John Lounsbury
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Banks Still Have Huge Mortgage Losses to Come [View article]
You are quoting a public relations promotional effort of the Fed. Quantitative Easing and the purchase of $1+ trillion MBS (and the loading of $100's billions of MBS into Fannie and Freddie) had one primary purpose: Bail out the banks.
This is why I briefly mentioned John R. Talbott's trillion dollar fraud at the end of the article.
I should have expanded on that subject a lot more in the article. The political arguments have so polarized the public perception that the real purpose of all this manipulation has been hidden in the background.
Banks Still Have Huge Mortgage Losses to Come [View article]
I believe you are referring to Fed Governor Daniel Tarullo's speech on Friday calling for higher bank reserves for the systemically risky banks. For those who don't know about that it was reported here: econintersect.com/b2ev...
Banks Still Have Huge Mortgage Losses to Come [View article]
You are exactly correct. I was sloppy. The $10 billion is lost income, not lost capital.
Banks Still Have Huge Mortgage Losses to Come [View article]
Excellent summary. I can recommend www.nakedcapitalism.com/ as a primary source of detailed research on the mortgage documentation scandal. We posted an exclusive article written for us by Yves Smith (the author of the NC site) a few months ago: econintersect.com/word....
There is also a good interview video of Yves by Harry Shearer: econintersect.com/word...
Banks Still Have Huge Mortgage Losses to Come [View article]
You may already know the background on HELOCs so I apologize in advance while I explain for the benefit of those who are not so well informed.
Even in non-recourse states the HELOC is a recourse loan and is not discharged when the property is sold unless the sale proceeds are sufficient to cover them after the first mortgage is satisfied. The lender can still make a claim for repayment unless the defaulter files for bankruptcy protection. Thus HELOC's that have no equity coverage in from the property may still have some value as a surviving recourse loan.
There are a variety of companies that deal in residential properties, private mortgage debt, defaulted debt instruments, etc. Here are some:
www.unifund.com/ourser...
www.realtynotebid.com/#
www.preferrednoteinves...
www.sellthemortgage.com/
There is a big business in buying distressed debt. See the following:
seekingalpha.com/artic...
www.marketwatch.com/st...
www.buchalter.com/bt/i...
Do actually you believe that no one is trading HELOC's at deep discounts?
Banks Still Have Huge Mortgage Losses to Come [View article]
"Dan Freed, writing at TheStreet.com, says the top five banks with mortgage loss exposure do not include BAC. Freed's list is headed by WFC, the only one of the top six megabanks to make the list."
Banks Still Have Huge Mortgage Losses to Come [View article]
I agree that 2 year delinquent loans are not accruing interest over that time period. I did not intend to write anything that would infer that.
PS: I can think of an entirely fraudulent scheme whereby a lender could continue to accrue interest by adding the unpaid amounts to the principal. This would simply maintain an accounting for income (not actually received) while increasing the later write downs. I think that such a scheme should be illegal and would not be practiced by any aboveboard enterprise. But...? Perhaps someone else will comment on this.
Banks Still Have Huge Mortgage Losses to Come [View article]
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Here is the comment received privately:
I am the head of default management for a large savings bank. We send out our NOD, also known as NOI (notice of intent to foreclose), at 90 days and I don't know of any bank that waits longer than 120 days to send it out.
The entire foreclosure process leading up to a foreclosure sale can take up to 2 1/2 years, but I can't imagine why any lender would wait over a year and a half to send out the default notice.
I'm curious as to where you got your statistics that NY banks are waiting over 600 days to send out these notices?
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Here is my reply:
The data comes from the article by Keith Jurow: econintersect.com/b2ev... . The article contains a graph from Lender Processing Services that shows the average delinquency to NOD delays by state. The state with the shortest average delay is Wyoming (367 days). It seems that your bank's practice (and all the banks you know that are 120 days or less) are in the faster than average part of the distribution.
The web site for Lender Processing Services is www.lpsvcs.com/Pages/d....
Banks Still Have Huge Mortgage Losses to Come [View article]
Thanks for commenting.
I should add two things:
1. Dick Bove who estimated BAC will ultimately add $32 billion in mortgage losses has said the bank has adequate reserves, assets and earnings for these and he is long BAC.
2. Some additional detail has been added to the GEI News article since this was posted here. See: econintersect.com/b2ev...
Department of Justice Distorts Mortgage Fraud Priorities [View article]
Thanks. I had reported at Seeking Alpha on this program at the time it aired and thought there might be a new program. I will put this up on GEI because I want to keep pushing it forward. I am amazed that the public is so unaware of what went on and what hasn't been done.
Brooksley Born was a member of the FCIC (Phil Angelides, Chair) which issued lame majority and minority reports divided along party lines and sub-divided based on personal bias. GEI has published a number of commentaries on the FCIC reports, most notably by Bill Black and Yves Smith. Both describe the work of the FCIC as criminally negligent.
One Yves Smith article reports on the opinions of an FCIC staff member who said, "I can't believe they suborned Brooksley Born."
Will we ever be able to turn the jello back into American pie?
Department of Justice Distorts Mortgage Fraud Priorities [View article]
Wow!!! Are you ever the optimist. (Sarcasm.)
I must admit that I feel some resonance with what you say, although some of the things you mention I had to learn the hard way.
There is an interview of Brooksley Born on PBS that I've heard about and I want to track it down and post it. I understand it is a condemning indictment of the Clinton bankster Treasury team. Unfortunately we are far from out of the mess they started us into. Okay, there were other mistakes in the two decades before that, so maybe I should say they pushed us over the edge after their predecessors set up the stage.
Anyway, I hope we don't have to go completely down the Andrew Jackson route. People are talking about a showdown when the Fed's 100-year charter comes up for renewal. Well I can't find anything about a date stamp on the charter so I think that is all pleasant gossip.
Peace.
Department of Justice Distorts Mortgage Fraud Priorities [View article]
I think the American psyche has been reduced to jello. I don't know what it will take to firm that up so we can have American pie again.
Department of Justice Distorts Mortgage Fraud Priorities [View article]
He says there is a straight forward way to let market forces sort out the TBTF situation.
Department of Justice Distorts Mortgage Fraud Priorities [View article]
The problem is that the fraud goes right to the core of a financial system which is a Ponzi scheme gone bakers on steroids. To seriously attack all fraud would totally dismantle our economy and that is not going to happen.
What is needed is a systematic evolution to a sound system. Getting to that end is problematic because the miscreants control to process of justice.
Elliott Morrs has an interesting Op Ed that should be posted today which relates to this problem. He has a simple proposal to address one aspect. I'll come back and post a link when Elliott's piece is posted.
Department of Justice Distorts Mortgage Fraud Priorities [View article]
I am posting this to say I think your comment is spot on and I don't understand anybody giving it a negative rating.