After prompting from an IRS auditor, the agency will study whether it should make greater use of data on mortgage-interest payments provided to it by banks. The IRS currently uses such data to send notices to non-filers who it believes should have filed a return. – WSJ1 No good deed goes unpunished, eh? 

From Karl Denninger at Market Ticker via Freedom’s Phoenix comes this reasonable question: How about a little honesty from commentators in the mainstream media? "Liquidity conflagrations" happen when people discover they have been lied to. Anyone remember Bear Stearns?  "We’re well capitalized" on CNBC?  "Everything is fine"?  Cramer’s pumping of them on his show as "safe"? Market participants in fact knew everything was not fine.  There were statements flying around (that turned out to be true) that some counter-parties had begun refusing to novate deals with Bear.  It was the discovery of the lie that caused the run on Bear…
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It’s Friday, and thanks to cpgone for sharing Clusterstock’s Brief update on the mortgage collapse.  They have a bunch of interesting graphs that pretty much look like a collection of hockey sticks.  Here’s one we were told we’d never see:

Volume in Fannie and Freddie also started to pick up around that time. Investors traded 7 million shares of Fannie on Aug. 4. The next day it was 117.1 million. Fannie trading has gone higher recently, hitting 831.4 million on Monday. The same day Freddie jumped to 386.5 million. For a bit of context, in late July and early August, Freddie volume was in the single-digit millions. [ / / ] We asked our crack squad of Dow Jones math ninjas to crunch the numbers on these five stocks to find out exactly how much of the entire market action…
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HOEPA was enacted in 1994 in response to Congressional concerns over “reverse redlining.” [PDF] According to the Senate Banking Committee report accompanying the legislation, “reverse redlining” is the practice of targeting residents of specific disadvantaged communities for credit on unfair terms, and in particular by second mortgage lenders, home improvement contractors, and finance companies. These lenders were felt to “peddle high-rate, high-fee home equity loans to cash-poor homeowners.” … [1] American Bar Association analysis, vintage August 2007 I’m working through the Q&A session of AEI’s October 11, 2007 Subprime II seminar, and around 1:34:00 on the tape there’s a fascinating…
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The size of the Federal Reserve’s balance sheet rose 2.3 percent as the central bank bought more U.S. Treasuries and mortgage-backed securities. [1] Yep, that’s a 2.3 percent rise over the previous week. I’d ask Doomers to now briefly review last week’s episode in this series of posts. Remember all the foofah about record numbers of indirect buyers? … which includes foreign central banks? Well, had the cenbanks actually gone on a buying spree scooping up US debt back then, it should now be showing up in this post. It hasn’t. Looks like last week’s ballyhooed foreign support for that…
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If a foreclosing lender shirks his new responsibilities to the community,[1] does a borrower who has been shouldering them until now have a right to carry on, even in default? Doomer greggparadiddle thinks so, and we’re happy to help him publicize his proposal for a new legal principle to make it so.  Originally a Doom comment, we’ve taken the liberty of editing the text for clarity. . . . Constructive Foreclosure by greggparadiddle I would propose that people in the situation of "Op-Ed Friday: When even the bank doesn’t want the house" (August 14, 2009) could advance an as yet…
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Old Doom friend mtnmike was kind enough to send this link around.  He’d seen our recent post on statistical hanky panky, and was struck how his thoughts were moving in a similar direction from ours. . . . . Culinary Accounting, or Cookin’ the Books! by Mike Folkerth Greg Easterbrook said, “Torture numbers and they will confess to anything.” Barrack Obama said, “Americans don’t torture.” Either Barrack Obama doesn’t count number-torturing as a crime or his nose is growing. Let’s talk about unemployment numbers. . . real unemployment numbers. The announcement that the unemployment rate declined slightly to 9.4 percent…
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Yesterday CNN warned the tight mortgage lending market could get tighter: NEW YORK (CNNMoney.com) — The potential collapse of Colonial BancGroup poses another hazard to the still-shaky housing market: Mortgages could become even harder to get. The Southern regional bank, based in Montgomery, Ala., is the largest remaining player in warehouse lending, which provides short-term financing to independent mortgage bankers. At one time, these mortgage bankers originated half of all U.S. home loans using these funds. Today, the warehouse lending market is decimated. In 2007 it was worth an estimated $200 billion; now there is just $25 billion available —…
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“The bond got to a point on the curve where the market was able to digest the supply,” said Richard Bryant, senior vice president in fixed income in New York at MF Global Inc., a broker of exchange-traded futures. “It underscores the fact that market participants continue to see value in Treasuries at these yield levels.” [1] I have no idea whether Bryant meant that the yield was "low enough" or "high enough", although the maturity of the paper might be in there somewhere. In any case, when the phase of the Moon is right and Jupiter is aligned with…
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It’s been too long since we’ve reposted one of old Doom friend Bill Maloni’s articles. In this piece Bill puts some forthright suggestions on the table. He certainly has some definite ideas as to how the new Administration should proceed in dealing with the present crisis. Please welcome Fannie’s former chief lobbyist back to Doom Castle. I hardly ever agree with his policy prescriptions, but they’re always intriguing. (The version below has been edited; click on the title below to see the original.) "Banks and the Mortgage Mess" by Bill Maloni … Let’s discuss what the Obama Administration needs to…
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Remember these "green shoot" comments on Aug 3? Even as Americans suffer rising unemployment, foreclosure rates in three states hit hardest by the housing bust — California, Arizona and Florida — stabilized in June, offering hope that the worst of the real estate crisis is over, according to The Associated Press’ monthly analysis of economic stress in more than 3,100 U.S. counties. We have additional information today: NEW YORK (CNNMoney.com) — The foreclosure plague continued to devastate last month. There were more than 360,000 properties with foreclosure filings — including default notices, scheduled auctions and bank repossessions — an increase…
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“Any comment in those files can be pursued by the gentleman’s attorney about what was intended, what it means,” said Allan Grody, president of the New York-based risk management consultancy Financial InterGroup and a former professor of risk management at NYU’s Stern School of Business. “Worlds not though to be damaging or of concern when one fills out a profile of an individual, in light of a prosecution for criminal behavior can take on new meaning.” [1] So now you know What I’ve been trying to do today is work through a psychological analysis of Molloy, Malone Dies and The…
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