Loans

BofA reject wins Fannie Mae booby prize

6 Jun 2012

No good deed goes unpunished. Tim Mayopoulos, fired as the mega-bank hid Merrill losses in 2008, is the mortgage zombie’s new boss. That won’t improve the firms’ tense relationship. And he’s taking a pay cut. But his integrity and background make him a decent fit for the job.

Pick-a-pay creator follows dodgy product to grave

4 Jun 2012

Golden West founder Marion Sandler has died aged 81. She and husband Herb built a supremely efficient mortgage lender, sold at the top and donated $1.3 bln to political and other causes. But they’ll be remembered as the architects of one of the more egregious mortgage offerings.

US housing recovery shows subsidies need trimming

17 May 2012

Recent strong data, including property prices, suggest the market is bottoming. It’s cheap to borrow, too. Mortgage interest tax deductions and above all loan guarantees look ripe for cutting. The cash saved could then be put to more productive uses.

ResCap bankruptcy brings Ally full circle

14 May 2012

Seven years ago, Ally Financial - then GMAC - was worried its GM links would bring down high-flying ResCap. It’s an irony of the financial cycle that cutting loose the U.S. mortgage unit may now give the car finance firm its best chance of repaying Uncle Sam’s $17 bln bailout.

U.S. mortgage lessons lost in student debt policy

30 Apr 2012

Lawmakers are close to making the same mistake on college loans they did with housing. When government subsidies help send prices soaring, borrowers should be restrained. To curb the crazy growth of higher education costs demands less, not more, of Uncle Sam’s involvement.

Japan’s IMF loan gives China a citizenship lesson

17 Apr 2012

The ailing nation is the first non-European to give to the fund’s euro bailout effort with a $60 bln commitment. That follows a 2008 pledge from the IMF’s No. 2 stakeholder. But China also has much vested in saving the euro and could learn from Japan’s unconditional largess.

Student debt may land double whammy on US growth

20 Mar 2012

Graduates are forking over far more in loan repayments than a decade ago, easily outstripping salary growth. Over time, that’ll dent GDP. Defaults are rising, too. With Uncle Sam now holding $450 bln of student debt and rising, that puts taxpayers on the hook - again.

Frannie boss shoots more good ideas into the wind

21 Feb 2012

All credit to the FHFA for keeping reforming the money-losing mortgage agencies on the agenda. The watchdog has some workable goals for reducing Fannie and Freddie’s distorting influence and bringing in more private capital. But without action from Congress, change is a ways off.

Citi, BofA prove too big to punish harshly

17 Feb 2012

The banks will pay fines - $158 mln and $1 bln respectively - to settle claims they defrauded Uncle Sam through mortgage insurance. Citi even admitted it. Its awful quality control lapses make a ban on government business seem in order. But Washington needs big banks too much.

Dexia sued for rare thing it can’t be blamed

8 Sep 2011

The Belgian-French bank is being sued by some French local authorities after loans pegged to the strong Swiss franc soared in cost. Dexia may escape the blame for what looks a case of caveat borrower. Its real problems are its messy funding, and sovereign debt exposure.

RBS’s uncertain road ahead gets even bumpier

5 Aug 2011

Though the UK bank met expectations in the first half, its shares are being savaged in the broader market sell-off. The balance sheet clean up is going well, but euro zone exposure is starting to hurt. The bank’s goal of 15 pct return on equity by 2013 is also looking vulnerable.