Video: Chris Whalen – more on MBS FraudGate, Pension Fund suits, Securities Law and the markets need to restructure these TBTF banks

The risks are high, and Mr Market is asleep, methinks that Uncle Sam has given the TBTF the all clear, leaving taxpayers holding the bag, again.

Courtesy of Market-Ticker:

“This is cancer – this isn’t a sudden crisis that is going to erupt out of the ground.”

“We’re going to wait until well-into this, and then we’re going to do the right thing – which is restructuring.”

MBS…. are calling their lawyers.  Trustees may or may not have the note.

“There are a lot of investors out there who don’t know what they own… they may own unsecured loans….. trustees that were supposed to do things under state law (and didn’t)… even Fannie and Freddie have issues with this.”

“…. this is not minutia; this is the letter of the law.

“The dealer has to deliver to the trustee the notes (under NY State Law)”

Advertisements

October 21, 2010. Tags: , , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Taxes, Wall St. Comments off.

Housing Update: 1 in 7 home loans now in default or foreclosure (14.69%), 4.3 million units in shadow inventory and purchase applications plunged 27%, lowest level in 13 yrs, but don’t worry! Tim Geithner says Euro Debt crisis could never happen here…

And the hits just keep on comin’ in housing…

Calculated Risk is covering all the bases:

Details from the MBA conference call on the Q1 delinquency RECORD, highlights include:

  • FHA foreclosure starts up sharply.
  • “Shadow inventory” of 4.3 million loans that need to worked through (90 day delinquent or in foreclosure) – or they will become REOs or distressed sales.
  • Prime fixed rate is now the key problem!
  • “Sand states” will not be as dominant as the problem moves to prime fixed rate.
  • On the horror show that is the purchase application drop (just like Cash for Clunkers, they cannibalized future sales):

    The MBA reports: Mortgage Purchase Applications Plummet While Refinance Applications Increase in Latest MBA Weekly Survey

    …The Refinance Index increased 14.5 percent from the previous week and the seasonally adjusted Purchase Index decreased 27.1 percent from one week earlier. This is the lowest Purchase Index observed in the survey since May of 1997.

    (more…)

    May 19, 2010. Tags: , , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

    HOUSING UPDATE – Financial Services Cmte asking for your experiences with JPMorgan Chase ahead of hearing tomorrow…

    Update: There is another hearing tomorrow, see today’s hearing here:

    April 13th from prepared testimony reads more like a PR show by the banks.
    April 14th will be the regulators the National Law Center and those pro HAMP vs The Bankers Assoc and others

    Both will be broadcast live

    More info:
    Barriers to Principal Reduction
    April 13: House Financial Services Committee

    The Recently Announced Revisions to HAMP
    April 14: House Financial Services Committee

    RE: Congressional Hearing in Washington DC, Tuesday 4/13/10, 10am with the Financial Committee.

    MiM has been covering the many moods of the HAMP program since its inception.

    Okay peeps, if you have a HAMP experience you would like to relate to the House Fin Svcs Cmte ahead of the hearing tomorrow on HAMP and servicers please contact as follows with your experience:

    From loansafe.org Chase HAMP thread:

    Just had a phone call from Brendan Woodbury – who is also handling tomorrow’s House Financial Services Committee hearing

    He said for me to asap FAX over all I have – I asked him if it would be ok to have others do the same – he said by all means.

    brendan.woodbury@mail.house.gov

    FAX ASAP what you have gone through to
    Congressman Barney Frank
    MARK URGENT – PERTAINS TO FINANCIAL MEETING 4/13/10
    FAX to (202) 225-0182

    The head of mortgage lending for JP Morgan Chase David Lowman entered testimony suggesting a Quick turn around and assistance for any homeowner trying to stay in their home.

    More info here including David Lowman’s prepared testimony (click on the link to his name).
    House Financial Services Committee

    Any HAMP applicant, after either introducing you to their friend..RALPH!,  or laughing deliriously in response, will happily hand over evidence of, in most cases, 15+ months of fruitless attempts to work with the servicers on HAMP.

