Monday, September 10, 2007

Your Monday financial news roundup

Top thrift company may have more losses on books

WaMu has the latest bad housing industry news:
Washington Mutual Inc., the largest U.S. thrift, said that conditions in the housing market are creating a `near-perfect storm' and may force the company to set aside more money to cover bad loans.

Chief Executive Officer Kerry Killinger told the Lehman Brothers Holdings Inc. financial services conference today the bank may have to increase its loan-loss provision by $500 million. Previously the bank forecast provisions of $1.5 billion to $1.7 billion for the full year.

Killinger also indicated he expects problems to last a while.

Readers Digest-ville has sexy housing fallout

A Pleasantville, N.Y., mortgage broker couple, after watching their $750,000 asking price on a house fall below $600K, allegedly turned it into a brothel.

Mortgage-related job losses may almost double

Firings, etc. may break 100,000:
As many as 20 percent of the nation's real estate loan officers and mortgage brokers will be fired, according to Josh Rosner, managing director at the New York investment research firm Graham Fisher & Co. That's in addition to the 10 percent reduction from December to July that thinned their ranks to 450,000 as investors stopped buying mortgages and lenders curtailed financing to avoid rising subprime defaults.

Remember, that’s only direct job losses, not any “ripple” losses from how this affects the broader economy. Semi-directly, that could include mortgage appraisers, title-company clerks and settlement attorneys. Indirectly, we’re talking about people without jobs not buying things.

More support offered for a two-year slump

Financial ratings company Moody’s expects the current housing slump to last until 2009. (Nowhere in the story does Moody’s except its share of the blame in all this for its blank check puff rating of collateralized debt obligations in the last few years.