Yup, the BIG BANKS are BOOMING while the unemployment and economic crisis remain unresolved.
At least interest rates are low:
"Banks are biggest winners as mortgage rates drop" by Peater Eavis | New York Times, August 09, 2012
Interest rates on mortgages and refinancing are at record lows, giving borrowers plenty to celebrate. But the bigger winners are the banks making the loans.
Banks are making unusually large gains on mortgages because they are taking profits far higher than the historical norm, analysts said. That 3.55 percent rate for a 30-year mortgage could be closer to 3.05 percent if banks were satisfied with the profit margins of just a few years ago. The lower rate would save a borrower about $30,000 in interest payments over the life of a $300,000 mortgage.
''The banks may say ‘We are offering you record low interest rates, so you should be as happy as a clam,'’’ said Guy D. Cecala, publisher of Inside Mortgage Finance, a home loan publication. ‘‘But borrowers could be getting them cheaper.’’
It USED to be called PRICE-GOUGING and is supposed to be ILLEGAL, but this is where we are in 21st-century AmeriKa!
Mortgage bankers acknowledge that they are realizing big gains right now from home loans. But they say they cannot afford to cut rates even more because of the higher expenses resulting from stiffer regulations....
Even though those regulations have yet to to be written.
And HOW MUCH in PROFITS did they make last quarter?
The jump in revenue for the banks is not coming from charging consumers higher fees. Instead, it comes from the their role as middlemen. Banks make their money by taking the mortgages and bundling them into bonds that they then sell to investors, like pensions and mutual funds. The higher the mortgage rate paid by homeowners and the lower the interest paid on the bonds, the bigger the profit for the bank.
Good lord, they are BACK to the SAME BEHAVIOR that DESTROYED the WORLD ECONOMY and REQUIRED a BAILOUT!
The banks are well positioned to profit because of their role in the mortgage market.
After they bundle the mortgages into bonds, the banks transfer nearly all of the loans to government-controlled entities like Fannie Mae or Freddie Mac. The entities, in turn, guarantee the bond investors a steady stream of payments.
In other words, ALL the LOSSES are TRANSFERED to the American taxpayer!!!
The banks that originated the loans take the guaranteed bonds, called mortgage-backed securities, and sell them to investors. The banks nearly always book a profit when the bonds are sold.
It's the MBS scam that destroyed the world economy, folks.
Related: BANKERS GONE WILD
WALL STREET'S MORTGAGE-BACKED SECURITY FRAUD DESTROYED BOTH THE US AND EU ECONOMIES!
And that is what is also behind the European debt crisis as the turd IMF director Christine LaGarde insists that fraudulent debt must still be repaid. That's why the European people are in the streets (from the few tucked-inside and back-section articles I've seen).
You know, if I were a terrorist....
Or a pirate.
‘'One of the reasons that the banks charge more is that they can,’’
said Thomas Lawler, a former chief economist of Fannie Mae and founder
of Lawler Economic and Housing Consulting, a housing analysis firm.
Interest rates on mortgages and refinancing are at record lows, giving borrowers plenty to celebrate. But the bigger winners are the banks making the loans.
Banks are making unusually large gains on mortgages because they are taking profits far higher than the historical norm, analysts say. That 3.55 percent rate for a 30-year mortgage could be closer to 3.05 percent if banks were satisfied with the profit margins of just a few years ago. The lower rate would save a borrower about $30,000 in interest payments over the life of a $300,000 mortgage.
I feel like I read this somewhere before.
Mortgage lenders may also be benefiting from less competition. The upheaval of the financial crisis of 2008 has led to the concentration of mortgage lending in the hands of a few big banks, primarily Wells Fargo, JPMorgan Chase, Bank of America, and U.S. Bancorp.
Oh, so the "crisis" actually HELPED the BIG BANKS CONSOLIDATE the MORTGAGE MARKET as they FRAUDULENTLY FORECLOSED on HOMES, huh?
