[mEDITate-OR:
not see&read two critical reports on foreclosures AND on 2nd mortgages...
To fully understand what is true about 2nd mortgages...
and where they fit into the foreclosure/modification process...
you WILL need to read these two articles.
The first article tells U.S. that The Big Banks WERE holding back on foreclosures.
and that now they are not - the flood gates are open.
That means there are, and will be many more, additional foreclosed properties added to the RE economy.
The second article is one of the best explanations of where the 2nd are, and who is servicing them.
What that tell U.S. is that not do The Big Bank control most of the 2nd mortgages...
but, they also control most of the RE servicing.
Which means that they COULD have solved/addressed the RE crisis IF they had wanted to.
From the testimony, not just, given it is clear that they do NOT want to do it.
Two significant points:
first, IF they addressed the underwater RE loans they made to U.S..., they would have to write off/down not only the lost RE values, but also the 2nd mortgages that they also hold.
IF they did that, they would be required to raise their "capital"..., which they are doing - note their profit reports for the 1st Q.
what we believe they ARE doing is making as much "cash"/profits as they can..., anyway they can do it...
so that when, not if, they have to address the RE and 2nd mortgage losses, they have the funds, in house (no pun intended) to do it.
second, what we thought was a major problem - that the diffused ownership of the securitized ARM mortgages was preventing the modification of those dead zone - 2002-6, and sand states - Cal, Nev, Fla & AZ, underwater RE loans.
is not totally true.
Bcuz, the Big Banks not only MADE many of those RE loans, but they also "service" them.
What that means is that many, but not all, securitized packaged RE loans, simply cannot be modified..., bcuz there is nobody to talk to.
AND
that many more than we thought there were are RE loans serviced by the Big Banks, who simply do not WANT to modify them, even thought they could.
We are talking Trillions here.
==============
============
=========
No comments:
Post a Comment