Fannie Mae's quarterly loss shrunk to $1.2 billion. But even as signs point the pressures on Fannie may be easing, it still asked the government for an additional $1.5 billion cash infusion. Fannie Mae and Freddie Mac insured nine of ten new loans in the first quarter.

Fannie Mae's story is the story of the housing debacle. Fannie Mae, and its companion Freddie Mac, are used to insure home mortgages backed by the U.S. government. During the heyday of the housing bubble, Fannie and Freddie ended up guaranteeing risky mortgages. When the subprime mortgage crisis hit, Fannie and Freddie came close to collapsing. The federal government took them over under a process called conservatorship.

Continue reading Fannie Mae Posts Smallest Quarterly Loss Since 2007

Fannie Mae Posts Smallest Quarterly Loss Since 2007 originally appeared on BloggingStocks on Fri, 06 Aug 2010 11:00:00 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.

Are things getting better on the mortgage front? From some of the recent data just published the answer is no.

In July, foreclosure filings, defined as a default notice, bank repossession, or auction sale, were up 7%. and 32% over a year earlier. This is according to Realty Trac's U.S. Foreclosure Market Report. One in every 355 homeowners had received a foreclosure filing.

Continue reading Mortgage defaults are now shifting to prime borrowers

Mortgage defaults are now shifting to prime borrowers originally appeared on BloggingStocks on Fri, 04 Sep 2009 14:00:00 EST. Please see our terms for use of feeds.

KeyCorp (NYSE: KEY) stepped into the earnings spotlight this morning, announcing that its second-quarter loss checked in at 69 cents per share (68 cents per share excluding charges). A year ago, the bank lost $2.71 per share in the second quarter. Although the results were better than those from a year ago, they were not better than the consensus estimate, which called for a loss of 41 cents per share.

The company also announced that it was cutting the amount of preferred shares that it plans to exchange by 71%. KeyCorp's CEO (Henry Meyer III) stated that the company's results "reflect the weak economic environment and the steps that it has taken to address issues in credit quality, strengthen capital and control costs." Like many regional banks, KeyCorp suffered thanks to the credit crunch; even though the bank was not a major player in the subprime-mortgage fiasco. The company added that loan-loss provisions were $850 million, which was 31% greater than a year ago.

Continue reading KeyCorp's quarterly loss is more than the Street expected

KeyCorp's quarterly loss is more than the Street expected originally appeared on BloggingStocks on Wed, 22 Jul 2009 13:30:00 EST. Please see our terms for use of feeds.

Even as the government tries to clean up after the housing excesses of the past few years, The Wall Street Journal opines (subscription required) that it's also sowing the seeds of a new housing bust with Federal Housing Administration loans.

FHA loans are federally insured mortgages made available to first-time home buyers. They require down payments as low as 3.5% (but it's really less because closing costs can be rolled in) and a credit score of just 620 -- far below the 700+ required by most private lenders right now.

As the subprime market has completely dried up, marginal home buyers are returning to the FHA, leading to a huge increase in FHA loan volume. Nearly a third of mortgages are FHA loans, up from just 2% in 2006.

Continue reading Are FHA loans the new subprime?

Are FHA loans the new subprime? originally appeared on BloggingStocks on Mon, 04 May 2009 13:00:00 EST. Please see our terms for use of feeds.

Continue reading More dismal news on the foreclosure front

More dismal news on the foreclosure front originally appeared on BloggingStocks on Fri, 06 Mar 2009 08:10:00 EST. Please see our terms for use of feeds.

Continue reading Former Countrywide honchos look to cash in on their mess

Former Countrywide honchos look to cash in on their mess originally appeared on BloggingStocks on Wed, 04 Mar 2009 10:00:00 EST. Please see our terms for use of feeds.

Continue reading Vulture investors enter the mortgage market

Vulture investors enter the mortgage market originally appeared on BloggingStocks on Thu, 26 Feb 2009 15:53:00 EST. Please see our terms for use of feeds.

The epicenter of everything -- the credit crisis, financial crisis, economic crisis and crisis of confidence -- is housing.