‘’Fewer players in the mortgage origination business means higher profit margins for the remaining ones,’’ said Stijn Van Nieuwerburgh, director of the Center for Real Estate Finance Research at New York University.
Related: JPMorgan Made $5 Billion in the Second Quarter
Also see: "The bank now says it earned $4.92 billion for the quarter ended March 31, or $459 million less than originally reported."
Hey, what's a few million here and there? What jerks.
Mary Eshet, a spokeswoman for Wells Fargo, said the mortgage business remains competitive.
The other three banks declined to comment. But the banks are benefiting from the higher mortgage gains. Wells Fargo reported $4.8 billion in revenue from its mortgage origination business in the first six months of the year, an increase of 155 percent from $1.9 billion in the first six months of 2011.
JPMorgan and U.S. Bancorp are also reporting very high levels of mortgage origination revenue.
I hate to be the one to tell you, folks, but NOTHING HAS CHANGED in FOUR F***ING YEARS despite ALL the TALK!
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Of course, low rates are not benefitting you:
"Banks’ record-low interest rates frustrate nation’s savers" by Todd Wallack | Globe Staff, October 01, 2012
Neil Silverman, a Framingham engineer, diligently saved for decades, accumulating a nest egg worth more than $1 million.
But when Silverman reached retirement age, he encountered an unexpected hurdle: interest rates so low that his savings are generating little income. Even $1 million in the bank at 1 percent interest yields just $10,000 a year — not much to live on.
So at 69, Silverman says, “I’m the proverbial retiree next door and I can’t afford to retire.”
He's got a million dollars in the bank!
This is the guy the Globe chose to represent retirees?
It really is an elitist money paper, folks. They are almost as bad as Romney!
Just when you thought rates on popular savings vehicles couldn’t possibly go lower, they do. The average interest on a savings account is 0.08 percent a year, down one-third from last year, according to the Federal Deposit Insurance Corp. That means $10,000 would generate just $8 a year in interest.
That explains the chump-change cents I see at the bottom of my book every month, for I am nowhere near $10,000.
Rates for those willing to lock up their savings for years are just as paltry. The average yield for five-year CDs dropped below 1 percent for the first time on record last month, down from more than 4 percent in early 2007 and down roughly one-third from last fall, according to survey by Bankrate.com, a financial news site.
But the BANKS are BOOMING in PROFITS!
Ultra-low rates are a by-product of the Federal Reserve’s efforts to revive the economy by making it cheaper for Americans to borrow money for everything from purchasing a home to investing in a new business. But what has been good for borrowers has been bad for savers, especially seniors who depend on interest from savings to supplement their income.
Now we know who is responsible.
Rates have continued to fall since the Fed pledged last month to keep interest rates down through 2015 to try to boost the economy. Analysts predict rates will remain on a downward trend in coming months.
Bank of America, the biggest bank in Massachusetts, is now offering just 0.01 percent interest a year on its regular savings account, down from 0.05 percent earlier this year. And rivals are not offering much better rates. Even Internet banks typically offer no more than 1 percent interest.
The low rates have forced a growing number of seniors to keep working, invest in riskier securities, or cut back on vacations, gifts, and other expenses....
Laura Varas, a principal with Hearts & Wallets in Hingham, which conducted the survey, said the low rates also discourage younger workers from saving to buy a home or to fund retirement. But she said the impact is particularly severe on the millions of middle-class seniors who were counting on savings to supplement their Social Security and pension checks.
The central bank’s efforts to reduce interest rates have already sparked some grumbling by seniors. Even the Fed’s chairman, Ben Bernanke, acknowledged the toll rock-bottom rates are taking on savings accounts but said in the long term they could help buoy the value of other assets — such as homes and businesses — and ultimately create jobs.
We have been hearing that same shtick for four f***ing years!
