The chicanery never ends. The latest bit of looting fobbed off as a win for homeowners is a program to shovel money to second mortgage lenders: The Obama administration unveiled a new program to help borrowers with second mortgages stay out of foreclosure, offering cash to servicers, investors and borrowers who modify loan terms. Guess […]
Read more...Submitted by Tyler Durden, publisher of Zero Hedge Zero Hedge regularly gets visits from the SEC and FINRA, and we can only hope they are taking some of the troubling behavior we have identified seriously. Today’s case looks like a clear regulatory violation. A few weeks ago I noticed Merrill Lynch/Bank of America on an […]
Read more...A Bloomberg story gives the not-heartening news that the government-prodded mortgage modifications are producing higher failure rates as the economy decays: Mortgages modified in the third quarter failed at a faster pace than those revised in the first, and the delinquency rate on the least risky loans doubled, signs of deteriorating credit quality, U.S. regulators […]
Read more...When some deemed the Fed’s move today to expand its balance sheet by as much as a trillion dollars plus as “shock and awe”, I recalled that when that term was first used, at the beginning of the US invasion of Iraq. The notion was a display of superior force would lead to quick capitulation. […]
Read more...The Treasury today announced its so-called “Making Homes Affordable Program”. I am clearly an old fart. The fact that the Treasury bothered to have a logo created for the program (do consumers and servicers really need brand imaging when having money shoved at them?) gives me more than a little pause. I will nevertheless try […]
Read more...I’ve been asserting for some time, based on the comments from mortgage counsellors, that mortgage mods that do not substantially reduce principal balances don’t make enough of a difference to the borrower to change outcomes. And with banks and servicers looking at 40%+ losses on many foreclosures, they can reduce principal a lot and still […]
Read more...The Freddie/Fannie conservatorship, which seemed like an epic event at the time, was succeeded by so many crises, Lehman, the September/October meltdowns, AIG, the European bank rescues, that it seems like a distant memory. But the Treasury made a commitment to maintain positive net worth for both the mortgage lenders/guarantors and was remarkably non-specific as […]
Read more...The Milken Institute has released a new report on the housing/credit crisis, which is a preview of a book to be released this spring (hat tip reader Dwight). What I found particularly interesting, given the Institute’s conservative leanings, is that the policy recommendations were on the whole, middle of the road. They acknowledged the need […]
Read more...Reader Doug pointed to a Seattle Post-Intelligencer article, “FBI saw mortgage fraud early,” which was sufficiently misleading to get my juices going. Some key sections: The FBI was aware for years of “pervasive and growing” fraud in the mortgage industry that eventually contributed to America’s financial meltdown, but did not take definitive action to stop […]
Read more...Goldman, in a research note discussed at CNBC, says the total tab for the US bank rescue operation could run as high as $4 trillion: The cost of restoring confidence in U.S. financial firms may reach $4 trillion if President Barack Obama moves ahead with a “bad bank” that buys up souring assets. The figure […]
Read more...Adam Levitin at Credit Slips has a big beef with a lot of the critics of the idea of mortgage cramdowns as an alternative to foreclosure. For the most part, they don’t know what they are talking about. That charge may sound extreme. but Levitin makes a persuasive case. First, the only empirical work done […]
Read more...Just do the math. From the Las Vegas Review-Journal (via Calculated Risk and reader Dwight): David Crowe of the National Association of Home Builders said he was quite negative in his housing and economic outlook last year, but not negative enough…. The S&P/Case-Shiller Home Price Index fell 25.3 percent from March 2006 to October 2008. […]
Read more...The New York Times reports tonight on how banks are clamping down on credit to small homebuilders, with the result that many will go out of business. There were several things I found surprising about the piece: 1. That banks are getting stringent now. The housing market has been on a rapid decline since the […]
Read more...One of the problems with trying to gauge foreclosure activity is that the data is pretty poor. We discussed this problem last year in “Foreclosure Stats: Pick a Number, Any Number“: We’ve noted more than once that quite a few government statistics near and dear to analysts and investors, such as GDP, inflation, and employment […]
Read more...Although Manhattan real estate is an expected casualty of the financial carnage, it nevertheless serves as a useful, albeit lagging indicator of the depth of distress. Even though residential purchases have fallen over the last year, the price impact (so far) has been muted. That is in part due to the fact that 2007 was […]
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