NY Fed, 8 Firms Threaten BofA Over Mortgage Securities

The New York Federal Reserve Bank is part of a consortium of eight large institutional investment firms that is demanding that Bank of America repurchase loans included in mortgage securities.

Bloomberg reported earlier Tuesday that the New York Fed had joined with the Pacific Investment Management Company, better known as Pimco, and investment management firm BlackRock in an attempt to force BofA to buy back $47 billion in mortgage bonds.

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Will There Ever Be a ‘Tidal Wave’ of REO Listings?

Today’s Outlook column looks at how bank-owned foreclosures and other involuntary home sales will govern the pace of home price declines over the coming months.

Banks and other companies that sell REO, or real-estate owned, properties are typically faster to reduce prices than traditional sellers, so they tend to speed along any price correction. That’s why it’s a good idea to keep an eye on the share of distressed sales—including foreclosures and short sales, where banks approve a sale for less than the amount owed.

While that share is rising—Barclays estimates that it jumped to 30% of all sales in July, from 22% in June—there’s nothing to suggest, at this point, that a tidal wave of foreclosures will hit the market.

The reason: banks are taking greater steps to avoid foreclosures, including loan modifications and short sales, where a home sells for less than the amount owed.

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Investors Call Auction of High-End Resort ‘Dishonest' and ‘Immoral'

The auction of one of Utah's fanciest resorts has drawn a furious response from investors. But the attorney representing the company that bought Wasatch County's Zermatt Resort says everything about the auction was perfectly legal.

The transactions leading to Monday's auction are complicated, but simply put: The company that sold the resort is the same company that bought it; and in doing so, they wiped out as much as $20 million in debt.

Zermatt is an award-winning resort for the wealthy; a touch of Switzerland in the Heber Valley. The resort is in its fourth year, trying to build an international clientele.

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How Financial Reform Could Affect You

Once signed into law by President Barack Obama, how will the new financial reforms of the Dodd-Frank Wall Street Reform and Consumer Protection Act affect consumers?

One of the most prominent features of the bill is the creation of a Consumer Financial Protection Bureau within the Federal Reserve. Its mission will be to oversee consumer financial products offered by banks, mortgage companies, credit cards, debt-settlement firms, loan providers and payday lenders. It will have the authority to craft regulations, launch investigations and act on consumer complaints. The following is a sample of other ways the bill may—or may not—act on average Americans.

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