An especially gloomy report by the U.S. Conference of Mayors says that property values across the U.S. could decline by $1.2 trillion next year, slashing tax revenue by $6.6 billion.
subprime meltdown
Mortgage Related Losses Could Reach $300 Billion
By 11.23.07
The Organization for Economic Cooperation and Development is predicting that mortgage-related write-offs could reach $300 billion, says the New York Times. Although major U.S. financial institutions have placed their estimates at around $50 billion, the OECD says that “a rougher period may yet await financial markets.”
Deal Will Let Some Borrowers Keep Current Interest Rates
By 11.21.07
Countrywide, G.M.A.C., Litton and HomeEq have agreed to let many potentially distressed borrowers in California keep the initial low rates of their ARM home loans, says the New York Times. California is the epicenter of the subprime meltdown, with foreclosure rates that are always near the top of the list (along with Ohio, Michigan, Nevada and Florida).
Say Goodbye To Mark Ernst, CEO Of H&R Block
By 11.20.07
H&R Block Inc., our nation’s largest tax preparer, is now missing CEO Mark “Anybody Wanna Buy A Subprime Lender?” Ernst, after losing $1 billion in the subprime meltdown.
Freddie Mac Loses $2 Billion, Needs Cash
By 11.20.07
Government-sponsored mortgage lender Freddie Mac, the second largest U.S. mortgage company, posted a $2 billion loss for the third quarter and warned that it may not have enough cash to cover its mortgage commitments.
Subprime Meltdown Continues: Citigroup To Take $15 Billion Hit?
By 11.19.07
Goldman Sachs has downgraded Citigroup, the nation’s largest bank, estimating that it will have to take a $15 billion hit due to its exposure to the subprime meltdown. Two weeks ago, Citigroup estimated that its mortgage related write-downs would total from $8-$11 billion as its CEO, Charles Prince “resigned.”
By 11.19.07
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Auto industry investors are warning that automotive sales could hit a 15-year low in 2008, but that auto makers will probably cut production before they offer steep discounts. [Reuters]
House Tackles Subprime Meltdown, Amends Truth In Lending Act
By 11.17.07
The House this week voted 291-127 to pass the Mortgage Reform and Anti-Predatory Lending Act, Congress’ first major attempt to prevent a recurrence of the ongoing subprime meltdown. The bill, supported by every Democrat and 64 Republicans, stabs at the heart of the meltdown by:
- Establishing a national licensing and registration system for mortgage lenders;
- Establishing the Office of Housing Counseling within HUD to help borrowers avoid foreclosure;
- Banning loans that a borrower cannot reasonably repay;
- Banning lenders from steering borrowers towards loans with predatory characteristics;
- Making banks that securitize mortgages liable for violating lending laws.
New Ruling Means Banks Could Have Tough Time Foreclosing
By 11.15.07
There’s big ramifications to a federal court’s dismissal of 14 foreclosure cases because the bank couldn’t prove that they owned the mortgage note, reports NYT.
By 11.14.07
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The subprime meltdown isn’t slowing down, says CNNMoney. The usual suspects Florida, California and Ohio continue to supply us with a tsunami of foreclosure filings in this month’s report. [CNNMoney]
HSBC Says Subprime Meltdown Spreading Into Credit Cards, Other Loans
By 11.14.07
HSBC warned today that the subprime meltdown is spreading into credit cards and other types of consumer loans, says the NYT. The bank announced that it will be taking a larger write down than it forecast, due to the spreading delinquencies.
"We've Built This Latest Economic Boom On Borrowed Money"
By 11.14.07
Elizabeth Warren of Harvard Law, our very favorite consumer debt expert, gave an interview to Marketplace this morning in which she talked about the rising cost of so-called “fixed expenses” and their affect on the American consumer.
Harvard Professor Elizabeth Warren has spent a career looking at personal debt. I asked her if consumers can sustain the engine of our economy much longer.
Update: Dubious Fees For Homeowners Facing Foreclosure
By 11.12.07
Last week we talked about a NYT article about a bankruptcy professor who has been looking at fees loan services are charging and how she found many of them to be dubious and/or inexplicable. For example, by looking at all the defaulted loans being paid off under chapter 13 bankruptcy, she found millions of dollars of difference between what the debtor thought they owed and what the loan service said was owed. Some of that was due to the insertion of questionable fees, like “fax fees” and “demand fees.” There was a front-page NYT article on it, and now you can download the paper that started it all, Misbehavior and Mistake in Bankruptcy Mortgage Claims (PDF).
E*Trade: We're Not Going To Go Bankrupt, Honest
By 11.12.07
Analysts have downgraded E*Trade after the online broker announced further mortgage-related losses. E*Trade has responded with a message to their customers claiming that they could absorb a loss of $1 billion and still remain “well capitalized.” Translated, the message reads, “Please, please don’t pull your deposits!”
By 11.12.07
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Call it the “golden boot:” Citigroup’s deposed CEO to get $12.5 million cash bonus. [NYT]
Consumer Confidence At 2 Year Low, Again
By 11.9.07
Another consumer confidence index has plummeted to its lowest post-Katrina level, and retailers are crying in dark corners of their bedrooms, waiting for the inevitable disastrous holiday season.
Cuomo Subpoenas Fannie Mae, Freddie Mac In Home Appraisal Inflation Investigation
By 11.8.07
New York Attorney General, Andrew Cuomo has subpoenaed the nation’s two largest financiers of home mortgages, Fannie Mae and Freddie Mac in his investigation into the “systemic fraud” that has infected the business of real estate appraisals.
