Some irony for this morning is that Wells Fargo reported
record profits primarily related to their improvement in their mortgage banking
division the same week that the government filed a lawsuit against Wells Fargo
for mortgage fraud. Wells Fargo’s
currently announced record profits have nothing to do with the timing of the
lawsuit because the government is accusing the bank of mortgage fraud on loans
closed between 2002 and 2010. What I do
find very interesting and disturbing is that the mortgage crisis began in 200
and based upon the government’s lawsuit, Wells Fargo may have been continuing to
commit fraud through 2010 which is 3 years into the mortgage and housing
crisis. We will have to watch and see
how this plays out.
More evidence of the housing recovery is that JP Morgan
Chase also reported record profits relating in large part to improvement in
their housing and mortgage division.
Jamie Dimon, CEO of the bank made a bold declaration this week that in
his opinion the housing recovery has
arrived.
What excites me most about all the positive housing news is
that even though the market is improving off of very low numbers, the fact is
that the positive news for housing just keeps coming. This is bound to accelerate the housing
recovery as the “herding effect” begins to take hold. “Herding” is a term often used when people
flock together towards a trend. It is
likely that with the continuing positive housing news homebuyers will begin to
flock back towards the purchase market further improving the overall housing
market.
The stock market continues to remain stuck in neutral as the concerns about Spain’s financial troubles along with the stalemate in Congress regarding the “fiscal cliff” has investors sitting on the sidelines. It is clear that until the election is settled, we cannot expect any movement in government.
JJ Mack
No comments:
Post a Comment