Not just bad mortgages, but a continuing fall in housing prices -- already down 20% with another 15%-20% to go.

Yup, it is not close to being over. Home sales continue to fall, inventories are equal to more than a year of sales, and the vast majority of new mortgages being applied for as interest rates fall are for refinancings.

Be sure to read all 7 reasons the stock market isn't going up any time soon.

Michael Shulman is a contributor to OptionsZone.com.

Seven reasons the market is not going up any time soon: #1 The housing crisis isn't over originally appeared on BloggingStocks on Mon, 26 Jan 2009 12:40:00 EST. Please see our terms for use of feeds.

Subprime mortgage defaults peaked and will slowly begin to slide during the next two years.

But don't get excited -- option ARMs and ALT-A mortgages are now beginning to rise at a very rapid rate. According to analysts I follow, notably Ivy Zelman, the next tsunami will be larger than the one we just went through.

And the banks are not currently valuing these mortgages as if they will default at this rate.

Be sure to read all 7 reasons the stock market isn't going up any time soon.

Michael Shulman is a contributor to OptionsZone.com.

Seven reasons the market is not going up any time soon: #2 The next mortgage tsunami originally appeared on BloggingStocks on Mon, 26 Jan 2009 11:33:00 EST. Please see our terms for use of feeds.

This post is part of our feature on Money Winners of 2008. See all 20.

Lots of people thought real estate was overpriced. Many worried that banks were giving out mortgages too cheap. But what did you do about it? (Either to help the situation or to make money.) Jeff Greene, a real estate mogul in California, actually found a way to bet against the subprime mortgage folly. He made $450 million -- at least that was the count earlier this year.

Well, he didn't just think of it on his own. He basically took the idea that his friend, hedge fund manager John Paulson, had. Paulson thought that, as an individual, Greene wouldn't be able to do this complex a transaction. According to the Wall Street Journal he even used special software so investors in a hedge fund Paulson created just to exploit the subprime crisis couldn't pass on his strategy.

How Greene and Paulson made money involves two financial terms you've probably had to learn this year and never want to hear again. Collateralized debt obligations (CDOs) are the way mortgages are packaged and sold to investors in various slices of risk. Credit default swaps are the holders of those investments insured themselves -- by buying what was like unregulated insurance from one another. The credit default swaps are what got so many big companies in trouble -- they had to pay up on investments that went bad. So Paulson shorted CDOs and bought some credit default swaps.

Continue reading Money winners of 2008: Jeff Greene shorted subprime

Money winners of 2008: Jeff Greene shorted subprime originally appeared on BloggingStocks on Mon, 15 Dec 2008 12:42:00 EST. Please see our terms for use of feeds.

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

The year 2008 brought the word "greed" to new levels with major companies going bankrupt thanks to the greed of their top execs, who were more worried about lining their own pockets than about the interests of their customers and shareholders. This greed also helped to fuel the housing bubble that burst and sent home prices falling in what seems like an unending downward spiral. As the financial news continues to worsen, it's hard to pick the biggest money story of the year. We've pulled together our top four picks, and it's up to you to vote on the biggest money story of the year.

Here are our top four picks in alphabetical order:

Collapse of Wall Street
The world hasn't seen so many Wall Street firms go bust since the Great Depression, and we seem to be teetering on the edge of another worldwide depression. Top Wall Street execs pocketed millions, and in some cases, billions of dollars thanks to sales of complex financial instruments that it appears no one truly understood (or if they did understand their toxic natures they perpetrated a huge fraud on the investors who bought them). Now these same executives pocket millions in golden parachutes as they leave the firms they destroyed. And, while they enjoy their millions, investors, customers and employees of these now defunct or badly bruised firms face destroyed careers and/or portfolios.

Continue reading Best & Worst in Money 2008: Money story of the year

Best & Worst in Money 2008: Money story of the year originally appeared on BloggingStocks on Tue, 09 Dec 2008 18:40:00 EST. Please see our terms for use of feeds.

They laughed at Peter Schiff ... but he was right! originally appeared on BloggingStocks on Tue, 09 Dec 2008 13:00:00 EST. Please see our terms for use of feeds.

