From the “Where are they now?” department… here’s a tidbit on Robert Van Winkle, better known by his nom de microphone, Vanilla Ice. I erroneously read this headline at first as “Is Vanilla Ice the next Ty Willingham” and thought he had been recruited to coach Notre Dame football, but that’s not the case. He’s getting a show on HGTV, and you can watch him attempt to flip a house:

Slated for Oct. 14, The Vanilla Ice Project follows Van Winkle and a crew of friends and home improvement professionals as they renovate a 7,000-square-foot house in the Versailles community, one that had been “trashed” by its previous owner, he says. “Everything was missing, from the floor to the ceiling. They took everything – the crown molding, the flooring – yes, even the kitchen sink!” he says. “It was depressing to see a fairly new house be ravaged But I love Palm Beach County. This is my area.”

The article goes further into the problems with the home he’s rehabbing. Not only were all the appliances yanked out, but someone DRYWALLED OVER THE HOME THEATER. Quel horreurs! So what other calamaties have befallen his “area” in the PBC?

Of course, this now- sparkling six-bedroom, five-bathroom home isn’t the only one in Versailles with a troubled history. The community, whose huge structures once sold in the multiple millions, was the subject of a very public scandal involving mortgage fraud and rampant flipping to collect money for houses the flippers should never have qualified for in the first place. Versailles needed a hero.

It needed Vanilla Ice.

Yeah, VANILLA ICE SAVES VERSAILLES was nearly the title of this post. But I was kind of afraid the ghost of Louis-Philippe would come kick my ass and/or steal my fainting couch, and I need that fainting couch.

By the way, in Florida, especially in South Florida, you could throw a rock and hit a community where huge structures sold in the multiple millions, were the subject of a very public scandal involving mortgage fraud/rampant flipping/poisoned drywall/multimillion dollar loans to people who worked the night shift at Denny’s/you name it. So if anyone is inspired by this story, come on down.

Also, I do have to say, it’s funny to hear him complaining about a house being trashed, as the only thing I remember him for other than “Ice Ice Baby” is when he trashed an MTV set with a baseball bat:

But, as always, I digress. We wish Mr. Van Winkle the best, though whether or not this will be a profit-making venture for him is questionable:

Once priced at more than $2.5 million, it was bought by Van Winkle for about $400,000 and cost about $300,000 to renovate. Van Winkle’s hoping to get somewhere in the six figures for it, selling it to a nice family that will take care of it and love Versailles as much as he and his family do.

$400K + $300K = $700K, and “somewhere in the six figures” is substantial wiggle room. But hey, they fixed the home theater, so let’s hope he can fetch the upper end of that ballpark figure.

Ally Bank – which I’d much rather have seen incorporated with a cryptic symbol or something, so that I could refer to it just as “The Bank Formerly Known As GMAC”, because that’s what it is – still has a loose affiliation with GM, cutting car loans for the automaker and, shockingly enough, apparently exacting standards, with an iron fist, as to who gets a loan and who doesn’t. It’s almost like someone at Ally actually learned something from the hot mess they had to be bailed out of when they got into subprime mortgage lending, and doesn’t want any more risky lending on their books.

GM hates this, natch:

If your credit isn’t good, General Motors Co. still wants to sell you a car.

The problem is, it can’t. At least not in big numbers. That’s why the automaker wants more control over its lending again.

GM’s top North American executive Mark Reuss, under pressure to quickly sell more cars and boost GM’s value as it gets ready to sell stock to the public, said a shortage of subprime lending is holding back sales in the U.S.

Makes sense. GM wants to move cars, and Ally is like, “screw you guys, if your credit store is below 620 why don’t you go get a used minivan from Family Auto Mart?” Ally’s actually made their auto lending arm super duper lucrative with this new Era of Standards, so really, if it ain’t broke, they are probably thinking, why fix it. Yes, it helps that the government designated them the preferred lender for both GM and Chrysler, seeing as it owns heaping helpings of all three entities, but a decline in defaults always helps with keeping you in the black.

