Comments on: How to make mortgage relief work

By: klhoughton

klhoughton — Fri, 09 Sep 2011 13:45:51 +0000

Looking at the one-year stock comparison, WBS is basically unchanged, JPM is down about 12% and The Big C is down around 25-30%.

It’s even worse over the 2-year period, where WBS is up nearly 40%.

(I started to add BAC into the mix, but the chart became unreadable at the 2-year level. But we’re talking about Major Financial Institutions, not Mismanaged Zombies that make The Big C appear reasonable.)

By: y2kurtus

y2kurtus — Fri, 09 Sep 2011 02:40:14 +0000

Felix,

I will point out that everything you commend Webster bank for is essentially fixing a previous mistake they have made.

In your post you praise Webster bank for:
-writing off missed interest payments
-writing off late payment fees
-incentivising workers to modify underperforming loans

Every one of those consumer friendly actions hurt the financial stability of the bank… makes me wonder how their stock is doing…

Humm… surprise surprise… their stock (WBS) is down 33% since Feb of this year. It is down 66% since Feb 2007. While they have done better than the worst run megabanks Citi and BofA they have underperformed megabanks WFC and JPM.

It looks like they took 400,000,000 in TARP money.
They saw fit to pay their presumedly dynastically wealthy CEO, who’s father, as you pointed out founded the bank, 2.7 million dollars in 2010 while the bank made a profit of less than 50 million.

In summary Felix let me say boldly that both your credit union and my mutual savings run circles around Webster.

By: dWj

dWj — Thu, 08 Sep 2011 18:12:08 +0000

Perhaps the big banks should be encouraged to sell nonperforming to small banks. This would require a number of preliminaries, probably one of which would be to provide regulatory relief from having to immediately write down a loss against regulatory capital. If the small bank could realize more value (by making the loan perform in some modified form) than the large bank, in principle it is in the large bank’s long-term economic interest to sell the loan; the practical, short-term barriers would need to be overcome.

By: RZ0

RZ0 — Thu, 08 Sep 2011 16:23:55 +0000

Mama always told me that if banks sold anything but money, they’d go broke.
She was wrong. They go broke selling money, too.

By: petertemplar

petertemplar — Thu, 08 Sep 2011 16:22:36 +0000

It’s crazy. We tried to refinance with HARP.

GMAC said OK. But the closing costs were exorbitant and they told us the owner of our second mortgage (GreenTree) never subordinates.

So what’s the point of having the program if the banks don’t cooperate.

What motivation does a bank have to help a non-risk customer like myself. None.