    HAMP is all voluntary. HAMP to date, is extend and pretend to keep homes off the market until the deluded banks think prices will come back. Forecasts suggest 15 YEARS before prices are back in sand states.

    Today the big servicers are opposing the principal writedown approach Treasury is finally coming around to.

    In written testimony prepared for a hearing in Washington Tuesday of the House Financial Services Committee, some of the nation’s top mortgage lenders warned of the risks of relying heavily on forgiving principal as a means of averting foreclosures and argued for concentrating mainly on other methods, such as reducing interest rates….

    These banks forget TARP, its entire purpose as written was to buy bad home loans and relieve the foreclosure crisis that led to the financial collapse. Instead they got a free ride, FED continues to give them free money, they have rates so low savers are punished, they continue to devalue our dollar so we have less purchasing power, and they won’t fix the damn housing issue which is back with a vengeance.

    If they will not work out the loans to resolve the issue, then the House needs to go ahead and do the cram down bill instead, which we have been opposed to until now. The banks need to share the economic pain they brought upon us all.

    If we had LET THEM FAIL, they would’ve done write downs themselves to keep afloat. Our interference with TARP let them avoid the principal writedowns to begin with.

    One more time – FAN FRED FHA back all these loans anyway, the TAXPAYERS are ALREADY on the hook. Not working through mods quickly with writedowns means walkaways continue apace. They are accelerating and the recent FAN home attitudes survey showed fully 15% of those surveyed agreed it was ok to walk away if facing financial difficulty making payments.

    …When asked if financial distress makes stopping payments on an underwater mortgage acceptable, 15 percent of respondents said yes in Fannie Mae’s National Housing Survey, a remarkable level of public acceptance for homeowners who walk away from their mortgages in light of the growing number of defaults in Fannie Mae’s portfolio.

    Both delinquent mortgage borrowers and those current on their mortgage payments are more than twice as likely to have seriously considered stopping their payments if they know someone who has already defaulted, according to the survey released today.

    Underwater borrowers were more than twice as likely to be behind on their mortgage payments and were more than twice as likely to believe stopping payments was acceptable than borrowers who were not underwater. Only 33 percent of respondents cited their moral qualms as a factor motivating them to pay their mortgage…

    Even conservatives are FINALLY accepting HOLC (HomeOwnersLoanCorporation like in Depression)- CATO INSTITUTE!

    …The omission of recourse has been a major flaw of the Obama loan modification plans. If the taxpayer is putting something on the table, then borrowers should be expected to do the same. During the Great Depression, FDR recognized as much.

    The primary New Deal vehicle for addressing foreclosures was the Home Owners Loan Corporation. The HOLC required recourse and practiced it. In fact, approximately a third of HOLC revenues were from deficiency judgments against delinquent borrowers, including wage garnishment. Perhaps there are some parallels to today, as the HOLC found the second most common reason for foreclosure to be “obstinate refusal to pay.”

    FDR recognized that many delinquent borrowers could afford neither their mortgage nor a deficiency judgment; we must recognize the same today. Recourse is not a cure to stop every foreclosure. It is, however, a proven method for reducing some foreclosures…

    and now admit it would have been better in 08. Gee who said that? Hillary that’s wh0.

    …First, we must address the skyrocketing rates of mortgage defaults and foreclosures that have buffeted the economy and ignited the credit crisis. Two million homeowners carry mortgages worth more than their homes. They hold $3 trillion in mortgage debt. Nearly three million adjustable-rate mortgages are scheduled for a rate increase in the next two years. Another wave of foreclosures looms.I’ve proposed a new Home Owners’ Loan Corporation (HOLC), to launch a national effort to help homeowners refinance their mortgages. The original HOLC, launched in 1933, bought mortgages from failed banks and modified the terms so families could make affordable payments while keeping their homes. The original HOLC returned a profit to the Treasury and saved one million homes. We can save roughly three times that many today. We should also put in place a temporary moratorium on foreclosures and freeze rate hikes in adjustable-rate mortgages. We’ve got to stem the tide of failing mortgages and give the markets time to recover.

