Some state governments have implemented programs to rescue mortgage borrowers in danger of losing their homes. Eight states have committed a total of $900 million to these plans, but a Boston Globe article reports that the uptake has been very low, with only 100 families getting refinancings. If you assume an average mortgage of $300,000, […]
Read more...It looks like I am in the process of being proven wrong, but even if I am wrong, it is because I underestimated the stupidity of policymakers and the short-sightedness of the mortgage industry. In September, Shiela Bair, chairman of the FDIC, had called on mortgage servicers to freeze teaser loans at their introductory rates. […]
Read more...As readers probably know, because Fannie Mae was found to have engaged in “extensive” fraud, its CEO and CFO were fired late in 2005 and the government sponsored agency was put on a short leash by its regulator, the Office of Federal Housing Enterprise Oversight. So it is a bit surprising to learn in a […]
Read more...Nouriel Roubini, in his latest post, announces the “massive forthcoming losses” in commercial real estate. Note that the frothiness of commercial real estate has been reported for some time (Fitch first warned about it in April; Roubini made noise about it in July, when Fitch issued a second warning) but the financial media has chosen […]
Read more...A reader pointed to a link that shows that an Ohio judge rejected the foreclosure on 14 properties by Deutsche Bank because they failed to establish that they had the right to foreclose. Before readers get too excited, remember this is only 14 mortgages and this sets a precedent only for Ohio (foreclosure is a […]
Read more...This quote, from Countrywide’s CEO Angelo Mozilo, has the potential to be one of those career-death-wish utterances, in the same league as Citigroup ex-CEO Chuck Prince’s “We’re still dancing,” when asked in July if he saw any cause for pause in the recent wobbles in the credit markets. The worst is that Mozilo’s proclamation isn’t […]
Read more...By coincidence of timing, two economists, Nouriel Roubini and Willem Buiter, who have sharply contrasting temperaments, writing styles, and analytical approaches, came out with posts that both argued that US growth prospects look weaker than mainstream forecasts suggest. Readers who follow economics blogs doubtless know full well that NYU economics professor Roubini is a very […]
Read more...The equity markets seem to have finally realized that conditions are ugly in the credit markets, due to get uglier, and the mess will pull down the real economy. And the bad news continues. The dollar index fell to a new low. Wachovia said the value of its subprime securities, largely “super senior” tranches of […]
Read more...We have criticized many of the well-meaning but misguided proposals to try to force mortgage servicers to do more workouts. Even though economically it should be a superior strategy for investors, in many cases the servicer faces restrictions (or at least serious ambiguities) in their ability to do “mods.” But now that the situation in […]
Read more...Normally, I have a pretty good feeling for the dynamics behind turf wars, but on this one, I freely admit to sticking my neck out, and welcome any reader insight. As you probably know, the New York Attorney General Andrew Cuomo filed a suit against title insurer and appraiser eAppraiseIT, a unit of First American. […]
Read more...Readers probably know that the changes in the bankruptcy law, which went into effect in October 2005, were a victory for the credit card industry, which had lobbied for tougher rules for years. I had very little sympathy for the banks, since credit cards were an extremely profitable business even under the old law, and […]
Read more...A story in the New York Times, “Homeowners Feeling the Pinch of Lost Equity,” reports that consumers are having to rein in spending now that they can no longer use their home as a piggy bank. Why is this story noteworthy? Yours truly, along with others whose feet are in the real world, like Joseph […]
Read more...In case you were wondering why mortgage borrowers were having solvency problems…
Read more...Breaking news over a weekend is rare indeed, so the financial press is having great fun with the demise of now former Citigroup CEO Charles Prince, speculating over his likely replacement and possible futures for the financial giant. Some are calling for a break-up, and news stories suggest that interim chairman Robert Rubin has long […]
Read more...The question posed in the headline isn’t exactly the one Gillian Tett and Paul Davies address in a long and worthwhile analysis at the Financial Times, “What’s the damage? Why banks are only starting to uncover their subprime losses.” But that’s because, as the piece make clear, we are only at the end of the […]
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