I suppose the government will mediate this debate, as doting parents tend to do. And now, for those lucky enough to not be versed in this particular piece of infomercial glory, here’s a snippet of Family Auto Mart:

I don’t feel like talking about health care reform other than to say that Jim Cramer says this will lead us into double-dip recession and he’s generally a contrarian indicator. So I’ll talk about the Fed and AIG instead. Hey, look, up in the sky! Bad assets! Not the first time something insured by AIG probably catches a downgrade:

March 19 (Bloomberg) — The largest collateralized debt obligations insured by American International Group Inc. and taken over by the Federal Reserve as part of AIG’s bailout may be downgraded by Moody’s Investors Service. The credit-ratings firm put $7.88 billion of slices of the two CDOs, underwritten by Deutsche Bank AG, under review because of downgrades to the underlying commercial-mortgage securities, New York-based Moody’s said today in a statement. The CDOs — MAX CMBS I Ltd. Series 2007-1 and Series 2008-1 — were created in October 2007 and June 2008, respectively, according to data compiled by Bloomberg.

AIG provided protection against defaults to Deutsche Bank on $7.5 billion of the CDOs’ portions with top ratings, among the $62.1 billion of CDOs assumed by a Fed-funded vehicle, according to disclosures from the insurance company. The value of those obligations had declined by $3.5 billion at the time the Fed bought the securities and placed them in Maiden Lane III as part of transactions to unwind AIG positions agreed to in November 2008, a regulatory filing showed. AIG was receiving a “liquidity benefit” from Deutsche Bank’s financing of positions in CDOs in deals including ones called “Project Max,” according to a BlackRock Inc. presentation dated Nov. 5, 2008…

When it comes to CMBS being downgraded, I am tempted to flag it sarcastically as breaking news, because what else is new. However, it’s frustrating because it means the Fed, which lately likes to come out and talk almost with tentative optimism, is holding assets that are still weakening. (And I wish stories like this came with a “liquidity benefit,” preferably in the form of scotch.)

Timmay!

So, Timmay bought a house in Larchmont in 2004 for $1.6 million, and recently hopped on the beltway down to DC. And he took a salary cut, from $380K at the NYFed to 190K at Treasury. So he probably can’t afford that extra house, right? (I mean, if he even could afford it in the first place on that salary?) It’s on the market, but he doesn’t seem too desperate to get rid of it – since he’s actually asking MORE for it than he paid in 2004.

Granted, it’s not as bonehead a move than, say, buying a house in ’07 and asking more than you paid, but still. Above, the Daily Show takes the idea on. Funny video.

Just like Flo Rida remade that “Right Round” song from the 80s (above)… S&P has gone full circle on commercial mortgage-backed debt:

Standard & Poor’s backtracked on ratings cuts issued last week and raised the ranking on commercial mortgage-backed debt from three bonds sold in 2007.

The securities, restored to top-ranked status, had been downgraded as recently as last week, making them ineligible for the Federal Reserve’s Term Asset-Backed Securities Loan Facility to jumpstart lending.

S&P lowered the ratings on a class of a commercial mortgage-backed bond offering from AAA to BBB-, the lowest investment-grade ranking, on July 14. The New York-based rating company reversed the cut today, S&P said in a statement. In a related report, S&P said it adjusted assumptions on the timing of projected losses on the mortgages.

From AAA to BBB- (junk) to AAA again? Wow, quite a trip. One issue making the dizzying roundabout: the A2, A3 and A-AB classes in Goldman Sach’s 2007-GG10 transaction, considered a benchmark for CMBS, back to AAA from BBB-minus. Why do we care? Because this market would die in a fire without the government backstopping it, and they won’t backstop junk (at least not yet, give ‘em time):

Debt rated below AAA isn’t eligible for the Federal Reserve’s TALF. Investors sought $668.9 million in loans from the Fed to purchase so-called legacy commercial mortgage-backed bonds on July 16, the first monthly deadline to finance the purchase of the securities.

LoLo and I discussed the commercial real estate market recently and our conclusion: “Eddie Bauer isn’t being liquidated! Hoorah! Commercial REITs are saved! For the next six months, anyway.”

Interestingly, also,  Bernanke weighed in on commercial RE over the last couple days. He sounded less than enthused:

Federal Reserve Chairman Ben S. Bernanke said a potential wave of defaults in commercial real estate may present a “difficult” challenge for the economy, without committing to additional steps to aid the market.

Bernanke, testifying before the Senate Banking Committee today, urged lenders to modify “problem” mortgages to avert defaults. Christopher Dodd, the Connecticut Democrat who chairs the panel, told Bernanke that “some have suggested” the commercial market “may even dwarf the residential mortgage problems” in the U.S.

Perhaps the same people who called up S&P and asked them to make their valuation model a little bit rosier should call Ben up and ask him not to say stuff like this.