Problems with documents used to process foreclosures may be serious enough to threaten the health of the U.S.’s financial system, a government panel warned Tuesday.
The Congressional Oversight Panel, formed to watch over the $700 billion federal bank bailout, said in a report that the foreclosure-document problems “may have concealed much deeper problems in the mortgage market that could potentially threaten financial stability.”
The panel’s chairman, however, cautioned that it is difficult to know whether such threats will come to pass. “It could turn out to be nothing, but it could turn out to be a big deal,” former Sen. Ted Kaufman, the panel’s chairman, told reporters.
The panel urged the Treasury Department and bank regulators to conduct new stress tests to see whether banks can handle the risk that investors will force them to take back billions in loans packaged into securities. Some investors are trying to force banks to do so, partly as a result of revelations about flawed documents.
Thursday, November 18, 2010
Foreclosure scandal a threat to U.S. financial system
That's the word from the Congressional Oversight Panel:
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From CNBC...ENJOY!
ReplyDeleteThe U.S. housing market will stagnate next year as a steady stream of foreclosures and nagging joblessness sap the demand needed to mop up an excess of homes on the market, according to a Reuters poll.
While a housing recovery will be sustained, home prices, which have plunged by about a third since their 2006 peak, will barely rise next year. Medians from the poll showed a mere 1.1 percent rise in 2010 and 1.0 percent in 2011.
Congressional Oversight Panel?
ReplyDeleteYou mean the same types of crooks and liars on the 9/11 Panel, Iran Contra Panel, etc etc etc.
They're all on on it...
Heres an amusing "blast from the past". The following comments are made by our host James, just as the housing market was bottoming:
ReplyDelete"I'm sorry, but I pay close attention to housing data. There is no sign of a bottom occurring in 2009 (except in Arizona and Nevada). This is just another example of wishful thinking among people who want there to be a bottom in housing. Financial professionals have been predicting a bottom since 2005, yet they keep being wrong."
http://bubblemeter.blogspot.com/2009/03/bank-of-america-ceo-on-housing.html
No offense, but it looks like you screwed the pooch on that one!
By the way, if you think James' prediction is bad, check out Lance's from 2 years earlier:
ReplyDelete"There's been no bursting bubble, prices in most locales have already bottomed out and are rising again (as evidenced by the latest reports that were posted on this very blog)...January 01, 2007 3:37 PM"
http://bubblemeter.blogspot.com/2007/01/lereah-it-appears-weve-hit-bottom.html
Oh my!!!
"MAY" have concealed . . . . . .
ReplyDeleteas for "it could turn out to be nothing", well, we've all heard that before. in many contexts. rarely is it the truth.
A Redskins Fan said...
ReplyDelete"No offense, but it looks like you screwed the pooch on that one!"
I definitely underestimated the effect of the first-time home buyer tax credit that had become law one month earlier. In my defense, I made my judgment based on home price trends. The first-time home buyer tax credit was too new for its effects to have shown up in the data.
An earlier version of the first-time home buyer tax credit, which was really just a loan that had to be repaid, had no effect on the price trend. In February 2009, however, it really became free money from the government.
Calling tops and bottoms is a sport for the lucky and for fools. Inevitably someone somewhere gets it right.
ReplyDeleteIMHO the best we can do is to recognize bubbles when we come upon them and stay out of their way when they burst.
The Fed was created to end the boom/bust cycle in the economy and well. . .well, events speak for themselves.
A bit of wisdom I learned a while ago that seems to hold up is to be happy catching 60% of a move. Don't fret over tops and bottoms, just ride the trend enough for a decent profit then cash out.
A house is a place to live and really shouldn't be treated as an investment. Sometimes it works as an investment, and sometimes it doesn't. Again IMHO people buy way too much house for their needs or means because it is an 'investment'. And again, events speak for themselves.
jj