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Tag: derivatives

Congress Shoots Down FHA Mortgage Program

Congress Shoots Down FHA Mortgage Program

FHA mortgage borrowers and American homeowners will have fewer opportunities for success in the coming year as a result of the newly-minted 2015 budget bill. You won’t see such a headline anywhere but if you check page 1,560 of the just-approved federal budget you will find language which shows how Washington really works. “SEC. 235. […]

Obama Second Term To Challenge Big Banks

Obama Second Term To Challenge Big Banks

It will be in the mid 40s for the second inauguration of Barack Obama, but  behind the secenes things will be a lot hotter. One of the big themes of the next four years concerns banks, lending and clarity. In the past few weeks thousands of pages of new regulations have been published as a […]

Big Bank Derivative Bets Nearly Double In Six Years

Big Bank Derivative Bets Nearly Double In Six Years

America’s major banks now hold derivatives with a notational worth of $225 trillion — about a third of the world total. No kidding. Trillion. And that’s up from a mere $120 trillion six years ago. Rather than being weened off derivatives, America’s big banks are more deeply entrenched then ever. Hopefully Wall Street has it figured […]

How Paper Mortgage Losses Turned Real

How Paper Mortgage Losses Turned Real

The question that keeps coming up is this: If only a small portion of all mortgages are failing how come the general financial impact has been so enormous? To resolve this mystery, let’s go back to the 1970s when the mortgage-backed security — the MBS — was developed. The MBS was a financial device designed […]

Foreclosures & The Multiplier Effect

Foreclosures & The Multiplier Effect

If we’re just having a subprime crisis, then how come the impact is worldwide? That’s the essential question raised by Ben Stein, an attorney and economist who you may also know as a droll actor and TV pitchman. Writing in the New York Times, Stein points out that we have a $10.4 trillion mortgage marketplace […]

Should We Hedge Foreclosures?

Should We Hedge Foreclosures?

Imagine you were facing foreclosure and that your lender was willing to work out a deal — a loan modification — so you could keep your home while the lender could avoid the costs of a foreclosure. This sounds like a great outcome for everyone, except that it isn’t. Believe it or not, some folks […]