Foreclosures: Next shoe to drop for banks?
Bank stocks have been shellacked lately as investors worry about what impact the foreclosure scandal will have on the results for the nation's largest financial institutions. Still, some fund managers think the market is overreacting and that the allegations of improper documentation for foreclosures and the resulting delay in some proceedings is not setting the stage for the next Bear Stearns or Lehman Brothers -- i.e. another major banking crisis. "There have been a lot of shoes to drop for bank stocks in the past few years. We've had enough shoes to take care of a centipede to say the least," said Frank Barkocy, director of research with Mendon Capital Advisors, a money manager that focuses on the financial sector. "But I think the worries about foreclosures may be overdone."