Banks could face another mortgage crisis, according to Barron's, if they are forced to buy back subprime, Alt-A and options adjusted home mortgage securities they've sold prior to the financial crisis, mostly as mortgage-backed securities. Already some buyers, like Fannie Mae (FNMA) and Freddie Mac (FMCC), have enjoyed some success returning defective mortgages. And this could be just the beginning.

The banks, of course, are fighting vigorously to fend off these demands. As usual, the courts will have to settle the matter. The focus of the debate seems to be founded on the issue of representations and warranties that may or may not have been violated.

There are no surprises among the 11 banks mentioned. It is the conspicuous absence of names you might expect to find that is.

Continue reading Chasing Value: Banks, Barron's and Buffett

Chasing Value: Banks, Barron's and Buffett originally appeared on BloggingStocks on Fri, 26 Nov 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Hopes for Housing -- Squashed

Hopes for Housing -- Squashed originally appeared on BloggingStocks on Thu, 11 Nov 2010 18:30:00 EST. Please see our terms for use of feeds.

Continue reading Mortgage Rates Hit All-Time Low

Mortgage Rates Hit All-Time Low originally appeared on BloggingStocks on Thu, 11 Nov 2010 17:30:00 EST. Please see our terms for use of feeds.

Imagine, if you would, that you lost your home to foreclosure, but you later learned that the entity that seized your property likely had no right to take it. It sounds unbelievable, right? Well, a recently initiated investigation involving GMAC indicates that may be exactly what has happened in tens of thousands of foreclosure cases across the country.

The investigation, undertaken by the Florida Attorney General, is examining three law firms for allegedly providing fraudulent affidavits that identify who holds the original mortgage note in foreclosure cases. According to a report from NPR, this action has caused GMAC to suspend pending eviction and foreclosure activities.

Continue reading GMAC Investigation Signals Possible Next Meltdown

GMAC Investigation Signals Possible Next Meltdown originally appeared on BloggingStocks on Tue, 21 Sep 2010 14:30:00 EST. Please see our terms for use of feeds.

Continue reading How Low Will U.S. Mortgage Rates Go?

How Low Will U.S. Mortgage Rates Go? originally appeared on BloggingStocks on Wed, 25 Aug 2010 16:00:00 EST. Please see our terms for use of feeds.

Continue reading U.S. Home Buying Applications Plunge to a 13-Year Low

U.S. Home Buying Applications Plunge to a 13-Year Low originally appeared on BloggingStocks on Wed, 14 Jul 2010 13:00:00 EST. Please see our terms for use of feeds.

Bank earnings are upon us. Citi (C) reported a $4.4 billion profit, the largest positive number in three years. Last week JPMorgan Chase (JPM) and Bank Of America (BAC) had great numbers to crow about as well. Part of the good news came from lower loan loss reserves as the economy begins to get some traction on the up side. But some of the positive report was a result of bond trading and/or investment banking. And that's a little troubling.

The reason for investor concern is that bond trading and investment banking are not sustainable business models. They are more like geysers: they shoot up beautifully when the timing is right -- but one never knows when that timing is, unless the geyser is Old Faithful, which none of the bond trading or investment banking deals are. Yes, they contribute hugely to the bottom line as bond traders catch a trend in interest rates and make extraordinary gains or develop new products that create new revenues. But just as quickly the bond market can turn (like the stock market), and large gains turn to losses.

Continue reading Comfort Zone Investing: Bank Earnings: Look Beneath the Headlines

Comfort Zone Investing: Bank Earnings: Look Beneath the Headlines originally appeared on BloggingStocks on Sat, 24 Apr 2010 10:30:00 EST. Please see our terms for use of feeds.

Continue reading AIG Derivative Exit Costs $2 Billion

AIG Derivative Exit Costs $2 Billion originally appeared on BloggingStocks on Mon, 12 Apr 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Bank Failures Hit 42, Expected to Exceed 2009's 140

Bank Failures Hit 42, Expected to Exceed 2009's 140 originally appeared on BloggingStocks on Mon, 12 Apr 2010 09:00:00 EST. Please see our terms for use of feeds.

Continue reading Greenspan Says Market Forces, Not Federal Reserve Rates, Created Housing Bubble

Greenspan Says Market Forces, Not Federal Reserve Rates, Created Housing Bubble originally appeared on BloggingStocks on Wed, 07 Apr 2010 17:30:00 EST. Please see our terms for use of feeds.

Continue reading Closing Bell: Profit Taking Meets Colliding Metrics (SQNM, MON, PALM, NEM, AAPL)

Closing Bell: Profit Taking Meets Colliding Metrics (SQNM, MON, PALM, NEM, AAPL) originally appeared on BloggingStocks on Wed, 07 Apr 2010 16:15:00 EST. Please see our terms for use of feeds.

Over the past couple of years, one of the most troubling aspects of the economy has been the ailing housing market, and in particular the large volumes of homes that have fallen victim to the foreclosure crisis. Finally we get some evidence that things may be moving in the right direction again.

While no one will argue that we are out of the woods just yet, it does appear as things are at least starting to recovery slightly.

Continue reading End in Sight for the Foreclosure Crisis?

End in Sight for the Foreclosure Crisis? originally appeared on BloggingStocks on Sat, 20 Feb 2010 12:10:00 EST. Please see our terms for use of feeds.