    (more…)

    April 12, 2010. Tags: , , , , , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Hillary Clinton, Obama Administration, Politics, TARP, Taxes, Unemployment Statistics, Wall St. Comments off.

    More nothing on Housing: Treasury to announce minimal changes to Making Home Affordable program today, Bank of America signs on to second lien HAMP program…

    Nothing on housing in SOTU despite the fact that we are about to fall off a cliff and bring the entire economy down in a double dip with collapsing prices (Obama did note the drop in home values but no plan for FAN FRED the biggest hit to taxpayers past, present and future..) Our previous posts on HAMP, FAN FRED, rising defaults and the 2MP Second Lien program here.

    Sounds like ‘The Plan’ from the Administration is to waive documentation and force the initial group of trial mods to permanent status. Style over substance, again. How that helps address the imminent walkaways on 4 million more foreclosures no one can say….

    ABC:

    The Treasury Department on Thursday plans to unveil changes designed to streamline burdensome paperwork required for its foreclosure relief plan, according to people briefed on the matter.

    The tweaks to the problem-plagued program could help more borrowers complete loan modifications. But they are unlikely to placate critics who have been calling for far more dramatic changes.

    Lenders will now be required to collect two pay stubs at the start of the process, and borrowers will have to give the Internal Revenue Service permission to provide their most recent tax returns at the same time, according to the people who declined to be identified because the details were not yet final….

    OMG!! They are DENSE!! People who haven’t sent in the tax return release form yet likely have lied on their income!!! What are they wasting time on this crxp for when the problem has grown so enormous on shadow inventory and ARMS about to reset just as FED pulls out of QE?!

    Here is one good thing, having receipt of HAMP applications ACKNOWLEDGED. Gee what a novel idea? Gawd this entire thing has been an exercise in delaying inventory build and nothing more…

    …Participating mortgage companies must acknowledge they received a borrower’s application within 10 days and approve or deny the application within 30 days. After that, borrowers will still be required to make three months of trial payments before the modification becomes permanent.

    What about addressing the rising UE and the roll over effect on foreclosures? STILL NOTHING TO ANNOUNCE. STILL.

    ..…Treasury officials are also working on a plan to give unemployed borrowers a break on payments — possibly for six months — but those details were not expected Thursday. A Treasury spokeswoman declined to comment.

    With foreclosures at record-high levels, the Obama administration’s program to attack the crisis has been a disappointment. Only about 66,500 borrowers, or 7 percent of those who signed up, had completed the program as of December…

    …The $75 billion program has been such a dud that some housing advocates say the Obama administration needs to rethink its entire approach.

    There is some movement on a long awaited angle, the Second Lien program (2MP) finally got someone to sign up! Bank of America on board.

    BusinessWeek:

    Bank of America Corp., the largest U.S. bank, agreed to modify some home-equity loans through the government’s Home Affordable Modification Program amid criticism from bond investors and consumer groups over the federal effort to limit foreclosures.Bank of America, which handles 14 million home loans including 3 million second-lien mortgages, is the first mortgage servicer to sign a contract committing it to the program, the Charlotte, North Carolina-based company said today in a statement. Chief Executive Officer Brian Moynihan made a “verbal commitment” to the program during a meeting with Treasury Secretary Timothy F. Geithner earlier this month, the bank said.

    “For many homeowners facing severe financial difficulty, decreasing the payment on the first mortgage without a reduction in the payment on the second lien may not produce an affordable combined mortgage payment,” Barbara Desoer, president of Bank of America Home Loans, said in the statement…

    And they continue to play head games with homeowners on whether or not they wll address the collapse in equity which is causing a negative feedback loop of walkaways. The damage is done, trying to prevent moral hazard of walkaways now is closing the door after the horses, cows, mice everyone has left the barn.

