We’re probably not going to make a lot of friends on the consumer side with this, but more than a few analysts have asked us here at HW when we’re going to take up the issue of “predatory borrowing,” since the cards have pretty much been dealt on predatory servicing and predatory lending.
How about now?
An earlier story Tuesday on HW covered an upcoming Senate Judiciary subcommittee hearing on foreclosures and bankruptcy, and cited a story in the New York Times. It was penned by Gretchen Morgenson, and we chose to ignore the more — ahem, how shall we put it — misguided portions of her story. We wanted to focus on the news itself.
But those misguided portions that we ignored? They drove Calculated Risk’s Tanta off of a ledge, in a way that only Gretchen... more»
MarketWatch covers the trials and trevails of HBOS, the UK’s largest mortgage lender:
HBOS … said Tuesday that it plans to raise 4 billion pounds ($7.95 billion) through the sale of stock to existing shareholders as it battles against rising write-downs and tighter lending margins.
The announcement made HBOS the second major U.K. bank to announce a so-called rights issue in recent days after Royal Bank of Scotland said it needed to raise 12 billion pounds to repair its balance sheet.
HBOS also said Monday it has taken 2.84 billion pounds of write-downs so far this year.
Here at HW, we’ve joked in recent weeks that we should have developed a template to cover mortgage bank’s earnings reports this past season: writedowns totalling x, capital raise equaling y, management... more»
MarketWatch blurbs:
Japanese banks and brokerages are expected to post a combined loss of more than 1 trillion yen ($9.6 billion) in investments tied to the U.S. mortgage market in the recently-ended fiscal year, according to a Japanese media report Tuesday. Japanese banks, which are due to release their fiscal 2007 earnings in the first half of next month, will push the tally for subprime-related losses above the 673 billion yen reported by Japan’s top brokerages so far, according to a Nikkei newspaper report. Brokerages Mizuho Securities Co. and Nomura Holdings Inc. two of Japan’s top five securities firms and the only ones to report subprime losses, wrote down 413 billion yen and 260 billion yen respectively in the soured investments in the fiscal year which ended March 31.
HW... more»
The editors at the Wall Street Journal let their hair down over the weekend and probably had a bit too much absinthe, to boot. That’s the only explanation we can think of to explain the Times New Roman-text lashing thrown in the general direction of Ben Bernanke and the Federal Reserve.
The lede:
So Federal Reserve officials are whispering to reporters that they will consider a “pause” after another interest-rate cut this week. Perhaps we should be more respectful, but this sounds like the alcoholic who tells his wife he’ll quit drinking next weekend, after one more bender. What Chairman Ben Bernanke needs isn’t a gradual withdrawal from easy money but membership in Central Bankers Anonymous.
The editors — and wouldn’t we really love to know precisely... more»
The WaPo ran an interesting column this past week, suggesting that as housing quickly falls out of favor with investors, many are running headlong back into equities. Which may or may not explain some of the irrational movement we’ve seen in major stock indexes to start this year.
From the story:
Investors fall in and out of love with either real estate or stocks depending on the cycle, financial planners say. “The stock market was the place to be in ‘98, ‘99, especially technology stocks,” said Peggy Cabaniss, former chairman of the National Association of Personal Financial Advisors. “Then you see this huge collapse and people say, ‘I am never going to go into stocks again. I am going to go into real estate, where it’s safe.’ ”
Now,... more»
Inman News covers a interesting topic taking up plenty of discussion among the realtor crowd these days: just how to quantify short-sales within a multiple listing service. As the housing mess has rolled on, the NAR has been having quiet discussions with MLS participants about how to set standards on listing a short sale.
The problem, according to the realtors, is that short-sales are too “fluid.” The Inman story takes up the issue, which is set to be discussed at the NAR annual conference in May:
“The (issue) that we’ve really been trying to focus on and pin down for discussion at the May meeting is: How do you define a short sale? Because technically you don’t have a short sale until it comes to closing and there is not enough money to pay off the lender,”... more»
Answer: we have no idea. But we do know that Josh Weintraub — the Bear Stearns expat recently appointed to the board of directors at troubled lender Residential Capital LLC — has one hell of a right hook.
Apparently, at some point in the past, Weintraub got in the ring (for charity, natch) with Shane Kinahan at Goldman Sachs. And Weintraub kicked some serious Goldman tail, to some strong profanity and chants of “Bear Stearns” from the raucous crowd.
Something tells us Goldman’s laughing now. But we digress. This video is priceless - and we thought it was a fitting introduction of ResCap’s newest board member, given that the company he’s now helping direct is in for the fight of its life.
Housing sucks. We get it. But the ongoing correction in the U.S. housing market is doing the one thing that market pundits have suggested for years was needed: making homes more affordable.
Via the WSJ’s James Hagerty on Thursday:
And now for the heartwarming side of the housing bust: It’s helping some people buy homes that they couldn’t afford a couple of years ago.
Michelle Dudley for years commuted 50 miles each way to her job as a civil servant in Anaheim, Calif., because she and her husband, Don, didn’t feel they could afford a home near her office. This week, though, the Dudleys moved into a three-bedroom house in Anaheim that they recently bought for $390,000, down from the original listing price of $445,000 in November. Similar homes in the area were selling... more»
HW’s publisher Paul Jackson penned a viewpoint piece that ran Wednesday, and the message in it was one that we think will become much clearer in the next 12 months — that fraud is a HUGE problem that has yet to be recognized in the current mortgage mess.
Of course, that means much of the media outside of HW hasn’t yet picked up on this. And it certainly means that none of the consumer lobby has any idea what it’s talking about, because it isn’t looking at remittance reports and loan tapes.
But troubled bond insurers are. And it appears that Ambac, of all institutions, is starting to figure it out. Dow Jones reported yesterday that Ambac’s got the due diligence hounds and their associated attorneys picking through the rubble of RMBS that was once deemed an... more»
In an exclusive interview with the Financial Times yesterday, OCC head John Dugan said that the agency sees a wave of bank failures in the not-too-distant future, particularly as the credit and mortgage crunch begins to work its way to regional and community banks most vulnerable to failure.
From the story:
“We’re going to have some more bank failures that will come back more to historical norms and may go above that with time,” he said. “That is a natural consequence of the economy going from historically exceptionally benign credit conditions to something that is more normal to something you would get in a downturn.”
Dugan’s a bright guy, but let’s be honest here: this is an economy that careened from wild exuberance into outright recession in less than... more»