This post is part of a series featuring bargain stocks that are worth a look now. See more Cheap Stocks.

Of the 15 components on our Cheap Stocks roster, Goldman Sachs Group (NYSE: GS) is the one that my colleague Nick Perry dubbed "a bold choice." With plenty of question marks still surrounding the major financial names, there are undoubtedly those who will go even further and dub this pick "an unwise choice." On the other hand, some will probably just say we're stealing Warren Buffett's idea. With all potential criticisms thusly taken into consideration, let's take a look at what makes Goldman so hard to resist.

First, let's be upfront about the fundamentals. Amid the recent financial crisis, Goldman Sachs is one of the few major names on Wall Street that still has a pulse. Although it's now a bank holding company rather than an investment bank, Goldman stands out by sheer virtue of the fact that it has dodged bankruptcy rumors and has not needed an emergency rescue by one of its peers.

In fact, Goldman Sachs survived because it knew that most of those subprime-derived securities were toxic, and placed bets that the investments would lose value. Regardless, the bank still sold those securities to its clients, so we're not talking about the financial equivalent of Mother Theresa. On the bright side, nor are we discussing the financial equivalent of Nero -- and in today's market, there are plenty of favorable comparisons to be made between GS and its sector peers.

Continue reading Cheap Stocks: Goldman Sachs Group

Cheap Stocks: Goldman Sachs Group originally appeared on BloggingStocks on Mon, 08 Dec 2008 18:10:00 EST. Please see our terms for use of feeds.

This post is part of a series featuring bargain stocks that are worth a look now. See more Cheap Stocks.

If you had to judge solely by its year-to-date price action, you would probably never guess that Hudson City Bancorp (NASDAQ: HCBK) is, well, a bank. The shares are currently holding onto a year-to-date gain, and they're thriving for good reason. Paramus, New Jersey-based HCBK is feeling so flush, it recently rejected the opportunity to rake in some of the government's TARP funds.

In a statement accompanying the news, Chairman, CEO, and President Ronald Hermance Jr. explained how Hudson City has endured the financial crisis: "We have never offered subprime mortgages ... or other risky mortgage products. We do not sell any of our loan production to the secondary market. We keep all of our loans in portfolio. As a result, we have not been seriously affected by conditions in the marketplace."

Honestly, Hudson City Bancorp seems to be operating in its own economy independent from the rest of the U.S. Check out some of the figures the bank holding company reported on October 15 in its second-quarter earnings release: profit jumped 64% to hit a record 25 cents per share, one cent higher than analysts expected; through September 30, year-to-date deposits added $2.14 billion to $17.29 billion, while total year-to-date assets rose by $7.35 billion to $51.77 billion; and HCBK reported that it's actually writing more mortgages now than it was last year.

Continue reading Cheap Stocks: Hudson City Bancorp

Cheap Stocks: Hudson City Bancorp originally appeared on BloggingStocks on Sat, 06 Dec 2008 12:10:00 EST. Please see our terms for use of feeds.

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

Chicken Little's warning came as good news to astronomers hoping for a better view of the sky. In the same way, not all results of the economic morass of 2008 have been disastrous, at least in the short term. Which of these bits of silver lining do you think shone most brightly this year?

Sales, sales, sales

You've no doubt witnessed the deeper discounts available during the 2008 holiday seasons as retailers, spooked by a drop in consumer spending, are trimming prices to the bone, sometimes beyond, just to keep the cash flowing. The car industry in particular has been caught between the hammer of consumer fear and the anvil of tight credit, so if you're in need of a new car, you'll find dealers, stuck with lots full of new models, ready to cut unheard-of deals.

Cheaper homes

As Lita Epstein reported here recently, houses have declined in value for seven straight quarters, which is bad news, as we've learned, for subprime mortgage holders. For those with good credit, or cash, shopping for a new house the market correction has been a godsend. Since the prices have tumbled furthest in some of the most desirable areas of the country, those retirees who don't need to sell their present home to fund a move to the sunny climes of California, Arizona, or Florida will find some great bargains. In Mountain Home, California, for example, an estimated 90% of all mortgages are upside-down, and upside for buyers shopping in a down market.

