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US Foreclosure Mess Impact Could Be Severe: Panel



November 16, 2010 – Comments (3) | RELATED TICKERS: SKF , FAZ , DRV

Widespread problems in how U.S. lenders documented foreclosures could spark a wave of legal challenges resulting in massive losses to banks and serious new troubles for the housing market, a federal watchdog warned on Tuesday.

The Congressional Oversight Panel, the overseer of the government's Wall Street bailout, in its latest report laid out a range of possible outcomes for the foreclosure paperwork mess that emerged in the worst-case scenario, it warned that banks could face billions of dollars in losses.
Banks are accused of having used "robo-signers" to sign hundreds of foreclosure documents a day without proper review, a fiasco that reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.

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3 Comments – Post Your Own

#1) On November 16, 2010 at 3:15 PM, rfaramir (28.60) wrote:

"resulting in massive losses to banks" sounds good to me! If they cheat, they pay, period.

"serious new troubles for the housing market" True, foreclosure need to happen to bring prices down to market level and flush out the malinvestments. Anything that gets in the way of that is trouble.

"banks may be unable to prove that they own the mortgage loans they claim to own, legal challenges could call into question the validity of 33 million mortgage loans — many of which were then securitized and sold" boohoo! No sympathy for anyone selling (fencing) something they don't own.

End the Fed. The Federal Reserve caused the housing boom by listening to the advice of former Enron advisor Paul Krugman. It was made worse by corrupt lawmakers, especially with the CRA. Carrot and stick, the banks were seduced and forced into bad loans in a higher quantity than they could keep track of. Too bad! 

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#2) On November 17, 2010 at 10:30 AM, XMFSinchiruna (26.40) wrote:


Was Krugman really an Enron advisor? hah... I had no idea. :)

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#3) On November 17, 2010 at 10:49 AM, rfaramir (28.60) wrote:

I wouldn't normally make snide or ad hominem remarks, but as he doles out advice, it is arguably fair to show to whom he was an advisor. His advice is really horrid! He actually asked the Fed to create a housing bubble to replace the deflated tech bubble.

I didn't dig this up on my own, though. I saw someone else say it, googled for the phrase, and found that 'everyone' says it. The first two pages of hits are full of sources which have reputations to defend, from ABC news and Huffington Post to Rush Limbaugh and National Review.

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