U.S. foreclosure filings rose 15% in January to over 300,000. This is the eleventh straight month that foreclosures have passed 300,000.

Here is the situation:

• 315,716 properties received a notice of default, one in every 409 households.
• Bank seizures may rise to 3 million this year, according to Realty Trac.

Continue reading Monthly Foreclosures Top 300,000, Again

Monthly Foreclosures Top 300,000, Again originally appeared on BloggingStocks on Fri, 12 Feb 2010 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Housing Market Slides, but Some Silver Lining Visible

Housing Market Slides, but Some Silver Lining Visible originally appeared on BloggingStocks on Wed, 27 Jan 2010 08:00:00 EST. Please see our terms for use of feeds.

Continue reading Fed Profit Tops $50 Billion

Fed Profit Tops $50 Billion originally appeared on BloggingStocks on Wed, 13 Jan 2010 12:00:00 EST. Please see our terms for use of feeds.

Congratulations, you're richer than you were last quarter! Has your standard of living changed much, or are you still playing it safe?

According to the Federal Reserve, our country's net worth rose 5% to $53.4 trillion in the third quarter, the second straight quarterly gain for the American wallet. Nonetheless, the result remains well behind the (revised) pre-recession high-water mark of $64.5 trillion. To reach this level, we'd need to see net worth surge 21%.

Continue reading Are you better off than you were 3 months ago? Fed says yes

Are you better off than you were 3 months ago? Fed says yes originally appeared on BloggingStocks on Fri, 11 Dec 2009 11:00:00 EST. Please see our terms for use of feeds.

Many Americans, after a near decade of unsustainable overconsumption, often fueled by cash-out refis and HELOCs (home equity lines of credit), will spend the next five years (or perhaps longer) repairing their balance sheets.

And the repair of those balance sheets is something that's applauded by the bulk of economists: enticed by, among other factors, low interest rates and, in some cases, by false promises of a 'perpetually-increasing value of their home,' Americans borrowed too much, with predictable results.

Continue reading The chic-ness of excessive debt has faded (finally)

The chic-ness of excessive debt has faded (finally) originally appeared on BloggingStocks on Mon, 30 Nov 2009 18:00:00 EST. Please see our terms for use of feeds.

A decline in revenues is forcing hotels into foreclosure. The aggressive deals being used to lure guests onto a property is helping to bring in some revenue, but it may not be enough. Occupancy is down 10%, which has sent hotel mortgages into delinquency faster than the rest of the commercial real estate industry.

And it could get worse next year. An oversupply of guestrooms could keep room rates low, making 2010 a high-risk year for hotel foreclosures. Demand should gain 1.6%, according to hotel research firm STR Global, but average room rates are likely to fall 3.4%. The result would be the greatest spread between demand and rates in the 20 years STR Global has been collecting data.

Continue reading Hotel mortgage delinquencies up five times

Hotel mortgage delinquencies up five times originally appeared on BloggingStocks on Mon, 30 Nov 2009 09:00:00 EST. Please see our terms for use of feeds.

If mortgage companies start to feel like they're losing elbow room, it's probably because they're starting to get nudged by the Obama administration. The folks in the White House are planning to kick off a campaign to squeeze mortgage companies to lower payments for even more borrowers who are in trouble. The $75 billion program, financed by taxpayers, to keep homeowners from falling into default appears to be in trouble.

Mortgage lenders have increased their efforts to modify borrowers' mortgages, but most of them are still in a trial stage, which will last up to five months. Only a handful have been made permanent, which isn't good enough for Washington. The Treasury Department's assistant secretary for financial institutions, Michael S. Barr, told the New York Times, "The banks are not doing a good enough job," continuing, "Some of the firms ought to be embarrassed, and they will be."

Continue reading White House, lenders, lawyers and borrowers: Nobody can agree on mortgage relief

White House, lenders, lawyers and borrowers: Nobody can agree on mortgage relief originally appeared on BloggingStocks on Sun, 29 Nov 2009 15:10:00 EST. Please see our terms for use of feeds.

The loans that got us into this mess were generally the first to fall. Variable rate mortgages written without documentation for people with sketchy credit histories shocked nobody as their slide became an avalanche. But, the good stuff is starting to follow. An increasing amount of fixed rate mortgages offered to borrowers with solid credit histories are feeling their ways to foreclosure. Blame unemployment for this one. When people can't work, it gets pretty hard to pay the mortgage.

Fixed rate, high quality mortgages had a foreclosure a year ago. Last quarter, it jumped to 33%, according to a Mortgage Bankers Association report. As this happened, the amount of homeowners behind on their payments or in foreclosure just set another record high ... for the ninth month in a row. Subprime mortgages are headed in the other direction. Low quality adjustable rate mortgages are now 16% of new foreclosures -- compared to 35% last year. And, more than 18% of Federal Housing Administration loans are anywhere from one payment behind to in foreclosure, with California, Nevada, Arizona and Florida worst off: together, they accounted for 44% of new foreclosures.

Continue reading Even the good die young? High-quality mortgages approaching foreclosure

Even the good die young? High-quality mortgages approaching foreclosure originally appeared on BloggingStocks on Fri, 20 Nov 2009 14:30:00 EST. Please see our terms for use of feeds.