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Posts Tagged ‘mortgage crisis’

GMAC Loses $5 Billion in Fourth Quarter

NEW YORK (Reuters) – GMAC Financial Services, a lender that has received more than $16 billion from the U.S. government across multiple bailouts, said it lost $5 billion in the fourth quarter after writing down bad mortgage assets.

GMAC, one of the largest car loan makers in the United States, said in December that it did not expect to record more major losses from its mortgage unit. Home loans fueled GMAC’s growth earlier this decade but have since triggered billions of dollars of losses for the company.

The fourth-quarter loss compares with net income of $7.5 billion in the fourth quarter of 2008.

Home Foreclosures Jump 23%

Oct. 15 (Bloomberg) — U.S. foreclosure filings climbed to a record in the third quarter as lenders seized more properties from delinquent borrowers, according to RealtyTrac Inc.

A total of 937,840 homes received a default or auction notice or were repossessed by banks, a 23 percent increase from a year earlier, the Irvine, California-based seller of default data said today in a report. One out of every 136 U.S. households received a filing, the highest quarterly rate in records dating to January 2005.

“The problem is prime loans going into foreclosure and people being underwater and losing their jobs,” Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles, said in an interview. “It’s a really bad number.”

Mounting foreclosures mean U.S. home prices probably will resume falling, analysts from Amherst Securities Group LP in New York said Sept. 23. A “shadow inventory” of 7 million properties are in the foreclosure process or likely to be seized, up from 1.27 million in 2005, they said.

Home Prices May Fall Another 25%

Home prices in the US could fall by another 25 percent because of high unemployment and another leg down will come for stocks, banking analyst Meredith Whitney told CNBC Thursday.

“No bank underwrote a loan with 10 percent unemployment on the horizon,” Whitney said. “I think there is no doubt that home prices will go down dramatically from here, it’s just a question of when.”

Local governments and states are chronically under-funded and “most states are under water,” adding to the problem of low private consumption, she said.

Mortgage Giants Stocks Plunge on News of Federal Bailout

NEW YORK (CNNMoney.com) — Shares of mortgage finance giants Fannie Mae and Freddie Mac, suffering their worst day since a mid-July free fall, plunged Monday to their lowest points in nearly two decades.

Greenspan Says Housing Prices Nowhere Near Bottom

July 31 (Bloomberg) — Former Federal Reserve Chairman Alan Greenspan said falling U.S. home prices are “nowhere near the bottom” and the resulting market turmoil isn’t showing signs of abating.

More Americans filed claims for unemployment insurance last week than at any time in more than five years, the Labor Department said. Fed policy makers have cut the benchmark rate to 2 percent from 5.25 percent since September, halting the reductions in June amid rising concern about inflation.