[eventusstultorummagister]

Huh? The banks did nothing wrong??
???Selling BS paper (liar loans packaged up as AAA-rated securities)???

Homeowner's should call their loan servicer (the company that bills them every month) and ask who actually owns their loan, now wait for the tapdance to begin <queue music: "Hello-ma-baby, hello-ma-darlin', hello-ma-ragtime gal...">. Chances are pretty good that they have no clue because it has been sold again and again. Is it any wonder that there is no chance of loan modification or short sale? Who do you negotiate with???

None of this will even matter a few years(or LESS!) down the road. The banks don't have enough capital to back their losses. Every time they sell an asset for .50 cents on the dollar they are forced to take the loss on their books. Banks will continue hiding their lack of required capital with phony assets (inflated valuations). They're not worried either because if they get themselves in trouble the taxpayer will bail them out.


"Nearly a dozen major banks and hedge funds, anticipating quick profits from homeowners who fall behind on property taxes, are quietly plowing hundreds of millions of dollars into businesses that collect the debts, tack on escalating fees and threaten to foreclose on the homes of those who fail to pay.
The Wall Street investors, which include Bank of America and JPMorgan Chase & Co., have purchased from local governments the right to collect delinquent taxes on several hundred thousand properties, many in distressed housing markets, the Huffington Post Investigative Fund has found"

[olecapt]

Originally Posted by eventusstultorummagister

Huh? The banks did nothing wrong??
???Selling BS paper (liar loans packaged up as AAA-rated securities)???

Homeowner's should call their loan servicer (the company that bills them every month) and ask who actually owns their loan, now wait for the tapdance to begin <queue music: "Hello-ma-baby, hello-ma-darlin', hello-ma-ragtime gal...">. Chances are pretty good that they have no clue because it has been sold again and again. Is it any wonder that there is no chance of loan modification or short sale? Who do you negotiate with???

None of this will even matter a few years(or LESS!) down the road. The banks don't have enough capital to back their losses. Every time they sell an asset for .50 cents on the dollar they are forced to take the loss on their books. Banks will continue hiding their lack of required capital with phony assets (inflated valuations). They're not worried either because if they get themselves in trouble the taxpayer will bail them out.


"Nearly a dozen major banks and hedge funds, anticipating quick profits from homeowners who fall behind on property taxes, are quietly plowing hundreds of millions of dollars into businesses that collect the debts, tack on escalating fees and threaten to foreclose on the homes of those who fail to pay.
The Wall Street investors, which include Bank of America and JPMorgan Chase & Co., have purchased from local governments the right to collect delinquent taxes on several hundred thousand properties, many in distressed housing markets, the Huffington Post Investigative Fund has found"

The big deal is put backs where the banks are required to take back loans sold to investors or others because they don't meet the required standards. There is some indication that vulture finds may be acquiring bad loans at five cents on the dollar to try and force back to the banks at 100 cents on the dollar.

[007 license to sell]

Here's some info that you may find interesting, the statistics in this article are trouble some when you realize how much banks are holding in bad loans just in Nevada alone.
This article also breaks down what happened to our housing market and what amount of homes purchased in Nevada were purchased with Fannie Mae and Freddy Mac backed guarantees.
Silver State has extra helping of bad debt to Freddie Mae, Fannie Mac

[RCCCB]

Originally Posted by 007 license to sell

Here's some info that you may find interesting, the statistics in this article are trouble some when you realize how much banks are holding in bad loans just in Nevada alone.
This article also breaks down what happened to our housing market and what amount of homes purchased in Nevada were purchased with Fannie Mae and Freddy Mac backed guarantees.
Silver State has extra helping of bad debt to Freddie Mae, Fannie Mac

I think a while ago I told you about how all the banks are insolvant and are using an Obama approved accounting tool called "Future Value" to look like they are viable.
The whole thing is a house of cards long ready to collapse IMO.

[SportyandMisty]

Originally Posted by RCCCB

I think a while ago I told you about how all the banks are insolvant and are using an Obama approved accounting tool called "Future Value" to look like they are viable.
The whole thing is a house of cards long ready to collapse IMO.

I think you must be referring to FASB’s mark-to-market accounting rule changes. FASB decided to loosen the "mark to market" accounting rules in FASB 157, allowing balance sheets to stray away from the strict fair value accounting that is believed to have intensified the market turmoil. Critics of fair value felt, in a quick summary, that with toxic assets like the mortgage backed securities having to be written down to next to nothing, the banks’ reserves were to be hit dramatically. This destroyed the ability of banks to lend, causing companies to not be able to borrow, which caused the economy to down-spiral into a global recession which, closing the loop, reduced the value of properties inside MBSs and CDOs. Instead, banks now have the freedom to value assets using their own valuation models, at what they feel they would be worth under “normal” market standards.
Values will be based on what the assets would sell in an “orderly” transaction in a non-distressed environment. This may turn out to be quite dangerous, as the banks are now able to give a market value for toxic assets with no actual market.

