Citigroup (NYSE:C), Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM) and Wells Fargo (NYSE:WFC) are facing extraordinary losses in relationship to mortgage problems, and it appears it may be far worse than is being taken account of analysts and pundits are taking account of or understanding.
The underlying problem is the shadow inventory held by the banks, as they are looking at huge exposure because they are struggling to get control of delinquent mortgages and the properties.
If they aren't able to bring these properties to the market in an efficient and timely manner, they will continue to lose on the loss in value in the properties as they sit vacant and face the resultant consequences that come with that.
The banks also appear to be failing to take appropriate measures in inadequate loss reserves, or for that matter, loss reserves at all. In other words they seem to be ignoring the problem. Maybe they are comfortable, thinking they'll be bailed out again by taxpayers.
Interestingly, if the giant banks can't bring their inventory to market, it will probably be good for the housing market, even as it is devastating to them.
With the market rallying, it may be time to think of shorting banks in light of these issues. Investing in financial ETFs like (AMEX:RKH) and (NYSEArca:XLF) are other possibilities.
Showing posts with label Foreclosures. Show all posts
Showing posts with label Foreclosures. Show all posts
Monday, April 4, 2011
Wednesday, March 30, 2011
Bank of America (BAC) Sued Again Over Foreclosure Practices
Bank of America Corp. (NYSE:BAC) is again the recipient of a lawsuit related to foreclosure practice, this time from shareholders asserting the bank didn't "properly record many of its mortgages when originated or acquired, which severely complicated the foreclosure process when it became necessary.”
Not only was the paperwork in disarray, claim the shareholders, bu the bank allegedly also concealed the number of workers available to process the huge number of foreclosed loans was insufficient.
Consequently, they claim that resulted in the drop in price of shares of Bank of America by 42 percent after the issues were made public.
The giant bank is accused of breaching fiduciary duty, wasting corporate assets and mismanagement, according to the complaint.
Bank of America closed Tuesday at $13.35, falling $0.02, or 0.15 percent.
Not only was the paperwork in disarray, claim the shareholders, bu the bank allegedly also concealed the number of workers available to process the huge number of foreclosed loans was insufficient.
Consequently, they claim that resulted in the drop in price of shares of Bank of America by 42 percent after the issues were made public.
The giant bank is accused of breaching fiduciary duty, wasting corporate assets and mismanagement, according to the complaint.
Bank of America closed Tuesday at $13.35, falling $0.02, or 0.15 percent.
Friday, February 18, 2011
Bank of America (BAC) May Sell Socialite's Foreclosed Home to Donald Trump
Socialite Patricia Kluge has lost her third piece of property to foreclosure, with Bank of America (NYSE:BAC) taking control of Albemarle House with a bid of $15.3 million at a foreclosure auction.
The giant bank had made three separate loans to Kluge, according to a foreclosure lawsuit, where the bank was seeking a minimum of $23.9 million in unpaid principal and interest Kluge owed it.
The property is located close to Monticello, the former home of Thomas Jefferson. Kluge had listed it for sale in the past for $100 million. Eventually it was dropped to $24 million, but there were still no takers.
Reports are Donald Trump is interested in possibly acquiring the properties of Kluge, which include a 960-acre vineyard adjacent to the Albemerle House. All properties total about 1,800 acres, according to the business advisor of Kluge, Les Goldman, whom the Trump Organization has retained as an adviser.
Imagine that! The Donald may be selling grapes.
The giant bank had made three separate loans to Kluge, according to a foreclosure lawsuit, where the bank was seeking a minimum of $23.9 million in unpaid principal and interest Kluge owed it.
The property is located close to Monticello, the former home of Thomas Jefferson. Kluge had listed it for sale in the past for $100 million. Eventually it was dropped to $24 million, but there were still no takers.
Reports are Donald Trump is interested in possibly acquiring the properties of Kluge, which include a 960-acre vineyard adjacent to the Albemerle House. All properties total about 1,800 acres, according to the business advisor of Kluge, Les Goldman, whom the Trump Organization has retained as an adviser.
Imagine that! The Donald may be selling grapes.
