Remember that big, ballyhooed mortgage settlement of early last year? The one where homeowners got $25 billion of relief (well actually only around $5 billion in cold cash, but why bother with pesky details?) The one made possible by Eric Schneiderman abandoning his fellow state attorneys general to grasp the brass ring of a do-just-about-nothing Residential Mortgage-Backed Task Force?
To the DOJ, a $13 billion receipt is the "largest ever settlement with a single entity." To #AskJPM, a $13 billion outlay is a 100%+ IRR. And perhaps more relevant, let's recall that JPM holds $550 billion in Fed excess reserves, on which it is paid 0.25% interest, or $1.4 billion annually. In other words, out of the Fed's pocket, through JPM, and back into the government. Luckily, this is not considered outright government financing.
(Reuters) - U.S. borrowers are increasingly missing payments on home equity lines of credit they took out during the housing bubble, a trend that could deal another blow to the country's biggest banks.
People (including some MSNBC viewers) don't tend to believe this: five years after the financial crisis, it is still possible to get a government-insured mortgage with just 3.5% equity down. No really. You can.
The Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FMCC) were the worst-hit publicly traded companies during the mortgage crisis that started to unfold in late 2007. One year into the crisis, both government-sponsored enterprises (GSEs) had lost more than 90% of their share value.
The Wall Street Journal gives a teaser, in the form of excerpts from a speech to be made later today, on new rules the Consumer Financial Protection Bureau will be implementing to regulate how servicers treat homeowners who become severely delinquent on their mortgages. Unlike past efforts to stop servicer abuses, the CFPB’s new rules will cover all servicers, as opposed to bank-affiliated ones.
Submitted by David Stockman via Contra Corner blog, One of the most deplorable aspects of Greenspan’s monetary central planning was the lame proposition that financial bubbles can’t be detected, and that the job of central banks is to wait until they crash and then flood the market with liquidity to contain the damage.