Monday, July 13, 2009

HELOC / 2nd lien mod program ramping up

From Bloomberg:
U.S. banks are likely to begin signing contracts as soon as this month that would let second mortgages and other home-equity debt be reworked under a government-subsidized program, a Treasury official said.
Contracts may be signed this month or in early August, the official, who asked not to be identified discussing private talks, said in an e-mail yesterday. On April 28, when provisions for the expansion of President Barack Obama’s $75 billion “Home Affordable” plan were announced, officials said the second-lien program would be up and running in about a month.

Looks like the bank stocks will be under some stress again this fall:
“It is well understood that the four major banks would likely need an additional capital injection should they be forced to mark the second-lien mortgages on their balance sheets to a realistic value,” Greenwich Financial’s Frey said.

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