As Bills Loom, Developers Cry Bailout

Another mortgage-backed securities market gets into trouble

(NEWSER) - Just as the economy starts to recover, a second mortgage disaster may be looming. The commercial real estate sector is tanking, with many properties unable to generate enough cash to make mortgage payments. Lo and behold, those commercial mortgages have been sewn into securities—comparable to the packages of home mortgages that set of the financial crisis last year—in a $700 billion market where delinquency rates are skyrocketing. More»

(NEWSER) - Commercial real-estate borrowers are defaulting on their loans at an ever-faster pace, and experts now believe the crisis could match or exceed the early-1990s slump, the Wall Street Journal reports. That catastrophe killed off 1,000 banks and savings institutions, with lenders taking $48.5 billion in charges. This time, one firm estimates, as much as $250 billion could be lost, resulting in more than 700 bank failures. More»

With another $8.5B to come

(NEWSER) - Bank of America has, as expected , reached an agreement for an $8.5 billion settlement with a group of disgruntled investors who lost truckloads of money buying mortgage-backed securities from Countrywide Financial, the bank announced today. It’s the largest payoff yet from a financial services firm, the Wall Street Journal reports, and it may embolden other financial crisis victims to file suits of their own. More»

They're near deal to settle allegations on mortgage-bond deals

(NEWSER) - A number of top Wall Street banks are on the verge of settling fraud allegations with the SEC for the mortgage-bond shenanigans that led to the financial crisis, sources tell the Wall Street Journal . The cases are being handled individually, since each bank faces substantially different charges, with the first settlement expected as soon as next week. They represent regulators’ biggest attempt so far to hold Wall Street accountable for the crisis. More»

Recommends perjury charges for Blankfein

(NEWSER) - Goldman Sachs may have criminally misled its clients when it sold them mortgage-backed securities without mentioning that Goldman itself would profit if they failed, the Senate’s Subcommittee on Investigations has concluded, recommending that the Justice Department and SEC consider pressing charges. The panel also recommended perjury charges against CEO Lloyd Blankfein, who they contend lied when he said under oath that Goldman had not bet against the mortgage market solely for its own profit, Bloomberg reports. More»