    First they say, no plans for principal reduction, then 7 days later tell BusinessWeek there are plans for principal reduction:

    Despite increasing pressure to take more aggressive steps to keep troubled borrowers in their homes, the Obama administration said Wednesday that it had no immediate plans to alter its foreclosure-prevention program by increasing its reliance on reducing loan balances.

    The administration’s statement came as attorneys general and banking regulators in 14 states warned that policy makers needed to do more to stem the tide of foreclosures.

    The Obama program, announced in February as a cornerstone of the administration’s efforts to stabilize the housing market, has been running into increasing criticism as delinquencies have mounted. The program has focused on reducing loan payments to affordable levels through interest-rate reductions and other changes in loan terms. But state officials and others say it needs to address falling home prices through principal reductions because many homes are now worth less than their mortgages.

    “The failure to reduce principal jeopardizes the sustainability of loan modifications,” Mark Pearce, North Carolina’s deputy banking commissioner, said at a briefing for reporters….

    Then 7 days later they are ‘working on it’, but still nothing but a bunch of noises on the walk aways:

    The Obama administration’s $300 billion Hope for Homeowners program may be retooled to help the growing number of Americans who owe more than their properties are worth as current anti-foreclosure efforts fail to account for these “underwater” borrowers.The changes would be at least the third lease on life for the program, which began in October 2008 during the Bush administration and has so far helped just 96 of the 400,000 homeowners originally targeted.

    The U.S. Federal Housing Administration is considering ways to make the program more effective, Commissioner David Stevens said in an interview. While he wasn’t specific about any changes, he said Hope for Homeowners could be expanded to more directly help borrowers with negative equity….

    (more…)

    January 28, 2010. Tags: , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. 1 comment.

    RealtyTrac: More Foreclosure Trouble Ahead

    Vodpod videos no longer available.

    Courtesy of WSJ:

    The foreclosure crisis is far from over, according to RealtyTrac’s Rick Sharga. The company will release its year-end report on Thursday showing foreclosures rose 20% over the previous year. He talks with Dawn Wotapka about some trouble spots and the outlook for 2010.

    more about “RealtyTrac: More Foreclosure Trouble …“, posted with vodpod

    January 13, 2010. Tags: , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. Comments off.

    NYTimes notices Obama Housing Plan an abject failure, but which way are they spinning for Team O…

    I am so sick of both the banks and the Administration playing HEAD GAMES with homeowners on these modifications, That is what it is. Just tell us what your intentions are and we will make decisions based on that reality. Jeebus it isn’t that hard people. Our many posts on housing, HOLC, HAMP FAN FRED etc here

    Read the outcome for a woman who entered into a trial mod with Chase and did everything right at the end of this post before you judge homeowners too harshly. The vast majority of the loans now in trouble are people who have lost income NOT people who bought a McMansion. Allowing the 5-6 million currently delinquent loans to enter foreclosure in 2010 will mean an EXTENDED recession for the ENTIRE economy.

    So here is the question. Is the NYT spinning for Obama premptively, heh, to show how hopeless, lol, it would be to continue to try and help homeowners? OR are they spinning to show readers why we must embark on principal writedowns since allowing the banks to modify ‘voluntarily’ without them has done absolutely nothing?…You read it and judge for yourself.

    But behind the scenes, Treasury officials appear to have concluded that growing numbers of delinquent borrowers simply lack enough income to afford their homes and must be eased out.

    In late November, with scant public disclosure, the Treasury Department started the Foreclosure Alternatives Program, through which it will encourage arrangements that result in distressed borrowers surrendering their homes. The program will pay incentives to mortgage companies that allow homeowners to sell properties for less than they owe on their mortgages — short sales, in real estate parlance. The government will also pay incentives to mortgage companies that allow delinquent borrowers to hand over their deeds in lieu of foreclosing.

