BK Consequences & Lender's Three Card Monty
Truth or Consequences? ... Seems the new BK law which banks rammed down the throat of the public is backfiring.
Good news?... The amount of money owed on U.S. credit cards with payments more than 30 days late fell to $7.04 billion Q2 from $8.37 billion two years earlier.
Bad news... In the same period, the dollar volume of repossessed homes owned by insured banks doubled to $4.2 billion.
Ack Basswords... That's because given no differentiation under the new BK law...
the choice to service either CC or mortgage debt becomes defacto, the higher interest debt CC gets paid first.
Believe it or Not... Capital One's CEO: "People are putting their credit card payments ahead of their mortgages.
Of customers who are at least three months late on their mortgage payments, 70% are current on their credit cards.
What we conclude is that people are saying, Honey, let the house go, but keep the cards".
Momma Didn't Raise No Fool...
Jonathan Weil at Bloomberg pulls up WaMu and Countrywide's petticoats (Edgar 10-Q's) to reveal a pair of throughly shit stained knickers.
by reclassifying loans as investments, banks can postpone big losses, hoping the values rebound later.
Both companies changed the asset classifications for billions of dollars of mortgages to "held for investment" from "held for sale."
Mortgages classified as "held for sale" must be carried on the balance sheet at cost or market value, whichever is lower, with any declines hitting quarterly earnings.
Mortgages "held for investment," by contrast, need be written down only if they have suffered an "impairment" that is "other than temporary," which can mean different things to different people.
Countrywide transferred $12.32 billion of prime non conforming mortgages to held-for-investment, after first marking them down by $418 million.
Non conforming means these loans do not conform to FNAM or FHLMC guidelines and thus no buyers will touch them.
The biggest U.S. mortgage lender finished the quarter with $30.86 billion of loans held for sale and $83.56 billion in the investment category.
WaMu transferred $17 billion of loans to its investment portfolio, after first marking them down by $147 million.
This left the nation's largest savings and loan with $7.59 billion in the held-for-sale category at Sept. 30 and $235.2 billion of loans classified as investments.
The Nattering One muses... Isn't that extra special?
73% of Countrywide loans and a staggering 97% of WaMu loans are being treated as "investments" by their book cookers, and as such, are NOT subject to write down.
Investors in either company run of risk of being blindsided in the future, by unexpected losses and future writedowns.
Good news?... The amount of money owed on U.S. credit cards with payments more than 30 days late fell to $7.04 billion Q2 from $8.37 billion two years earlier.
Bad news... In the same period, the dollar volume of repossessed homes owned by insured banks doubled to $4.2 billion.
Ack Basswords... That's because given no differentiation under the new BK law...
the choice to service either CC or mortgage debt becomes defacto, the higher interest debt CC gets paid first.
Believe it or Not... Capital One's CEO: "People are putting their credit card payments ahead of their mortgages.
Of customers who are at least three months late on their mortgage payments, 70% are current on their credit cards.
What we conclude is that people are saying, Honey, let the house go, but keep the cards".
Momma Didn't Raise No Fool...
Jonathan Weil at Bloomberg pulls up WaMu and Countrywide's petticoats (Edgar 10-Q's) to reveal a pair of throughly shit stained knickers.
by reclassifying loans as investments, banks can postpone big losses, hoping the values rebound later.
Both companies changed the asset classifications for billions of dollars of mortgages to "held for investment" from "held for sale."
Mortgages classified as "held for sale" must be carried on the balance sheet at cost or market value, whichever is lower, with any declines hitting quarterly earnings.
Mortgages "held for investment," by contrast, need be written down only if they have suffered an "impairment" that is "other than temporary," which can mean different things to different people.
Countrywide transferred $12.32 billion of prime non conforming mortgages to held-for-investment, after first marking them down by $418 million.
Non conforming means these loans do not conform to FNAM or FHLMC guidelines and thus no buyers will touch them.
The biggest U.S. mortgage lender finished the quarter with $30.86 billion of loans held for sale and $83.56 billion in the investment category.
WaMu transferred $17 billion of loans to its investment portfolio, after first marking them down by $147 million.
This left the nation's largest savings and loan with $7.59 billion in the held-for-sale category at Sept. 30 and $235.2 billion of loans classified as investments.
The Nattering One muses... Isn't that extra special?
73% of Countrywide loans and a staggering 97% of WaMu loans are being treated as "investments" by their book cookers, and as such, are NOT subject to write down.
Investors in either company run of risk of being blindsided in the future, by unexpected losses and future writedowns.
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