[olecapt]

Originally Posted by tony soprano

Banks owned a significant enough foreclosure inventory that ~81 of them have been shuttered YTD. That's greater than 3X the number of failures in '08 and we have an entire quarter left to go. Treasury has required 10 of the 19 largest banks in the US to raise additional capital, post TARP injections. The 10 banks required to raise cash are; BofA, Wells-Fargo, GMAC, Citigroup, PNC, Regions Financial, SunTrust, Fifth Third, Key Corp, and Morgan Stanley. You might recongize a few "name banks" in there.

Banks don't own a significant inventory? Now, there's your fairytale.

They don't. Virtually all the action is from securitized mortgages. Banks hold very few of those in their own accounts. Fannie May and Freddie Mac certainly have huge holdings. But they are hardly banks.

[tony soprano]

Originally Posted by olecapt

They don't. Virtually all the action is from securitized mortgages. Banks hold very few of those in their own accounts. Fannie May and Freddie Mac certainly have huge holdings. But they are hardly banks.

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication.

Private sector loans, not Fannie or Freddie, triggered crisis | McClatchy

Fannie & Freddie held 24% of the worst dreck. That means 76% ownership of the worst dreck was held by non-Fannie/Freddie entities...including banks. Second, it doesn't matter whether a bank originated the specific defaulting mortgage or owns a bond backed by the defaulting mortgage. If the mortgage defaults, the bond owner takes possession of the collateral, not the loan servicer.

[RCCCB]

Look for a horrible stock market event shortly before or after Oct 25th due to banks and RE. IMO

The Coming Consequences of Banking Fraud -- Seeking Alpha

[olecapt]

Originally Posted by tony soprano

Fannie & Freddie held 24% of the worst dreck. That means 76% ownership of the worst dreck was held by non-Fannie/Freddie entities...including banks. Second, it doesn't matter whether a bank originated the specific defaulting mortgage or owns a bond backed by the defaulting mortgage. If the mortgage defaults, the bond owner takes possession of the collateral, not the loan servicer.

Well yes and no. There may well be three or four entities holding various portions of a mortgage. Practically they can't take title in the name of three or four or more security entities. So what they do is take ownership in the name of the servicing bank. Who then sells the property and distributes the proceeds.

If I remember correctly from the toxic days the banks and private banks owned only about a third of the bad junk and 55% of the good stuff. It was CalPer and the Texas Teachers who owned lots of this junk.

[geos]

The agent I'm working with says banks are holding back inventory to prevent price crash.

[tony soprano]

Originally Posted by olecapt

Well yes and no. There may well be three or four entities holding various portions of a mortgage. Practically they can't take title in the name of three or four or more security entities.

The vast majority of securitized mortgages are pooled and then sliced by levels of risk vs. a single mortgage being sliced into several pieces.

So what they do is take ownership in the name of the servicing bank. Who then sells the property and distributes the proceeds.

It doesn't matter if they take ownership in the name of the Pope, as owner of the note, they own the foreclosed home. It is held on their books and accounted for in their reporting until the property is disposed of.


I mentioned earlier that ~81 banks have failed YTD. The number has climbed to 89.

Five more banks fail in first week of September - Sep. 4, 2009

So, 89 banks have failed in less than 3 full quarters. Hundreds of billions of dollars have been injected into the banking system via TARP. Post TARP injections, 10 of the largest 19 US banks are still directed by Treasury to raise additional capital. Mark-to-market accounting was suspended earlier this year because not doing so would result in too many banks having inadequate capital ratios. And yet, according to you banks don't own any significant inventory.

Maybe all the above is a result of declining ATM fees?

[RCCCB]

Originally Posted by geos

The agent I'm working with says banks are holding back inventory to prevent price crash.

They may be holding back for government bail outs or any other number of reasons including incompetency.

[RCCCB]

Vegas home sales slip as prices continue fall - Las Vegas Sun

The red-hot Las Vegas housing market cooled off a bit in August as home and condo sales dropped and prices edged lower.

[tony soprano]

Originally Posted by RCCCB

Vegas home sales slip as prices continue fall - Las Vegas Sun

The red-hot Las Vegas housing market cooled off a bit in August as home and condo sales dropped and prices edged lower.

August median down...again? Unpossible!

Present trends can not continue!

[olecapt]

Originally Posted by tony soprano

August median down...again? Unpossible!

Present trends can not continue!

Actually has not continued. In the spring we were losing 3 or 4 percent per month. Now we are bouncing along the bottom. Getting splits with some statistics down and others up.

Volume is still in the all time record class. .

Note that the supply of REOs has dropped lower yet and pricing has stabilized. Again in the bottom but not climbing out yet.

But thump some more Tony...Thump...thump...thump...