“We Know It’s Going To Be Painful”: Half Of Existing Canadian Mortgages Are Up For Renewal In 2018

“We Know It’s Going To Be Painful”: Half Of Existing Canadian Mortgages Are Up For Renewal In 2018:

When commenting last week on the latest troubling trends in Canada’s housing market, we predicted that unlike a previous forecast by Deutsche Bank’s Torsten Slok from early 2015, who at the time said that “Canada is in serious trouble”, this time the moment of truth for Canada’s all important housing market was indeed at hand.

* * *

PayPal: Donate in USD
PayPal: Donate in EUR
PayPal: Donate in GBP

The subprime mortgage is back: it’s 2008 all over again

subprime-housing-crisis

The subprime mortgage is back: it’s 2008 all over again:

Apparently the biggest banks in the US didn’t learn their lesson the first time around…

Because a few days ago, Wells Fargo, Bank of America, and many of the usual suspects made a stunning announcement that they would start making crappy subprime loans once again!

I’m sure you remember how this all blew up back in 2008.

Read moreThe subprime mortgage is back: it’s 2008 all over again

Denmark, Belgium, Now The Netherlands: NEGATIVE Mortgage Rates Spread Across Europe

Denmark, Belgium, Now The Netherlands: Negative Mortgage Rates Spread Across Europe:

In early 2015, after seeing a staggering $1.4 trillion in Euro area government debt trade at negative interest rates (the number has since grown to $6 trillion) we wondered when the bailout of insolvent governments was going to make its way to other debtors. Our question was quickly answered when we found that a negative rate mortgage had been issued by Nordea Credit, a bank in Denmark. Recently, even the WSJ finally stumbled on this bizarre inversion of traditional borrower obligations.

We noted at the time that this this was the first of many such paradoxes, as eventually more and more banks would begin to fall in line with ECB expectations and lend at slightly negative (at first, then progressively more negative) rates, rather than lose even more money as a result of leaving cash in the ECB deposit facility.

This is just the beginning: according the Danish media outlet, as a result of variable-refinancing, as recently as a week from now “a greater share of customers could have a negative rate.”

Read moreDenmark, Belgium, Now The Netherlands: NEGATIVE Mortgage Rates Spread Across Europe

Goldman Sachs Slammed With $5.1 Billion Fine For “Serious Misconduct” In Mortgage Selling

A fine for doing God’s work?

Goldman Sachs CEO Lloyd Blankfein: I’m doing ‘God’s work’

Doing Gods Work


Goldman Slammed With $5.1 Billion Fine For “Serious Misconduct” In Mortgage Selling:

Hot on the heels of Wells Fargo’s $1.2 billion settlement, Bloomberg reports that Goldman Sachs will pay $5.1 billion to settle a U.S. probe into its handling of mortgage-backed securities involving allegations that loans weren’t properly vetted before being sold to investors as high-quality bonds.

“This resolution holds Goldman Sachs accountable for its serious misconduct in falsely assuring investors that securities it sold were backed by sound mortgages, when it knew that they were full of mortgages that were likely to fail,” said Acting Associate Attorney General Stuart Delery.

As AP reports,

The Justice Department announced a $5 billion settlement with Goldman Sachs over the sale of mortgage-backed securities leading up to the 2008 financial crisis.

Read moreGoldman Sachs Slammed With $5.1 Billion Fine For “Serious Misconduct” In Mortgage Selling

Court Filing Illuminates Morgan Stanley Role in Lending

H/t reader M.G.:

“Looking at the destruction Morgan Stanley wrought on the mortgage market, and the crooked judges are looking for a “settlement” early next year. No word about the millions who suffered as a result of their policies, not just those who bought the homes, but all of us who suffered from radical drop in property values as a result of mass foreclosures around us.”


Morgan-Stanley

Court Filing Illuminates Morgan Stanley Role in Lending (CNBC/New York Times, Dec 30, 2014):

Since the financial crisis, Wall Street firms have argued that they were victims, just like everybody else, of the bad mortgages that were churned out by subprime lenders like Countrywide and New Century.

Now, though, a trove of emails and confidential documents, filed in court, reveal the extent to which one of Wall Street’s leading banks, Morgan Stanley, actively influenced New Century’s push into riskier and more onerous mortgages, and brushed aside questions about the ability of homeowners to make the payments.

