As Irvine Renter as stated before, cabals are unstable. The is a another sign that the banking cabal is showing some trouble. The wrinkle is that pushing bad loans was public policy by both the Bush and Obama administrations.
By Donal Griffin and Laura J. Keller on August 15, 2012
Fannie Mae and Freddie Mac have expanded efforts to get refunds on soured mortgages, boosting the cost of faulty home loans and foreclosures at the biggest U.S. banks since 2007 to at least $84 billion.
Bank of America Corp. (BAC), Wells Fargo & Co. (WFC), JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Ally Financial Inc. (ALLY), set aside almost $3 billion to buy back bad home loans in the first half of 2012, according to data compiled by Bloomberg. Regional lenders including SunTrust Banks Inc. (STI) disclosed at least $1.3 billion of added costs, exceeding their total for all of 2011.
“More and more financial institutions are reporting this and some of those that behaved themselves pretty well during the mortgage cycle are starting to see this happen,” said Blake Howells, an analyst with Becker Capital Management Inc., which oversees about $2.3 billion, including shares in JPMorgan andPNC Financial Services Group Inc. (PNC) “It certainly impairs earnings power.”
Fannie Mae and Freddie Mac (FMCC) are stepping up attempts to hunt down and sell back faulty mortgages bought from lenders during the U.S. housing bubble, according to bankers, investors and analysts. The goal is to whittle down the $190 billion cost of bailouts for the two taxpayer-backed firms. Investors’ concern about the potential damage helped push Bank of America’s stock down 40 percent since the end of 2010 and discouraged some banks from writing new mortgages, regulators have said.
Bank of America, whose Countrywide unit was the biggest mortgage lender before the housing bust, added $677 million to reserves for buying back bad loans in the first half of this year while San Francisco-based Wells Fargo, the current market leader, set aside $1.1 billion. Total mortgage-related costs for the 15 biggest U.S. banks and Ally rose by $7.7 billion to at least $84.2 billion since 2007, the data show.
Bloomberg’s tally was assembled from regulatory filings, company statements and financial presentations from U.S. lenders since the start of 2007. The data cover provisions and expenses tied to repurchases, foreclosure errors and abuses, payments to reimburse investors for lost value on faulty mortgages, legal settlements and litigation expenses.
It also includes some writedowns of assets, such as mortgage servicing rights, when the company specifically attributed the loss in value to problems in mortgage underwriting or foreclosures and the costs of remedies. The totals may increase as more detailed breakdowns become available. Actual losses may be lower if banks recover some of the costs by reselling the loans or seizing the property.
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Proprietary OC Housing News home purchase analysis
$415,000 …….. Asking Price
$350,000 ………. Purchase Price
6/26/2003 ………. Purchase Date
$65,000 ………. Gross Gain (Loss)
($28,000) ………… Commissions and Costs at 8%
$37,000 ………. Net Gain (Loss)
18.6% ………. Gross Percent Change
10.6% ………. Net Percent Change
1.8% ………… Annual Appreciation
Cost of Home Ownership
$415,000 …….. Asking Price
$14,525 ………… 3.5% Down FHA Financing
3.70% …………. Mortgage Interest Rate
30 ……………… Number of Years
$400,475 …….. Mortgage
$105,441 ………. Income Requirement
$1,843 ………… Monthly Mortgage Payment
$360 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$104 ………… Homeowners Insurance at 0.3%
$417 ………… Private Mortgage Insurance
$0 ………… Homeowners Association Fees
$2,724 ………. Monthly Cash Outlays
($279) ………. Tax Savings
($609) ………. Equity Hidden in Payment
$18 ………….. Lost Income to Down Payment
$124 ………….. Maintenance and Replacement Reserves
$1,978 ………. Monthly Cost of Ownership
Cash Acquisition Demands
$5,650 ………… Furnishing and Move In at 1% + $1,500
$5,650 ………… Closing Costs at 1% + $1,500
$4,005 ………… Interest Points
$14,525 ………… Down Payment
$29,830 ………. Total Cash Costs
$30,300 ………. Emergency Cash Reserves
$60,130 ………. Total Savings Needed
The property above is available for sale on the MLS.Contact us for a comparative market analysis, a cost of ownership analysis, or information on how you can make an offer today!
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