Got yer doom, with a side of gloom
Mortgage Mess May Cost Big Banks Billions
After scratching their heads for weeks over how much the foreclosure mess will hurt banks’ bottom lines, investors got out their calculators Thursday to tally the potential costs – and sent bank stocks plunging.
Wall Street initially hoped the banks would do just that but as the political furor grew, a quick end to the crisis was looking less and less likely. On Wednesday, 50 state attorneys general announced they were investigating the practices of the mortgage servicing industry, while Florida’s attorney general subpoenaed the nation’s largest mortgage processor, L.P.S., as part of a broader investigation.
Inside the investment houses, several traders said nerves were frazzled further by worries that banks could face much bigger mortgage related losses, not from foreclosures, but because of questions about how the money was lent in the first place. If it turns out that mortgages were bundled together and sold improperly, more holders could sue the banks and force them to buy back tens of billions in mortgage-backed securities. </em>
Add to this the millions of vacant strip malls, office parks, and half-built, never finished, never should have been started buildings sitting dormant and not generating any income, and you have the makings for an even larger meltdown of our financial system than we saw before.
Wonder how much its gonna cost us this time? How much can Wall Street extort from us- for their own fuck up?