Read moreCourt Filing Illuminates Morgan Stanley Role in Lending

If At First You Fail Miserably & Blow Up The Financial System, … Do It Again!!!

Wait What

If At First You Fail Miserably & Blow Up The Financial System, Do It Again! (ZeroHedge, Dec 9, 2014):

Here we go again! Mortgage giants Fannie Mae and Freddie Mac have now officially approved 3% down payment mortgages. Having government entities provide low down payment mortgages to people who can’t afford to buy a house is always a good move. Keynesians like Krugman approve wholeheartedly. The housing market will get a nice boost and the working taxpayers will fund the bad debt through Fannie and Freddie. You own Fannie and Freddie. Everyone wins. In case you forgot, the closing costs to sell a house are usually 8% of the home price. So these home buyers are immediately 5% underwater when they move in… “Sometimes I can’t believe I live in a world this f##ked up. And no one notices and no one cares.”

Idiocy On An Epic Scale … How Congress Will Create The Next Financial Crisis: H.R. 5148: Access To Affordable Mortgages Act

Obama_Health_Care_Speech_to_Joint_Session_of_Congress

New bill: Congress engineering yet another financial crisis (Sovereign Man, Sep 6, 2014):

Say hello to the next financial crisis, brought to you courtesy of the dumbest new bill of the week: H.R. 5148: Access to Affordable Mortgages Act.

Ordinarily whenever an individual wants to borrow money for a mortgage, the bank conducts due diligence… both on the borrower as well as the property.

It’s in the banks’ interest (as well as the banks’ depositors) to ensure that the property is at least worth as much as the amount being borrowed. Duh.

Congress doesn’t agree. Apparently when banks conduct property appraisals, that seems to unfairly discriminate against some segment of the population trying to buy crap properties.

And we certainly can’t have that going on in the Land of the Free.

So with HR 5148, Congress aims to exempt certain ‘higher-risk mortgages’ from property appraisal requirements.

Read moreIdiocy On An Epic Scale … How Congress Will Create The Next Financial Crisis: H.R. 5148: Access To Affordable Mortgages Act

Bank of America agrees to $17 BILLION fine over mortgage fraud

Bank of America agrees to $17bn fine over mortgage fraud – report (RT, Aug 20, 2014):

America’s second largest lender has reached a $17 billion settlement with US federal authorities over selling bad mortgages, according to sources close to the negotiations.

The bank will pay out $10 billion in cash and $7 billion for consumer relief – such as modified home loans and refinanced mortgages, AP reports, citing officials close to the negotiations. The final verdict is due on Thursday.

The fine will be the largest single compensation settlement, beating out JPMorgan Chase & Co’s $13 billion penalty paid in November 2013. Citigroup, another major US bank, had to pay $7 billion in July.

Read moreBank of America agrees to $17 BILLION fine over mortgage fraud

Mortgage Standards Are Plunging – It’s Muppet Fleecing Time All Over Again

muppets-kermit-dead

Mortgage Standards Are Plunging – It’s Muppet Fleecing Time All Over Again (Liberty Blitzkrieg, April 21, 2014):

In February, I highlighted the fact that subprime loans were about to make a return in my piece: Subprime Mortgages are Back…This Time Marketed as “Second Chance Purchase Programs.” In that article, I posited that with the “all cash” private equity shops and hedge funds no longer able to make good returns through buying new homes to rent, these investors would need some sucker to sell to in order to realize a return (Blackstone’s purchases have plunged 70% recently). That sucker, as always, will be the retail muppets, and those muppets will be lured in through subprime. This is now starting to happen in earnest.

The following article from the Wall Street Journal is both depressing and disturbing. Rather than allowing home prices to reset at a lower level after the 2008 crash where to normal buyers could afford a sane 20% mortgage, our central planners decided to do “whatever it takes” to re-inflate the housing bubble. This was achieved through wealthy investment pools buying properties for all cash. The trouble is, with home prices now inflated by these financial buyers and no real increase in wages, homes are simply unaffordable. So what do you do? You bring back subprime and get the peasants long real estate with essentially zero money down all over again. Truly remarkable.

Read moreMortgage Standards Are Plunging – It’s Muppet Fleecing Time All Over Again