Continue reading Best & Worst in Money 2008: Best silver lining to the recession

Best & Worst in Money 2008: Best silver lining to the recession originally appeared on BloggingStocks on Fri, 05 Dec 2008 18:20:00 EST. Please see our terms for use of feeds.

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

There have been big hopes for all the nominees in this category at one time or another, but they've also suffered from questionable management moves of various sorts. So what's to root for in any of these companies?

Circuit City was founded in 1949; back then it was known as Wards Company. The big-box format and Circuit City name came as the result of a series of retail experiments, and became official in 1984. The company was listed on the New York Stock Exchange in the same year. In 1991, the company established a bank to operate its private-label credit card, and later offered a co-branded Visa. Big-box used car retailer CarMax (NYSE: KMX) was also owned by Circuit City at one point. In 2005, the company's board rejected a buyout offer; the company was worth a reported $1 billion then. The next year, Philip J. Schoonover became chairman, and ... well, the rest is history. Circuit City is now in Chapter 11.

Citigroup (NYSE: C) was formed in 1998 from one of the largest mergers in history: banking giant Citicorp and financial conglomerate Travelers Group. The company holds over 200 million customer accounts in more than 100 countries, and includes the investment services brands Smith Barney and Primerica. The company owns prominent, renowned buildings in Manhattan and Chicago, and also won naming rights to the new ball park of the New York Mets. But it was the subprime mortgage crisis that was Citigroup's undoing, resulting in the need for the recent federal bailout.

Continue reading Best & Worst in Money 2008: Struggling company we're rooting for most

Best & Worst in Money 2008: Struggling company we're rooting for most originally appeared on BloggingStocks on Fri, 05 Dec 2008 10:40:00 EST. Please see our terms for use of feeds.

Capital One

Continue reading Capital One (COF) to acquire Chevy Chase Bank

Capital One (COF) to acquire Chevy Chase Bank originally appeared on BloggingStocks on Thu, 04 Dec 2008 16:40:00 EST. Please see our terms for use of feeds.

Last week, Bank of Montreal (NYSE: BMO), one of Canada's oldest and largest banks, reported growth in its fiscal fourth-quarter earnings. But it may be the only one that does, as at least two of the Canadian banks scheduled to report fourth-quarter numbers this week have already released preliminary results that warn of lower earnings due to debt write-downs and trading losses.

Analysts surveyed by Thomson Reuters expect Toronto-based Canadian Imperial Bank of Commerce (NYSE: CM) to post earnings 42.6% lower than a year ago, or $1.28 per share. CIBC beat estimates by a penny in the third quarter, but missed by a penny in the period before that. The bank faces a class-action lawsuit related to investments in collateralized debt obligations consisting of U.S. subprime mortgages. Shares have climbed 20.7% from a recent 52-week low of $39.52, but are down 37.8% in the past three months.

Toronto Dominion Bank (NYSE: TD), Bank of Nova Scotia (NYSE: BNS), and Royal Bank of Canada (NYSE: RY) are expected to report more modest earnings declines of $1.01 per share, $0.73 per share, and $0.83 per share, respectively. All three Toronto-based banks topped estimates in the third quarter. Toronto Dominion and RBC have recently announced plans to offer shares in order to raise capital. Toronto Dominion and Scotiabank have been trading near 52-week lows, and their share prices are down around 39% in the past three months. But only Toronto Dominion has a consensus buy recommendation from analysts.

Continue reading The week in preview: Canadian banks, homebuilders, Sears and food producers

The week in preview: Canadian banks, homebuilders, Sears and food producers originally appeared on BloggingStocks on Sun, 30 Nov 2008 12:30:00 EST. Please see our terms for use of feeds.

Continue reading Warren Buffett's picks beat S&P 500's Financial Index in Q3

Warren Buffett's picks beat S&P 500's Financial Index in Q3 originally appeared on BloggingStocks on Wed, 26 Nov 2008 14:50:00 EST. Please see our terms for use of feeds.