    Ms. Reilly, the Treasury spokeswoman, said the foreclosure alternatives program did not represent a new policy. “We have said from the start that modifications will not be the solution for all homeowners and will not solve the housing crisis alone,” Ms. Reilly said by e-mail. “This has always been a multi-pronged effort.”…

    (The article can be viewed both as portraying the ‘best thing for all’ to be giving up the ghost on Making HomeAffordable, the ghost being the idea they ever intended to give meaningful help to the homeOWNERS in the first place) (and letting approx. 5-6 million homes enter foreclosure in 2010 alone)

    …Critics increasingly argue that the program, Making Home Affordable, has raised false hopes among people who simply cannot afford their homes

    …Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.

    Now it is ‘cleansing’ like a colonic, lol. This must be like FUNemployment!

    “The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis,” said Kevin Katari, managing member of Watershed Asset Management, a San Francisco-based hedge fund. “We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway.”…

    Now the NYT is turning to HEDGE FUND Managers for their views of what is RIGHT for the economy? Big change there. I thought capitalist investors were Teh Evil? Pivot readers! Pivot like the wind!!

    The NYT is talking out of both sides of its mouth in this piece. Since they are never loathe to take a stand (usually against capitalism and investors), it seems they are voting PRESENT.  Hard to carry water for your overlord when he doesn’t know which direction he is going in eh journOlists?

    And/or this piece  could also be used as advance work for actually doing something USEFUL with the unlimited BAILOUT the WH just gave FANNIE/FREDDIE/FHA. Something like, oh I dunno, THE DAMNED HOLC!!!!!!

    Good news for homeowners is that Nancy Pelosi’s favorite economist Mark Zandi, is on board with principal writedowns and after bailing out the banks and playing the class warfare card, this ‘pivot’ to letting the banks foreclose on millions of Americans might be hard to make stick..

    ..Mr. Zandi argues that the administration needs a new initiative that attacks a primary source of foreclosures: the roughly 15 million American homeowners who are underwater, meaning they owe the bank more than their home is worth.

    ..Mr. Zandi proposes that the Treasury Department push banks to write down some loan balances by reimbursing the companies for their losses. He pointedly rejects the notion that government ought to get out of the way and let foreclosures work their way through the market, saying that course risks a surge of foreclosures and declining house prices that could pull the economy back into recession.

    “We want to overwhelm this problem,” he said. “If we do go back into recession, it will be very difficult to get out.”..

    Look I finally agree with Mark Zandi! The double dip we have been forecasting will be positively Japan-like in its duration if Team Obama lets these foreclosures happen, believe it.

    Memo to Timmeh: YOU HAD A YEAR AND YOUR WAY SUCKETH. DO HOLC!

    Continues after the break:

    (more…)

    January 2, 2010. Tags: , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Unemployment Statistics, Wall St. 3 comments.

    Update: Fannie/Freddie warn of more losses; FHA Commissioner on audit results…

    Update: Whoomp there it is, regular Karnak we are. WSJ has it:

    Fannie Mae and Freddie Mac, already reeling in red ink, are warning they could face additional losses from the weakening condition of mortgage-insurance companies.

    Fannie and Freddie together have required capital injections from the Treasury of $112 billion since the government took them over through conservatorship last year. Their need for government support would have been greater without collecting on claims from mortgage-insurance companies. Fannie and Freddie have received payouts of $2.3 billion and $658 million, respectively, from mortgage insurers through September this year.

    But as conditions for mortgage insurers deteriorate, Fannie and Freddie have warned that their claims against the insurers may not be paid in full. Fannie set aside $1 billion in loss reserves to cover the possibility that mortgage-insurance companies won’t be able to pay full claims, the company said in a Securities and Exchange Commission filing.

    Freddie hasn’t set aside reserves but warned in an SEC filing that “several” of its insurers are “at risk of falling out of compliance with regulatory capital requirements, which may result in regulatory actions that could threaten our ability to receive future claims payments, and negatively impact our access to mortgage insurance for high [loan-to-value] loans.”

    Ever since the mortgage crisis erupted two years ago, there have been concerns about the ability of mortgage-insurance companies to pay claims on all policies. In recent weeks, the concerns have taken on added significance as mortgage defaults continue to accelerate far beyond the subprime market into the broader prime market….

