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IPFS News Link • Housing

Foreclosure-Gate: Hundreds Of Billions In Mortgage Claims Could Kill Top Banks

Bank industry expert Chris Whalen is the subject of a good interview with CNBC coming conveniently in the aftermath of the possibly earth-moving Ibanez decision out of Massachusetts. First, he says, the ruling has been misunderstood in that the homeowners are ultimately not going to win loan forgiveness merely because of errors in the handling of the loan. But that doesn't mean serious losses aren't coming with devastating consequences. Specifically he says: "But investors in RMBS are facing hundreds of billions of dollars in losses on securities where the note was either not delivered or done so in a haphazard and negligent fashion. These claims could kill some of the top banks." Beyond that, Whalen is mixed. He sees rising earnings in the quarter coming right now, but also sees another leg of the housing decline, which will hurt more than folks are expecting. Beyond that he's talked a lot about the sheer grinding costs of banks having to put out all these fires in the past.