BankThink

Receiving Wide Coverage ...Housing Gloom: Arizona regulators seized PMI Group's flagship U.S. mortgage insurance unit, and are limiting cash payments to policyholders (i.e., banks and the GSEs) to 50% of claims, with the rest to be deferred. The Journal calls this a sign "that the housing bust is not finished taking casualties-and that lenders and investors are likely to suffer more losses." Zooming out to the bigger picture, the Post has a lengthy feature story that takes stock of the Obama administration's failures to help distressed homeowners or the housing market. The overarching error was an incrementalist approach, according to the article. "The president and his senior advisers … decided against more dramatic actions to help homeowners, worried that they would pose risks for taxpayers and the economy. … They consistently unveiled programs that underperformed, did little to reduce mortgage debts owed by ordinary Americans and rejected a get-tough approach with banks." If you accept that "dramatic actions" were required, then it probably did not help when Edward DeMarco took over as (indefinite) acting head of the Federal Housing Finance Agency, the conservator for Fannie Mae and Freddie Mac. As the Post notes, DeMarco "spent much of his career at the Government Accountability Office and the Treasury Department, trying to rein in Fannie and Freddie. Now he had the chance to do it." A veteran of the administration, Lawrence Summers, writes in an op-ed in the Financial Times that the FHFA has followed a "disastrous[ly] procyclical policy" by focusing narrowly on saving pennies at Fannie and Freddie rather than on supporting the housing market. "The narrow financial interest of the GSEs depends on a national housing recovery," Summers writes. Some examples of the FHFA's penny-wise pound-foolishness he gives: Credit standards are overly tight "given that the odds of a further 35 per cent decline in house prices are much lower than they were at past bubble valuations," and "the GSEs have made refinancing very difficult by insisting on significant fees and requiring that any new refinancier take on all the liability for errors in underwriting the original mortgage." The Journal's "Heard on the Street" column makes a case against the Fed trying to juice the housing market with another program of mortgage-backed security purchases. Among other reasons, "high unemployment and overstretched consumer balance sheets have kept housing in the doldrums even with record low rates. And for many existing homeowners, fees and lending criteria, not interest rates, are the main refinancing issue" - see Summers, above. Riding to the rescue (maybe), "federal regulators on Monday plan to unveil a major overhaul of an under-used mortgage-refinance program," according to the lead story on the front page of the Journal. A retuning of the HARP program has been expected for months now.

Right now, the government is at risk for an increased share of the reduced amount of residential mortgages that are being produced. This is another damnable result of the recent crisis. No proposed remedy for it has attracted much support. I'll suggest alternatives.

Wells Fargo blames a printing error for mailing numerous customers statement details from other people.The error led to the names, account numbers and, in some cases, Social Security numbers of affected customers being added to the statements of strangers.

Two men were arrested Thursday for an alleged card-skimming scam. The suspects were arrested after bank employees noticed them using what looked like counterfeit cards to make withdrawals.

As Occupy Wall Street gains national attention bashing bankers, it's giving a free ride to the 'Other 99%' who enjoy the perks of a nation living beyond its means.

Breaking News This Morning ...Earnings: SunTrust, General Electric, MGIC

Was the Fed trying to convince itself foreclosure isn’t that bad? Would they roll out the pie charts and PowerPoint presentations to convince the rest of the financial community, Congress and the like, that homeowners don’t have to fear deterioration of lifestyle, maybe just a bit of downsizing?

Apple's latest iPhone comes with a virtual personal assistant, Siri, that responds to spoken commands to write emails, text messages, place phone calls and more. But by default, it does not shut off when the phone is locked, making it possible for an unauthorized user to access sensitive information.

Groups similar to Occupy Wall Street have sprouted up in cities across the country like crab grass in August. Now into their second month of protests, these young Americans are objecting to bank bailouts, foreclosures, millionaires, and even capitalism.

Security experts typically advise using Apple computers for sensitive tasks, such as online banking, because there are fewer viruses targeting the platform. But a new bug tears down one of Apple's major defenses.