Friday, February 4, 2011
Bank of America (NYSE:BAC) Sued Over Faulty Lending Practices
The lawsuits keep on coming for the giant banks, and the latest has been filed against Bank of America (NYSE:BAC) by the benefit plan of a local union, alleging faulty lending practices led to a drop in the share price of the company.
According to the lawsuit, which is seeking class action status, Bank of America didn't have enough workers to process the large amount of foreclosures it had to deal with. The suit also alleges the bank hid billions of dollars in debt it had incurred.
The benefit plan of the local union acquired about 25,000 shares of Bank of America in 2010 at $19 each, and after announcing they were being investigated, the giant bank's share price plunged to as low as 69 cents a share.
At the time BofA had to postpone the pending foreclosures during the process.
The suit hopes to represent all investors who purchased stock from the bank from January through October 2010.
Bank of America was trading at $14.22, down $0.21, or 1.46 percent, as of 11:53 AM EST.
According to the lawsuit, which is seeking class action status, Bank of America didn't have enough workers to process the large amount of foreclosures it had to deal with. The suit also alleges the bank hid billions of dollars in debt it had incurred.
The benefit plan of the local union acquired about 25,000 shares of Bank of America in 2010 at $19 each, and after announcing they were being investigated, the giant bank's share price plunged to as low as 69 cents a share.
At the time BofA had to postpone the pending foreclosures during the process.
The suit hopes to represent all investors who purchased stock from the bank from January through October 2010.
Bank of America was trading at $14.22, down $0.21, or 1.46 percent, as of 11:53 AM EST.
Monday, January 31, 2011
Bank of America (NYSE:BAC) Appeals Foreclosure Ruling in Nevada
The recent ruling by a judge in Nevada which blocked 8,900 foreclosures Bank of America (NYSE:BAC) was processing, is being challenged by the giant bank through an appeal.
Nye County District Court Judge Robert Lane issued a temporary restraining order against ReconTrust, a Bank of America subsidiary, in regard to the foreclosures.
Bank of America said in a motion, "The order has created enormous upheaval and confusion in the foreclosure process across Nevada and immediate review is required."
The restraining order, if it remains in place, will be effective until a hearing on February 28.
Bank of America was trading at $13.77, gaining $0.17, or 1.29 percent, as of 1:16 PM EST.
Nye County District Court Judge Robert Lane issued a temporary restraining order against ReconTrust, a Bank of America subsidiary, in regard to the foreclosures.
Bank of America said in a motion, "The order has created enormous upheaval and confusion in the foreclosure process across Nevada and immediate review is required."
The restraining order, if it remains in place, will be effective until a hearing on February 28.
Bank of America was trading at $13.77, gaining $0.17, or 1.29 percent, as of 1:16 PM EST.
Friday, December 10, 2010
Bank of America (NYSE:BAC) Starting Foreclosure Process Again
After criticism for mishandling the seizure of some homes, Bank of America (NYSE:BAC) said they're ready to resume sales of foreclosures.
Barbara Desoer, president of Bank of America Home Loans, said, "We have identified areas of our process that can be improved and while we make these improvements, it's important that we move ahead with efforts to reduce the number of abandoned properties across the country. The properties can drag home values in neighborhoods and slow the eventual recovery of the housing market."
"We continue to be committed to ensuring that no property is taken to foreclosure sale until our Bank of America customer is given an opportunity to be evaluated for a modification or, if ineligible for a modification, a short sale or deed in lieu solution," added Desoer.
Bank of America was trading at $12.63, down 0.02, or 0.16 percent, as of 12:08 PM EST.
Barbara Desoer, president of Bank of America Home Loans, said, "We have identified areas of our process that can be improved and while we make these improvements, it's important that we move ahead with efforts to reduce the number of abandoned properties across the country. The properties can drag home values in neighborhoods and slow the eventual recovery of the housing market."
"We continue to be committed to ensuring that no property is taken to foreclosure sale until our Bank of America customer is given an opportunity to be evaluated for a modification or, if ineligible for a modification, a short sale or deed in lieu solution," added Desoer.
Bank of America was trading at $12.63, down 0.02, or 0.16 percent, as of 12:08 PM EST.
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