortgages are going to implode. Take a look at the pre-market gains in these this morning, and this is after the PPI data as well. These are only some of the stocks in the sector, but these are a cookie cutter of the main names in the group:

INDYMAC BNCP INC (NDE) $30.51 Up $1.57 (5.43%)
ACCREDITED HOME LENDERS (LEND) $7.01 Up $0.97 (16.06%)
NOVASTAR FINANCIAL INC (NFI) $4.31 Up $0.13 (3.11%)
COUNTRYWIDE FINANCIAL (CFC) $35.00 Up $0.61 (1.77%)
THORNBURG MTG INC (TMA) $24.77 Up $0.25 (1.02%)
IMPAC MTG HLDGS INC (IMH) $5.24 Up $0.21 (4.17%)
AMERICAN HOME MTG (AHM) $24.35 Up $0.07 (0.29%)
HOMEBANC CORP (HMB) $2.95 Up $0.25 (9.26%)

Jon C. Ogg
March 15, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.