Posts from ‘March, 2010’

This is about loss control and their solvency not forgiveness of mortgage debt out of the kindness of their corporate hearts. Just like the home buyer tax credits have much more to do with helping the banks to clean up their books.

The ultimate humiliation is the banks and their lobbyists use of taxpayer funds to persuade our elected representatives not to regulate, censure or punish them for their greed and reckless behavior.

They colluded to pay below market interest rates to state and municipal government agencies on their bond offerings, or in plain English ripping off taxpayers in the name of profits, something they excel at.

That said the program is a spectacular failure as it reached only a fraction of the numbers originally projected and of the permanent modifications the redefault rate is running nearly 52%.

Even a minor lowering of expected profit margins would cause the scale of the overvaluation to widen materially suggesting sharply rising risk for equity investors.

Despite the helping families rhetoric, it is not what these mods are about. These are little more than “extend & pretend” measures, designed to put off the day of reckoning. Were the banks required to report their mortgages accurately and/or write them down, they would be revealed as insolvent.

New Home Sales fell for a 4th consecutive month dropping 2.2% in February to a record low of 308,000 units annualized.

Real estate struggles to find traction going into the spring selling season. The February Existing Home Sales report fell for a 3rd consecutive month dropping to 5.02 million units annualized.

The suit alleges amongst other items that the bonds were sold using fraudulent statements at a number of different levels. The only surprise here is how come the credit ratings agencies aren’t included as well.