Archive for November, 2007

Citigroup passes HSBC with $11 billion in write-downs

Written by Timothy Blake on November 07, 2007 under Analysis, Archives

Previously HSBC held the top spot in subprime write-downs at approximately $11 billion (USD). HSBC bought predatory lender Household International but blames subprime problems on mortgage brokers. There is always room at the top and now it appears HSBC will be bumped as the number one loser, as Citigroup warned of more writedowns on subprime mortgages on top of more than $6 billion of charges reported for this quarter. How much more? Here is the rest of the story:

Indy Mac Sings the Mortgage Blues as speculators walk

Written by Timothy Blake on November 06, 2007 under Archives, Investors, Lenders

Does this sound like it would be a problem? IndyMac, a Top 10 mortgage lender nationally, had been No. 1 in loans to so-called Alt-A borrowers, typically small business owners with good credit scores who wrote off their expenses so aggressively that their tax returns showed little income. The lender made mortgages to those customers without documenting their earnings. What happens when the tax man and the bill collectors come?

Responsible Lending Act revisited

Written by Timothy Blake on November 06, 2007 under Analysis, Archives

The responsible lending act – the name sounds great doesn’t it. How about “Your Credit Counts” – another good sounding idea. The truth is “your credit counts” was designed by predatory lender Household International. The “responsible lending act” was an initiative by Congressman Paul Kanjorski and Republican Bob Ney of Ohio. Bob Ney was sent to prison for 30 months. Nothing is as it appears in this unprecedented time for the housing market and the mortgage industry.

Our children pay the high price of financial folly

Written by Timothy Blake on November 06, 2007 under Archives, Economic Impact, Editorial, Government Positions, Investors, Job Losses, Lenders, Mortgage Insurance, Opinion, Root Causes

President Clinton repealed the Glass-Steagall Act which had prevented the coupling of investment banking and lending. Following President Clinton, George W. Bush proved to be very pro-business, but at a high cost to the average consumer. Intelligent Americans realized consumer spending and risky lending practices would come with a very high price. The full impact was not felt by baby-boomers and those age 50 and over. Our children will pay the high price of folly for a long time.

Investors dump bank shares, credit card crisis to follow

Written by Timothy Blake on November 05, 2007 under Archives, Economic Impact, International, Investors

The Dow continued to decline at Monday’s opening (November 5, 2007) and the trend in London is to get rid of investments in banks. It is 9 AM in the U.S. and 3 PM in London as the trend continues. We are on central standard time, and we learned that Alliance & Leicester led the sector’s decliners, followed by HBOS, Northern Rock, Royal Bank of Scotland, and Barclays. US-based Citigroup CEO Chuck Prince resigned which spooked the market.

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