Enough with the tapering talk already. Considering the state of the economy, it's going to be a long time before it happens.
Bank of America CFO Bruce Thompson faced questions from investors this week over a recent ruling that some believe may persuade a judge to reject an $8.5 billion settlement the bank reached with 22 institutional investors over mortgage backed securities liability.
The U.S. housing market relies almost entirely on government support, but distant glimmers of a private-sector alternative are growing brighter.
You may not realize it, but if you have received a home loan since late 2008, it is very likely that the only reason you were able to do so is because the government was prepared to guarantee it via Fannie Mae, Freddie Mac, Ginnie Mae or insurance from the Federal Housing Authority.
Despite a recovery in housing, there's still a call for more policy action to stimulate the market. But, according to Michelle Meyer, an economist at Bank of America Merrill Lynch, there could be more talk than action in Washington this year.
Bank of America may or may not have set aside enough capital to resolve issues associated with loans its Countrywide Financial unit made during the subprime mortgage boom. But it--like other big lenders--will remain a giant interest rate casino. Bank of America CEO Brian Moynihan underscored that point during an interview with CNBC Tuesday.Click to continue
... I am not being facetious here. Think of this mortgage industry. Wells has a $1.8 trillion portfolio. It handles 26% of originations. It has had a remarkable decline in the total delinquency and foreclosure rate for residential mortgages in the last year, from 8.96% to 7.63%. That's a staggering level of improvement, especially when you consider the portfolio of terrible mortgages it got from its Wachovia acquisition, including a horrid top-of-the-market basket of mortgages from Wachovia's 2006 purchase of Golden West. ...
... According the filings, the applicaton was for a "stated income loan," which didn't require the "adult entertainer" to document her earnings, but left the underwriters free to put on their thinking caps and voice any concerns.
The filings, which are located on MBIA's Web site, say that then appraised of suspicions over the amount of the applicant's stated income, a Credit Suisse employee said in an email "entertainers typically operate in cash. Its high end club in charlotte. Not the pink pony in backwoods area. Its Upscale. Ask mahar hahaha" ...Click to continue
...Potentially hundreds of billions worth of mortgage bonds packaged and sold by Bank of America and other institutions are expected to face challenges from large investors sitting on losses related to the bonds. The investors, which include Fannie Mae, Freddie Mac, BlackRock, Pacific Investment Management Co. , monoline and private insurers, among others, are trying to put back the mortgages to the banks, arguing they are invalid due to documentation or other technical issues.Click to continue
BlackRock sees an opportunity to connect supply and demand in the mortgage market with a new funding mechanism...Click to continue
..."It sounds as though you're saying from a securitizer of mortgage [collateralized debt obligations] where you weren't the underlying asset originator, there's not a whole lot of risk of things coming back to you. Am I putting words into your mouth?" asked Sandler O'Neill analyst Jeff Harte.Click to continue