Major Banks Still Grappling With Foreclosures

Too Gloomy? Whitney Predicts 25% Home Price Plunge
Wall Street Journal, September 11, 2009

U.S. home prices–which have already tumbled nearly a third from the 2006 peak–could plunge by another 25% as high unemployment levels continue, according to prominent banking analyst Meredith Whitney. It’s a gloomy prediction that comes as the housing market is showing some signs of stability. Further price erosion would mean that more homeowners could find themselves owing more on their mortgage than their house is worth, a particularly tough position if there’s a job loss. Homeowners who are unemployed and underwater are often unable to sell their homes and forced to walk-away, adding more fuel to the foreclosure crisis. Still, it might be welcome news for potential buyers looking for a bargain.

As an Exotic Mortgage Resets, Payments Skyrocket
New York Times, September 10, 2009

Edward and Maria Moller are worried about losing their house — not now, but in 2013. That is when the suburban San Diego schoolteachers will see their mortgage payments jump, most likely beyond their ability to pay. The plight of the Mollers and many others in a similar position is likely to weigh on any possible recovery for years to come.

Major Banks Still Grappling With Foreclosures
National Public Radio, September 9, 2009

A year ago this week, the financial crisis sent the stock market off a cliff. At the heart of troubles was a plague of bad home loans. Millions of people couldn't pay their mortgages, and banks were losing billions of dollars. The foreclosure mess hasn't improved. The numbers keep getting worse, with foreclosures at record highs and rising, despite a major effort by the Obama administration to prevent them. At Bank of America, which manages more home loans than any other bank in the country, Senior Vice President Ken Scheller is in charge of "home retention" — an effort he says is designed to "keep as many people in their homes as possible."