Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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U.S. Could Face $2 Trillion Lending Shock - Goldman

Friday, Nov. 16, 2007
LONDON -- The impact of the U.S. mortgage market crisis on the underlying economy could be "dramatic" as leveraged investors may need to scale back lending by up to $2 trillion, according to investment bank Goldman Sachs.

In a report dated Nov. 15, Goldman 's chief U.S. economist Jan Hatzius said a "back-of-the-envelope" estimate of credit losses on outstanding mortgages, based on past default experience, was around $400 billion.

But unlike stock market losses, which are typically absorbed by "long-only" investors, this mortgage-related hit is mostly borne by leveraged investors such as banks, broker-dealers, hedge funds and government-sponsored enterprises.

And leveraged investors react to losses by actively cutting back lending to keep capital ratios from falling — a bank targeting a constant capital ratio of 10 percent, for example, would need to shrink its balance by $10 for every $1 in losses.

"The macroeconomic consequences could be quite dramatic," Hatzius said in the note to clients. "If leveraged investors see $200 billion of the $400 billion aggregate credit loss, they might need to scale back their lending by $2 trillion."

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"This is a large shock," he said, adding the number equates to 7 percent of total debt owed by U.S. non-financial sectors.

Hatzius said such a shock could produce a "substantial recession" if it occurred over one year, or a long period of sluggish growth if it occurred over two-to-four years.

One of a number of caveats outlined in the report was that baseline economic forecasts may already include significant reductions in the pace of mortgage lending.

But the conclusion remained a gloomy one regardless.

"The likely mortgage credit losses pose a significantly bigger macroeconomic risk than generally recognized," he wrote. "While the uncertainty is large, the associated downward pressure on lending raises the risk of significant weakness in economic activity."

© Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters.

And it's 100% the fault of people who denied the risk of ms fraud and related crimes to the economy. There are only a handful of crooks at the top and many politicians and judges  allowing this to happen it's the ostrich people who stick their heads in the sand who are to blame, the criminals do what they are allowed or encouraged to do. The evangelical Christian leaders have been the biggest supporters of domestic terrorism. As we have traveled across the country no group of people has been more hostile towards investigation of corporate crimes and political corruption than the churches. The attitude has been been one of religious fanaticism and zealotry in support of corporate crime and political/judicial corruption.

We are Christians and have traveled coast to coast fighting ms fraud and related lending fraud and have visited many churches. We have experienced first hand the hatred and rage towards those exposing fraud and corruption and the desperate pleas by church members to forgive and forget to in order to protect those committing the crimes.

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