Investor’s can not trust any of the subprime mortgage lending companies, and this was made clear from American Home Mortgage Investment Corp. (AHM). Countrywide Financial Corporation (CFC) will survive according to Jim. He also thinks that Thornburg Mortgage, Inc. (TMA) could survive also as they did a lot of loaning only to the rich. A further exception is Redwoods Trust, Inc. (RWT) because it is under 10%, a stock with a higher than 10% yield is not going to make it. Companies that are at the mercy of the banks are RAIT Financial Trust (RAS) and NovaStar Financial Financial Inc. (NFI) as they did a 4 for 1 reverse split. The futures are out of control for them and they are in the hands of Wells Fargo & Company (WFC) which just discontinued it loaning of subprime. Jim told us that the “Wells Fargo’s of the world have no interest in keeping you alive” as they would “rather just take the loss.” This situation “inspires tremendous panic” but he is not concerned as “the first man out lives and he wants our people to be the first out.”
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