Amherst Securities, whose mortgage research is well respected, published a new article on Monday which gives a sobering reading of the prospects for the housing market. It gives a detailed analysis of default rates among performing and non-performing mortgages, and concludes that the outlook is far worse than most investors assume.
Read more...We just e-mailed the following message, along with a spreadsheet of signatures and messages, to Timothy Geithner, Ben Bernanke, Mary Shapiro, Sheila Bair, Ed DeMarco, and John Walsh. Thanks for your interest and involvement in curbing bad practices in the mortgage arena.
Read more...One of the most frustrating parts of the financial reform game is how powerless most of us really are, most of the time. Take this story:
Read more...Top policymakers at the Federal Reserve are fighting efforts to rein in widely reported bank abuses, sparking an inter-agency feud with the FDIC and the Treasury Department. The Fed, along with the more bank-friendly Office of the Comptroller of the Currency, is resisting moves to craft rules cracking down on banks that charge illegal fees and carry out improper foreclosures.
Aargh, can someone please acquaint economists with the economics of banking? Consider the embarrassing premise of a piece by Floyd Norris of the New York Times:
Read more...If big banks start failing again, what will replace them?
Perry Mehrling is a professor of economics at Barnard College
The Financial Times devoted an entire article this week to the fact that foreign banks borrowed more than half the funds deployed under the Federal Reserve’s first emergency program, the Term Auction Facility.
Why is this a surprise?
Read more...This post first appeared on July 13, 2008
For those looking for some concrete action (which was what many market participants hoped for), Paulson issued a statement that amounts to hand waving.
Read more...By Richard Smith Dublin, by way of the proudly-named International Financial Services Centre, a sparkling new development in the old docks, is “home to more than half of the world’s top 50 financial institutions”. But as the Irish financial crisis wears on, this glitter invites unpleasing comparisons: it simply looks meretricious. What Dublin and, let’s […]
Read more...By Richard Smith These are things I’m keeping an eye on, or trying to find out more about. That isn’t a prediction that any of them will blow up, nor that nothing else will, just a round-up of the bees in my bonnet. If you’ve been following Naked Capitalism you are up to speed on […]
Read more...This post first appeared on June 19, 2008
Let’s start with some admissions: Gretchen Morgenson, one of two authors (the other is Vikas Bajaj) of a takedown piece on MBIA yesterday, has some detractors in the blogsphere because, frankly, her understanding of credit instruments leaves something to be desired. Her critics overlook her solid work on executive comp and corporate malfeasance. When she has access to court documents and SEC filings. she is specific and accurate.
Based on watching months of the slugfest between MBIA and Bill Ackman, where MBIA would make vitriolic charges against Ackman which (aside from the obvious fact that he was short) often deliberately misconsrued what he had written (written, mind you, so it was possible to track things back), I’d take Morgenson over MBIA in general, and in particular, since the first two items (the most important ones by far) in its salvo against the piece are a bald-faced lie followed by an attempt at obfuscation that actually confirms the NYT’s position.
Read more...This interview was taped earlier in the month and I didn’t know it had been edited and released until I saw it on Angry Bear!
A serious topic, but I nevertheless hope you enjoy the discussion.
Read more...We’ve mentioned that the FDIC has been pushing to reform the securitization process, including imposing standards on servicers. That has put it at odds with the bank-friendly Treasury and Office of the Comptroller of the Currency (the SEC has proposed securtization reforms but of a much more modest nature than the FDIC’s). This behind the scenes battle is heating up further because Dodd Frank calls on bank regulators to draft new rules to improve the operation of the mortgage securitization market. The FDIC intends to include mortgage servicer behavior in those provisions and want the rules ready in January.
Read more...To further the effort to curb servicer abuses, please visit the website, StopServicerScams, and sign the petition.
Read more...The party line is everything is fine in bank land….even Eurobank land. But some recent developments suggest otherwise.
The business news on Europe has pretty much daily updates on the unfolding and linked sovereign debt/ bank solvency crisis. The officialdom insists this looming problem can be resolved but most observers think it can’t be in the absence of a fiscal union, which is a political bridge too far right now.
In a not-widely-noticed replay of pre-crisis conditions, the cost of swapping euros into dollars to the same high level observed last May, when sovereign crisis fears were at a peak.
Read more...Today, a letter urging fundamental changes in the mortgage securitization markets, signed by 50 individuals with expertise in this arena, was sent to the Chairmen of the FDIC, the Fed, and the SEC, and the Secretary of the Treasury and the Comptroller of the Currency.
Despite widespread evidence of failings, abuses, and outright fraud in the securitization process, reform measures have been halting at best.
Read more...We had questioned the cheery assumption of the major banks regarding their robo signing abuses, namely, that they could simply resubmit their improper court documents and proceed as if nothing had happened.
Improper affidavits are a fraud on the court, and robo signing is the mass, deliberate production of fraudulent submissions. Some jurisdictions, like New York and Florida, are requiring that attorneys certify the accuracy of documents presented in foreclosure. New Jersey is going one step further by having a Supreme Court justice demand an appearance by six major servicers to explain why their foreclosure operations should not be suspended. I suspect the sort of sanctimonious explanations we’ve seen in Congressional hearings, “We act to correct mistakes as soon as they come to our attention,” would not go over well.
Read more...