Mortgages

Citi’s Northern Rock wager has political spice

2 April 2019

The U.S. bank bought 5 bln pounds of mortgages made by the lender which failed in 2008 from the UK government. The state cuts its debt load, and the buyer gets stable high-yielding assets. The risk is that a left-wing executive takes power, and forces lenders to cut rates.

Americans want new homes, just not these ones

21 February 2019

U.S. existing-home sales fell in January to a three-year low, the National Association of Realtors said on Thursday. More unsold homes and a dip in mortgage rates ought to help the market. But the dearth of starter homes means what’s available is increasingly out of reach.

Viewsroom: Down Under’s upheaval

14 February 2019

Falling house prices and slowing Chinese growth are putting Australia’s record of almost 28 years of economic expansion at risk. The banking industry got dinged after a gripping year-long investigation. And a change of government looks likely. Breakingviews dives into the issues.

U.S. mortgage fix is hostage to 2020 election

14 February 2019

Trump officials have hinted they may bypass Congress to overhaul Fannie Mae and Freddie Mac. The giant housing-finance firms’ proposed new overseer is certainly no fan. Reform is long overdue. But messing with Americans’ mortgages as a presidential vote looms is risky.

U.S. housing poses headwind for economy

9 November 2018

Online real-estate firm Zillow lowered its outlook, tanking its shares, while DIY chain Lowe’s is shuttering stores. Meanwhile mortgage applications have dropped as loan rates hit a nine-year high. If home buying continues to slow, the effects will be felt more widely.

Review: How banks helped cause the housing crisis

2 November 2018

Why are homes so unaffordable in big Western cities? Josh Ryan-Collins blames decades of excessive mortgage lending rather than paltry building rates or planning rules. That’s depressing for millennials: the logical fixes are a much harder sell than just building more houses.

Spanish bank tax hit not as scary as it looks

19 October 2018

Shares in Spanish lenders dropped sharply after a court ruled banks may have to refund mortgage taxes. That could mean a collective hit to earnings of up to 1.5 bln euros, based on the last four years of new loans. With lending rates set to rise, that’s painful but manageable.

Monzo traces faint path to digital-banking profit

16 October 2018

The UK startup won a million customers with next-to-no marketing, but keeps most funds at the central bank. CEO Tom Blomfield hopes to make money by selling other companies’ products, like insurance or mortgages, in return for a small fee. The numbers at least work on paper.

Time breathes life into America’s mortgage zombies

5 September 2018

It’s 10 years since Washington took over Fannie Mae and Freddie Mac, injecting $187 bln to render them undead. Reforms have not touched the supposedly temporary fix. A functioning home-loan market, revenue for the Treasury and inertia suggest taxpayers may be stuck with them.

Rising U.S. non-bank mortgage risk recalls crisis

25 July 2018

As the likes of Citigroup have cut lending specialists have stepped in, but they lack bank-like capital cushions. Government-owned Ginnie Mae, guarantor of $2 trln in mortgage-backed paper, is exposed. It’s a reminder that swaths of the home-loan market escaped post-2008 reform.

Nordea’s bumper payout can weather top-line squall

19 July 2018

Scaling back lending to shipping and Russia dragged down the Nordic bank’s revenue and knocked 9 percent off its underlying pre-tax profit in the first half. However, a comfortable capital ratio of 19.9 percent should ensure the lender’s 8 percent dividend yield is safe.

IndyMac bank collapse still resonates in Trump era

11 July 2018

Treasury Secretary Steven Mnuchin made a boatload from buying the defunct $32 bln mortgage lender, which failed a decade ago this week. With the White House backing deregulation for smaller banks, IndyMac’s downfall and the ensuing mess offer a stark warning against overdoing it.

Barclays’ new vigour tempers calls for shake-up

26 April 2018

The UK bank earned an 11 pct return on equity in the first quarter, excluding 2 bln pounds of fines and charges. A revived investment bank vindicates CEO Jes Staley’s faith in the business. His next challenge is to re-stock capital buffers to clear the way for higher dividends.

Nordea is safer on edge of Swedish property frenzy

25 April 2018

Aggressive new entrants have taken a chunk out of the Swedish bank’s mortgage share with hyper-low rates. Nordea and big domestic peers will feel tempted to join in to protect market share. That would be a bad idea – even if Swedish property values weren’t already falling.

Intesa offers partial hope for Italy’s dud loans

17 April 2018

The Italian lender is nearing a deal with Swedish group Intrum to shed 10.8 bln euros of dodgy loans from its balance sheet. Domestic peers will be cheered by the price, which is higher than rivals have attained in similar transactions. Then again, Intesa is a better bank.

Barclays settlement fixes one of several headaches

29 March 2018

The UK lender is paying $2 billion to settle U.S. regulators’ claims of mortgage securities mis-selling. That’s less than peers paid and removes some uncertainty. But the outcome of a UK investigation is still pending and CEO Jes Staley has yet to turn the investment bank around.

Facebook leads Silicon Valley to its Minsky moment

21 March 2018

The social network feasted on burgeoning data and devices, just as banks gorged on easy money before the crisis. Society’s focus on benefits over risk gave tech companies free rein – until the resulting abuses couldn’t be overlooked. As user trust evaporates, regulation beckons.

Intesa can afford to speed bad debt cleanup

11 January 2018

Italy’s biggest retail bank may sell up to 15 bln euros of sour loans. It looks like a reversal of boss Carlo Messina’s plan to keep bad debts rather than sell them cheaply. But Intesa can take the hit and, with regulators bearing down on dud assets, a quick exit makes sense.

Hudson’s Bay buildings are its real luxury goods

24 October 2017

The C$2.2 bln department-store owner is selling Lord & Taylor's New York building for $850 mln to WeWork. It may not satisfy activist Jonathan Litt, who's waging a proxy fight for bolder steps. But with retail in retreat, the firm is conceding it needs to monetize its property.

FirstRand makes punt on post-Brexit housing market

16 October 2017

The South African bank has offered 1.1 billion pounds for Britain’s Aldermore. Shares in the mortgage lender had slipped amid concerns about the slowing property market. At 8 times expected 2018 earnings, FirstRand could be getting a bargain – provided bad loans don’t shoot up.