    (more…)

    November 12, 2009. Tags: , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Hillary Clinton, Housing, Obama Administration, Politics, Wall St. 5 comments.

    The other shoe drops: Fannie Mae reports MASSIVE 3Q loss of $18.9 Billion and asks govt for another 15B bailout; Fannie Mae rolls out ‘Deed for Lease’ program renting foreclosed homes to owners…

    housesforsale

    Update: The other shoe just dropped. I am guessing FAN didn’t roll out this Deed for Lease program out of the goodness of their hearts, they turned around and announced a MASSIVE 3Q loss and need ANOTHER 15B from Treasury:

    itrader:

    The latest particular does of lunacy and economic calamity coming out of the intellectual midgets at Fannie and the FHA should be sufficient to push the market well into 1,100 territory tomorrow. FNM’s loss for Q3 is $18.9 billion, up from $14.8 billion in Q2, a time when the market was up a good 15%: ever wonder who keeps on subsidizing those gain? That’s right – you. Credit-related expenses increased to $22 billion in Q3 from $18.8 billion in Q2. Oh, and Fannie now wants another $15 billion rescue from the Treasury (which is having some troubles with getting that pesky debt ceiling raised to one googol) so it can continue with its plan of keeping shadow inventory away from the market, rent foreclosed houses to their owners at staggeringly low rates, and continue the pretense that bank’s balance sheets are well capitalized. Seriously, is the twilight zone any more palatable if one just drinks the Kool Aid or takes some crazy pill? We are ready and willing for the plunge.From the just released results by bankrupt Fannie Mae:

    WASHINGTON, DC – Fannie Mae (FNM/NYSE) reported a net loss of $18.9 billion in the third quarter of 2009, compared with a loss of $14.8 billion in the second quarter of 2009. Including $883 million of dividends on our senior preferred stock held by the U.S. Department of Treasury, the net loss attributable to common stockholders was $19.8 billion, or ($3.47) per diluted share, in the third quarter of 2009, compared with a loss of $15.2 billion, or ($2.67) per diluted share, in the second quarter of 2009. Third-quarter results were largely due to $22.0 billion of credit-related expenses, reflecting the continued build of the company’s combined loss reserves and fair value losses associated with the increasing number of loans that were acquired from mortgage-backed securities trusts in order to pursue loan modifications.

    The loss resulted in a net worth deficit of $15.0 billion as of September 30, 2009, taking into account unrealized gains on available-for-sale securities during the third quarter. As a result, on November 4, 2009, the Acting Director of the Federal Housing Finance Agency (FHFA) submitted a request for $15.0 billion from Treasury on the company’s behalf. FHFA has requested that Treasury provide the funds on or prior to December 31, 2009…..

    Update on status of Fannie Mae’s HAMP/Making Home Affordable applications (HousingWire) :

    (…) Fannie said as of the end of Q309, it had 487,000 trial modifications in progress through the Making Home Affordable Modification Plan (HAMP) and it has met the Treasury Department’s goal of 500,000 modifications in process by November 1.

    Total loan workouts for Q309 totaled 49,000, including 28,000 loan modifications, compared with 41,000 workouts, including 17,000 modifications, during Q209.

    “Even though the volume of trial modifications that we have initiated on Fannie Mae loans under the Home Affordable Modification Program has been substantial, a low percentage of our trial modifications had converted into completed loan modifications as of September 30, 2009,” Fannie Mae said. “One reason is that activity under the program has been increasing over time, so that many loans have not had enough time to complete the trial modification period prior to September 30, 2009.”

    Also on Thursday, Fannie announced a new program that will allow new deed-in-lieu program that allows the borrower to sign a lease to rent their home from Fannie Mae in exchange for the voluntary transfer of the property back to the lender….

    (more…)

    November 5, 2009. Tags: , , , , , , , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Obama Administration, Politics, Unemployment Statistics, Wall St. 7 comments.

    Next Page »

    %d bloggers like this: