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Julie Cresweill in Dealbook has a report on the sales of troubled assets. It is the biggest rummage sale in Wall Street history — what one investment company calls “the Great Liquidation.” Two years after Washington rescued Wall Street, hundreds of billions of dollars of bad investments — in many cases, the same ones that poisoned banks and then the economy — are . . . → Read More: The Great Liquidation begins: some will profit nicely and it won’t be you I have read it through and found lots more interesting stuff from House testimony by Adam J. Levitin Associate Professor of Law Georgetown University Law Center. I have excerpted some of what I think are the best bits here: . . . → Read More: Foreclosure-gate: Servicers dupe investors, defraud homeowners So what I postulated in an earlier post, that the banks have positive incentives to foreclose and not to modify loans has now been said in House testimony by Adam J. Levitin Associate Professor of Law Georgetown University Law Center (thanks to James Kwak Baseline Scenario for alerting us to this): The servicing problems stem from servicers’ failed business model. Servicers are primarily . . . → Read More: House Committee hearings on foreclosure-gate Clear and uncontested property rights are the foundation of the housing market. If these rights fall into question, that foundation could collapse…the housing market could experience even greater disruptions than have already occurred, resulting in significant harm to major financial institutions…. a Wall Street bank [could] discover that, due to shoddily executed paperwork, it still owns millions of defaulted mortgages that it thought it sold off years ago, it could face billions of dollars in unexpected losses. . . . → Read More: Congressional Oversight Panel sounds alarm on Forclosure-gate Earlier I had written on the fact that banks may be foreclosing in a manner which will cause problems down the road. Today Reuters published an overview of the suits that banks are starting to disclose. The suits are coming from two directions: Firstly obviously from homeowners… And, secondly from the buyers of Mortgage Backed Securities (MBS), often big brokerages or banks themselves. . . . → Read More: Foreclosure gate: here come the class-action suits This is a great video by Christopher Whalen on Bloomberg. He is saying some of the things which are going to be working out over the next few years in the slow motion of foreclosures. The knock on effects will work out as a long downward pressure on asset classes, not a single Lehman like event: You guys in in the media have a very tough time. You’re looking for events. You’re trying to cover the news minute by minute. This is cancer. . . . → Read More: Foreclosure-gate is a ‘cancer’ Hard-pressed homeowners are asking why lenders often balk at short sales, which allow owners to sell deeply devalued homes for less than what remains on their mortgage. But servicers can reap high fees from foreclosures. And lenders may collect on private mortgage insurance in a foreclosure. . . . → Read More: Are banks declining loan mods and short sales because they make more fees on foreclosures? It seems to me that foreclosure-gate as the foreclosure mess is being called has the hallmarks of a classic, large scale, operational risk failure. . . . → Read More: Op Risk: Foreclosure-gate firing on all four cylinders |
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