“While low interest rates do impose some costs, Americans will ultimately benefit most from the healthy and growing economy that low interest rates help promote,” Bernanke said last month.
Have these fuckers no shame?
Meanwhile, many seniors have been forced to find creative ways to boost their income.
Related(?): Globe's Bottle Bill Burp
I sure see enough old folks fishing through them around here.
Many, for instance, have scoured the Internet for credit unions and banks that offer CD specials or higher rates for savings deposits....
Bob Marcotte, a 62-year-old retired telephone company manager, said he moves money around about twice a month to try to take advantage of such promotions....
Why not? That's how Wall Street makes its money with it's computerized trading schemes that distort the market.
Seniors do not have many alternatives. Money market mutual funds, which traditionally offered better yields than bank accounts, currently return just 0.06 percent a year, on average, according to Crane Data of Westborough.
Some advisers recommend that seniors invest a portion of their savings in bonds, dividend-paying stocks, and other investments. But bond yields have plunged along with interest rates. And many seniors are wary of stocks, since they do not have decades to recover from market drops.
“The stock market is pretty volatile,” said Kathleen Dollard, a certified financial planner at Nashoba Financial Planning in Boxborough. “Most of my clients have to be pretty conservative.”
Dollard said the problem is compounded by the fact that many seniors have watched their home values plummet in recent years, erasing another key part of their net worth....
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So BoA can't afford any interest on the money you let them play with?
"Mortgage fallout looms, but Bank of America shows profit" by Christina Rexrode | Associated Press, July 19, 2012
In a reminder that the consequences from the financial crisis are far from over, Bank of America said Wednesday that investor disputes over bad mortgages and mortgage-backed bonds have more than doubled from a year ago.
The bank beat Wall Street’s profit expectations for April through June, and executives emphasized that the bank is setting aside less money for bad loans overall, a sign that more customers are paying back loans on time.
Related: Banks Reserve Profits For Themselves
Still are.
But the growing number of investor claims suggests the mortgage problem, which has already cost the bank more than $13 billion, is growing.
‘‘It’s certainly a lot of bad news,’’ said Guy Cecala, chief executive and publisher of the trade publication Inside Mortgage Finance. ‘‘The mortgage banking business of most major banks now is turning into a big profit center.’’
The claims are from investors who bought mortgages or mortgage-backed bonds from Bank of America before the 2008 crisis. Investors have alleged that Bank of America and other banks misled them about the quality of the mortgages.
The banks have been forced to buy back some of those mortgages after investors threatened to sue.
Yes, and then the Fed bought them by printing more money. That's why prices keep going up, 'murkn.
The bank swung to a $2.1 billion profit after it slashed jobs and other expenses.
Related: Bank of America to speed job cuts
They want to "make" even more.
In last year’s second quarter, the bank lost $9.1 billion, largely because it had to pay $8.5 billion to settle claims from mortgage investors.
The stock rose briefly before the market opened, then sank all day....
Outstanding claims from mortgage investors jumped to nearly $23 billion from $10 billion a year ago, led partly by new claims from Fannie Mae, the government-sponsored mortgage lender.
Bank executives said they believe many of the new claims from Fannie Mae are invalid. Fannie Mae’s standards for submitting claims ‘‘continue to be inconsistent with their own past conduct and our interpretation of our contractual obligations,’’ the bank said in a presentation for analysts.
Bruce Thompson, the chief financial officer, said the bank expects the outstanding claims to grow. The process for resolving them, he said, ‘‘continues to evolve, and does remain unclear.’’
But Countrywide, known for making exotic mortgages, has drawn regulatory fines and made the bank a target for angry homeowners. The bank’s mortgage unit has not turned an annual profit since 2007.
Hey, that higher rate you are paying on that new mortgage is just helping out BoA and who could be against that?
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Also see: Final Withdrawal From BoA
I might make a couple more stops at the update ATM if I see anything in the great unread business sections of my Boston Globe.
