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NEWS ABOUT: mortgage backed securities

Commercial Real Estate Crisis May Rival '90s Disaster

(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,... More »

Geithner: 'These Policies Will Work'

Treasury sec lays out $1T plan in op-ed

(Newser) - Tim Geithner caps a weekend of lobbying for the administration's $1 trillion Public-Private Investment Program in an op-ed for the Wall Street Journal, arguing that "the financial system as a whole is still working against a recovery." For the Treasury secretary, all the previous measures will fail... More »

Feds Seize Wholesale Credit Unions

Regulators move to stabilize credit union industry as condition reaches critical

(Newser) - Federal regulators have taken control of two major wholesale credit unions, which provide services to thousands of credit unions nationwide, to stabilize the industry, Bloomberg reports. The institutions, which have combined assets of $57 billion, failed the so-called stress test, showing an unacceptably high level of risk from mortgage-backed securities.... More »

Toxic Asset Plan to Offer Subsidies to Investors

Plan will offer loans, subsidies to investors willing to suck up bad assets

(Newser) - The Treasury will unveil a plan to take up to $1 trillion in mortgage-backed securities and other troubled assets from financial institutions early next week, the Wall Street Journal reports. The plan, the cornerstone of efforts to rescue the banking system, calls for the creation of an entity to buy... More »

MBA Programs Face Their Role in Financial Crisis

(Newser) - Executives have taken a lot of blame for the financial crisis, whether for focusing on short-term gains in stock price or placing too much faith in ultra-complex financial instruments, writes Bradford Plumer for the New Republic. But what about the business schools that taught them to manage that way in... More »

Fed Bailout Spawns More 'Zombie' Banks

Fed lifelines preserve banks that, frankly, are better off dead

(Newser) - The Federal Reserve’s aggressive lending to banks has helped avert financial collapse, but it may have created some monsters as well, the Wall Street Journal reports. A research paper from the University of Chicago suggests that while federal aid has succeeded some in thawing frozen credit markets, it has... More »

Finance Geeks Behind Crisis Hard at Work on a Fix

The inventors of the CDO turn their math minds to better valuations of assets

(Newser) - The finance-desk math wizards who created the securities behind the market meltdown are now betting they can think their way out of the mess, the Wall Street Journal reports, working to design new systems for pricing bad assets fairly so governments can buy them off of banks’ balance sheets. “... More »

Credit Crunch Pinches Entire Lending System

Undercapitalized banks stand to benefit from $1T infusion

(Newser) - Banks aren’t lending, and to change that the government is propping up not just the banks but also the vast, largely unseen financial system that fuels them, the New York Times reports. Banks rarely keep the loans they make anymore; instead, debt is packaged into securities and sold, generating... More »

How the Crisis Changed Bernanke

Extraordinary times have changed the Fed chairman's language and policy

(Newser) - Crises change people, and the changes wrought by the financial meltdown on Fed Chairman Ben Bernanke were well evident at a Press Club lunch yesterday, writes Dana Milibank for the Washington Post. Previously known for bland answers, this academic now tempers his economist-speak with straight talk and supplemented official data... More »

Mortgage Plan Relies on Incentives, Lacks Muscle

Proposal does does little to address securitized mortgages

(Newser) - The Obama administration’s foreclosure-prevention plan contains more carrots than sticks, relying heavily on incentives designed to prod mortgage servicers to modify at-risk loans, the Wall Street Journal reports. The plan offers monetary rewards to mortgage companies that lower interest rates on delinquent mortgages, and reduces principal for borrowers who... More »

Cramer Changes Course: Have Faith in Geithner

It's cheaper than nationalization, and gets banks moving again

(Newser) - Geithner’s got it, James Cramer writes in New York—much to his own surprise. Cramer notes that he's railed against the Treasury chief for months, but he's now come around just as others have abandoned him. “The press, the pols, the Wall Streeters—they are all dumping their... More »

America's Biggest Banks Are Zombies

Many are already insolvent, and feds will need a bolder plan

(Newser) - In the corridors of Wall Street and Washington, a worrying consensus is growing: Some of the nation's largest banks are in fact insolvent. If banks reassessed the value of the complex mortgage-backed securities that taint their balance sheets, they would outweigh all assets on hand, writes Steve Lohr of the... More »

No Silver Bullet for Crises Like These: Pearlstein

Complex financial system requires complicated fixes ... and lots of patience

(Newser) - With various factions blaming a single factor—and pushing a single solution—for the financial crisis, Steven Pearlstein of the Washington Post cautions that there won’t be a silver bullet. Reducing foreclosures, removing toxic assets, and nationalizing banks will all come into play; meantime, we must “resist the... More »

30-Year Mortgage Rates Fall to Record Low 5.01%

Fed buys $10.2B in agency mortgage bonds

(Newser) - Interest rates on 30-year fixed mortgages fell to a record low 5.01% this week, Bloomberg reports. The drop—the 10th weekly fall in a row—comes as the Federal Reserve purchased $10.2 billion of mortgage-backed securities from Fannie Mae, Freddie Mac, and Ginnie Mae as part of a... More »

Just How Bad Was 2008?

The worst anyone under 70 has seen, Bloomberg reports

(Newser) - If you're under the age of 70, 2008 was probably the worst year you've lived through, reports Bloomberg. Here's why:
  • In housing, which started the downturn, median resale prices saw a 13% decline, the largest since the 1930s.
  • Foreclosure rates reached 2.97%, and mortgage delinquency hit 6.99%, both
... More »

As Bills Loom, Developers Cry Bailout

Some $530B in commercial mortgages will need refinancing—and credit is tight

(Newser) - Developers worried about the health of the commercial real estate market want a piece of the bailout action, the Wall Street Journal reports. They say $530 billion in commercial mortgages will be up for refinancing in the next 3 years, but credit “simply is not available.” Without government... More »

Obama Taps Schapiro as SEC Chair

Schapiro brings a wealth of experience to her new position

(Newser) - Barack Obama named Mary Schapiro as chair of the beleaguered SEC today, the Wall Street Journal reports. Schapiro's hefty resume includes stints as an SEC commissioner under former presidents Reagan and Bush, and another as acting commissioner in 1993 by Bill Clinton. Since then, Schapiro served on and eventually headed... More »

Profits Were Fake, Bonuses All Too Real

How risky schemes left bankers flush, banks broke

(Newser) - Dow Kim was one of the leading bond traders at Merrill Lynch, and in 2006 he bundled together $500 million in loans into a huge CDO with the charming name Costa Bella. Since the subprime collapse, Costa Bella has cost Merrill millions—but Kim had already cashed out, awarded a... More »

Bailout Turns to Shore Up Credit Unions

$41B will focus on largest; most haven't seen a dime yet

(Newser) - Largely overlooked by federal regulators managing the bailout, credit unions will receive  $41 billion in lending to brace a handful of the largest institutions in a plan expected to be announced this week, the Wall Street Journal reports. The plan is intended to bring relief to as many as 10,... More »

Goldman May See $2B Fourth Quarter Loss

Credit downgrades key catalyst in Wall Street titan's loss of value

(Newser) - After dodging many of the bullets that left its Wall Street peers wounded or dead, Goldman Sachs faces a net loss of up to $2 billion for the fourth quarter, the Wall Street Journal reports. The loss of $5 per share is five times worse than analysts feared as the... More »

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