Financial Crisis Monitor

American Home Mortgage is singing the blues today but their issues are not clear at this time. Mortgage Blues reports that American Home Mortgage is not involved in the subprime market. To survive, American Home needs the secondary credit markets to stabilize, so the company can re-sell its loans for a profit. [...]

GMAC today reported that second-quarter net income fell to $293 million from $787 million a year earlier. Its mortgage unit, Residential Capital LLC, had a loss of $254 million, compared with a profit of $548 million a year earlier, because of loans to buyers with poor credit ratings.
Eric Feldstein, GMAC’s chief executive, said the company [...]

Mortgage brokers have no obligation to get their customers the best deal. Actually, mortgage brokers have an incentive to push customers toward a mortgage with an unnecessarily high rate. That’s because the bank’s payment to the mortgage broker, called a yield spread premium, compensates the broker for the spread between the lowest rate at [...]

For those inspired by television shows like Flip That House and Property Ladder, where regular people like you and I by a house to make a profit, there are warning signs. Not so much with the Property Ladder show, but more so with the others, please be aware that those people have investors looking [...]

IKB Deutsche Industriebank AG, a German lender that invested in U.S. subprime mortgages, said its profit will be “significantly” lower than forecast as fallout from the deteriorating North American home-loan market spreads.
“IKB is no longer in a position to maintain its earnings forecast of 280 million euros ($382 million),” the Dusseldorf- based bank said [...]