At the time of the change, the wild swings in valuation from day to day caused real harm. There was never much justification in my mind to require writing off an asset until you knew what would happen in an orderly market clearing process.

Now we know: the price of real estate has come down pretty drammatically, as everyone knows.

The bank auditors also know this.

Banks cannot say arbitrarily "hey, this loan portfolio of $1 Billion in mortgages -- It's worth $950 Million". The auditors know better and will flag that. The banks have to justify to their auditors in very heated meetings just what the true value in an orderly market is for that portfolio of $1B at face falue. It probably isn't $950M. It probably isn't $1 either.

There is some pretty good analysis going in to the valuations. But the process is still open to abuse.


Oh - by the way - President Obama didn't have anything to do with it.

[eventusstultorummagister]

Originally Posted by RCCCB

...Obama approved accounting tool called "Future Value" to look like they are viable.

Guess who the proponents were... Bank lobbyists and "surprise surprise" the banks all recorded earnings boosts after the new accounting rules were enacted.

The smaller banks and credit unions are already beginning to tumble in Vegas, some with as much as 300% of their capital tied up in huge risk-based investments like commercial real estate!

People are overly optimistic saying Vegas will bounce back. Vegas has never seen these circumstances which collectively amount to the proverbial perfect storm. The next five years will be a rocky road for Vegas and that's only if nothing happens to further undermine the local economy.

[olecapt]

Originally Posted by eventusstultorummagister

Guess who the proponents were... Bank lobbyists and "surprise surprise" the banks all recorded earnings boosts after the new accounting rules were enacted.

The smaller banks and credit unions are already beginning to tumble in Vegas, some with as much as 300% of their capital tied up in huge risk-based investments like commercial real estate!

People are overly optimistic saying Vegas will bounce back. Vegas has never seen these circumstances which collectively amount to the proverbial perfect storm. The next five years will be a rocky road for Vegas and that's only if nothing happens to further undermine the local economy.

You need to lay off the doom kick...it is warping your perceptions.

There are huge sets of losses still laying out there that no one is in any hurry to pick up. And we may well see some more small banks go under...the price for financing real estate past good sense. Note that some of these banks were basically chartered for that purpose...and worked well for some years.

The base of Las Vegas is still the same. Its number one factory is intact and will come back reasonably swiftly. I don't know that growth, our number two industry, is going to recover any time soon but that may be a good thing. A rational growth policy or outcome would make Las Vegas an even better place to live.

I would like to see some steps to unsnarl the housing mess in Las Vegas which is pretty close to unique. But even that will in time run its course.

[RCCCB]

Originally Posted by SportyandMisty

I think you must be referring to FASB’s mark-to-market accounting rule changes. FASB decided to loosen the "mark to market" accounting rules in FASB 157, allowing balance sheets to stray away from the strict fair value accounting that is believed to have intensified the market turmoil. Critics of fair value felt, in a quick summary, that with toxic assets like the mortgage backed securities having to be written down to next to nothing, the banks’ reserves were to be hit dramatically. This destroyed the ability of banks to lend, causing companies to not be able to borrow, which caused the economy to down-spiral into a global recession which, closing the loop, reduced the value of properties inside MBSs and CDOs. Instead, banks now have the freedom to value assets using their own valuation models, at what they feel they would be worth under “normal” market standards.
Values will be based on what the assets would sell in an “orderly” transaction in a non-distressed environment. This may turn out to be quite dangerous, as the banks are now able to give a market value for toxic assets with no actual market.

At the time of the change, the wild swings in valuation from day to day caused real harm. There was never much justification in my mind to require writing off an asset until you knew what would happen in an orderly market clearing process.

Now we know: the price of real estate has come down pretty drammatically, as everyone knows.

The bank auditors also know this.

Banks cannot say arbitrarily "hey, this loan portfolio of $1 Billion in mortgages -- It's worth $950 Million". The auditors know better and will flag that. The banks have to justify to their auditors in very heated meetings just what the true value in an orderly market is for that portfolio of $1B at face falue. It probably isn't $950M. It probably isn't $1 either.

There is some pretty good analysis going in to the valuations. But the process is still open to abuse.


Oh - by the way - President Obama didn't have anything to do with it.

The way this one works under the Obama administration is you can have a home on the books that was a 300k value now worth 100k written as 350k as long as you don't sell it. Banks don't have their balanced based on actual values, and they can't sell anything without taking a loss.

One of the things Obama did to help them pull off this fiasco is loan them a ton of money at 0% interest, then the banks took our tax money and bought 3% bonds with the 0% money.

Bottom line is this is all a house of cards about to blow down.

You also read last week about the historic high amount of CEO owned stock being sold off while the market was made higher for the elections.
As a wealth preservation move the CEOs are removing their money while all they have to pay is 15% now compared to near 40% on capital gains under Obama starting Jan, 2011.
Tax tax tax tax tax....

[Swigchow]

Anything new?

[eventusstultorummagister]

Originally Posted by Swigchow

Anything new?

A Las Vegas estate built for the Prince of Brunei had it's asking price slashed from $60M to $37.5