Foreclosure Mess Is No Reason to Dislike Banks: Strategist

Is a 'national moratorium' on foreclosuresthe right thing to do—and what does it mean for the banking stocks? Jim Meyer, CIO and co-founder at Tower Bridge Advisors, shared his insights.

“We’re negative on the banks in general," Meyer told CNBC.

"...Two issues with the bank stocks that bother us the most is flattening of the yield curve, which hurts their earnings; and the uncertainty of financial regulation, which is going to take most of the next year and then some to implement.”

A furor has been growing over evidence that mortgage lenders have been using flawed court papers to evict homeowners, which has led state and federal officials to ramp up pressure on the mortgage industry.

“This obviously can’t be good news; but from the bank earnings point of view, is somewhat overblown,” said Meyer. “We don’t know how long the delay is going to be…and it will hurt the earnings, a little bit, of the three largest banks. But overall, it’s not a reason to like or dislike the banking sector.”

Scorecard—What He Said:

  • Meyer's Previous Appearance on CNBC (Sept. 28, 2010)

Market Views—Across the Board:

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No immediate information was available for Meyer or his firm.