Skip navigation
MOST POPULAR RELATED TAGS
  • TOPICS
  • SECTORS
  • COMPANIES
 

  Current Housing Indicators
CURRENTPREVIOUS
Existing Home Sales4.49m4.74m
New Home Sales309,000344,000
Housing Starts583,000477,000
Building Permits547,000531,000
HMI9UNCH9
Existing Home Prices$170,300▼ (annually)$199,800
New Home Prices$201,100▼ (annually)$232,400
 
Realty Check Video Gallery
Secondary lenders are starting to hold up short sales, reports CNBC's Diana Olick.
Fewer mortgages were underwater in Q3, with CNBC's Diana Olick.
 
HOMEBUILDERS TOP 10 INDEX
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...
Loading...

REALTY CHECK VIDEO

» More

Current DateTime: 06:09:29 09 Nov 2009
LinksList Documentid: 30871294
Expiration DateTime: 11/9/2009 6:12:34 PM

RSS FEED

» Help

Current DateTime: 06:09:30 09 Nov 2009
LinksList Documentid: 30871303
powered by digg

Realty Check

Text Size
Dec.02
1:18 PM ET
Tuesday, 2 Dec 2008
The Investor "Revolt" Over Modified Loans

I’m actually surprised it took this long. As more and more banks announced they were getting more and more aggressive on loan modifications, it seemed the investors in these loans were being just a little too silent.

We’ve talked a lot about the investor “issue” when it comes to loan mods; that so many subprime loans were pooled and sold into the broader markets, making it difficult to modify the loans. Banks like JP Morgan [JPM  Loading...      ()   ] and Citigroup’s [C  Loading...      ()   ]  modification programs are focused for the most part on loans that are on their own books and were not sold off.

But the massive Countrywide deal with several states attorneys general to do thousands of modifications was bound to hit a snag with investors, and now, according the Wall Street Journal, it has. The paper reports that one such investor in mortgage-backed securities, a Mr. William Frey, is the lead plaintiff in what he hopes will be a class action lawsuit challenging the $8.4 billion Countrywide settlement (Countrywide of course now owned by Bank of America [BAC  Loading...      ()   ] , which is handling all those modifications). The settlement requires BofA to modify about 400,000 loans, the bulk of which are investor-owned.

It all comes down to who should pay for the big bad mortgage mess. BofA claims Countrywide’s agreement with investors allows modifications of defaulted loans, while the lawsuit claims Countrywide has to buy back any loans that it modifies.

To be honest, I think both sides are wrong and both sides are right and frankly they should split the losses right down the middle. The lenders and servicers did an egregious job underwriting the loans, handing them out to any borrower with an outstretched hand, but the investors on in turn turned a blind eye to what they had to know was a risky bet. Let them all suffer!

As for all those Wall Streeters now out of work, I suggest you all go to law school.

Questions?  Comments? 

© 2009 CNBC, Inc. All Rights Reserved

Tools:
PrintEmailAdd This share icon
Next Post
  • digg share
ADD COMMENTS
Remaining characters


Current DateTime: 03:21:08 09 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 08:52:06 09 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 04:47:44 09 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 08:52:07 09 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters