Word: loaning
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Dates: during 2000-2009
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...number of public forums the COP is hosting on different segments of the lending market. Warren is often criticized for being too critical of banks and their lending practices. But at the hearing on commercial real estate, Warren focused on how big a problem future loan defaults will be and what should be done about them...
...government's recent bank stress test, examiners predicted that commercial real estate loan losses for the 19 largest banks in the nation would be far less than the value of home loans that go unpaid in the next two years - $53 billion vs. $185 billion. But Warren said she thought the two-year horizon of the government stress test may have understated the size of the banks' commercial real estate problem. The government assumed different default rates for each of the 19 banks for commercial real estate and other types of loans. Warren said the government had not given much...
Kevin Pearson, executive vice president of M&T Bank, said he thinks banks will be able to avoid many of those loan losses through loan modifications or "through blocking and tackling," as he put it. Parkus, though, said that outlook was too positive. He countered that banks will have a very tough time refinancing the poor loans they made at the height of the credit bubble. "There are very large losses embedded in the system," he said...
...greater threat to investors springs from the fact that Wells Fargo's loan losses could exceed the government's expectations. In calculating the stress tests, government bank examiners applied different loan-loss rates for different banks. For instance, bank examiners were relatively tough on Wells' primary mortgage-loan portfolio, predicting that nearly 12% of the loans would default over the next two years. This compares to an estimated loss for Citigroup of just 8% for its primary mortgage loans. That makes sense. More of Wells' mortgage loans are concentrated in California than Citigroup. And California has had more foreclosures than...
...commercial real estate loans, it was just the opposite, as bank examiners were particularly easy on Wells Fargo. The government estimated that even if the economy turns worse, slightly less than 6% of Wells' commercial real estate loans would default this year and next, which was much less than the industry average expected loss of as much as 12%. Some economists think it will be even worse than the government thinks. New York University economist Nouriel Roubini estimates that as much as 17% of commercial real estate loans could eventually go unpaid. Regulators wouldn't say why the government predicted...