by Calculated Risk on 10/23/2011 05:30:00 PM

• On Tuesday, the S&P/Case-Shiller House Price Index for August will be released (really a 3 month average of June, July and August). The consensus is for prices to increase 0.2% in August. Here is Zillow's forecast of Case-Shiller:

• Case-Shiller 20-City Composite index
... Not-seasonally adjusted: -3.7% year-over-year, -0.1% month-over-month
... Seasonally adjusted: -3.8% year-over-year, -0.3% month-over-month

• Case-Shiller 10-City Composite index
... Not-seasonally adjusted: -3.4% year-over-year, +0.2% month-over-month
... Seasonally adjusted: -3.5% year-over-year, -0.2% month-over-month

Because of seasonally distortions related to foreclosures, S&P reports the NSA numbers. But even with those distortions, I track the SA numbers - and those will probably show a month-over-month decline in August.

• The FHFA is expected to release changes to the HARP refinance plan this week. From Reuters: U.S. readies stronger lifeline for homeowners

Homeowners who owe more than their houses are worth will get new help to refinance in a government plan to be unveiled as early as Monday to support the battered housing sector ... the Federal Housing Finance Agency, intends to loosen the terms of the two-year-old Home Affordable Refinance Program, which helps borrowers who have been making mortgage payments on time but who have not been able to refinance as their home values have dropped.

HARP is currently open to borrowers whose mortgages are owned or guaranteed by Fannie Mae or Freddie Mac as long as their loans do not exceed 125 percent of their homes' values.

The sources said FHFA will lift that threshold ... Another change may include the possibility of easing the fees tied to mortgages refinanced under HARP, according to the sources.

• And a rumor: Back in August, the FHFA, Treasury and HUD put out a request for input on the disposition of Fannie, Freddie and FHA REOs. The three entities own about 250,000 properties and approximately 800,000 homes backed by Fannie, Freddie and the FHA are in some stage of foreclosure. I've heard a rumor that an RTC like disposition program for Fannie/Freddie/FHA properties is in the works and might be announced in the next couple of weeks (this is a rumor only!). This would probably involve selling REOs in bulk to investors and include some sort of plan to rent them to the current occupants.

Yesterday:
• Schedule for Week of Oct 23rd
• Summary for Week ending Oct 21st

by Calculated Risk on 10/23/2011 02:10:00 PM

From MarketWatch: Final agreement on package of measures expected Wednesday

“Today, we will not undertake any decisions, but will undertake preparatory work,” German Chancellor Angela Merkel told reporters Sunday in a joint news conference with French President Nicolas Sarkozy after a meeting of heads of state from all 27 European Union nations.

“A broad agreement is taking shape,” Sarkozy said, emphasizing that leaders aim to reach final agreement on a deal on Wednesday.

The fight over the EFSF is seen by economists as the most difficult issue. ... Merkel said European finance ministers on Saturday weighed two options for leveraging the EFSF, but that neither involved the ECB.

Yesterday:
• Schedule for Week of Oct 23rd
• Summary for Week ending Oct 21st

by Calculated Risk on 10/23/2011 08:44:00 AM

The final details will be released on Wednesday. This is just one part of the agreement (details on Greece and the EFSF also need to be worked out).

From the Financial Times: Banks must find €108bn in new capital

According to two people involved with the negotiations, the European Banking Authority’s final emergency stress test identified a total of €108bn to be raised by Europe’s banks ...
excerpt with permission

From the WSJ: Bank Recapitalizations May Reach €108 Billion

European governments likely will seal an agreement to set aside between €107 billion-€108 billion ($150.01 billion) to boost the cash reserves of banks weakened by their exposure to sovereign debt ... there would be no final agreement on the capital ratio and the size of the recapitalization until the full crisis package is worked out. The deadline for that is a European summit Wednesday.

Yesterday:
• Schedule for Week of Oct 23rd
• Summary for Week ending Oct 21st

by Calculated Risk on 10/22/2011 09:59:00 PM

Although there will probably be an announcement on Sunday, the deadline has been moved to Wednesday ... it is pretty clear that Greece bondholders will take a much larger haircut than the original 21%.

From the NY Times: European Finance Ministers Shaping Greek Rescue and Effort to Aid Banks

European finance ministers said on Saturday that they were near a deal to strengthen capital reserves for their troubled banks — the first part of a package of measures meant to stem the worsening European debt crisis.

... the ministers also said that holders of Greek bonds would have to take much bigger losses than the 21 percent originally agreed to in July, though ... no agreement was near on write-offs that could reach as high as 60 percent.

The ministers also reported that France and Germany had made progress on a third issue, how to increase the firepower of a rescue fund for the euro zone.

Alphaville at the Financial Times has excerpts from the grim report on Greece: Greek haircuts and Greek myths — the details

To get the debt down further would require a larger private sector contribution (for instance, to reduce debt below 110 percent of GDP by 2020 would require a face value reduction of at least 60 percent and/or more concessional official sector financing terms).

From the Telegraph: Europe's leaders threaten Greek default if banks won't take haircut and accept losses of £120bn

Europe's leaders are threatening to trigger a formal default on Greek debt and risk a “credit event” if banks refuse to accept losses of up to €140bn (£120bn) on their holdings.

Hardline eurozone members, backed by the International Monetary Fund (IMF), delivered the ultimatum this weekend ... Vittorio Grilli, a senior EU official, travelled to Rome yesterday to present the “take it or leave it” deal to the Institute of International Finance, which is leading the negotiations for the banks. “The only voluntary element for the banks now is to take a 50pc haircut or face a credit event, a default,” said an EU diplomat.

by Calculated Risk on 10/22/2011 06:42:00 PM

Note: this is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Oct 21, 2011. (table is sortable by assets, state, etc.)

Changes and comments from surferdude808:

With four removals and one addition, the Unofficial Problem Bank List finished the week at 976 institutions with assets of $401.9 billion. For comparative purposes, the list had 871 institutions with assets of $402.2 billion last year.

Failure was the cause for the four removals that include Community Banks of Colorado, Greenwood Village, CO ($1.4 billion); Old Harbor Bank, Clearwater, FL ($216 million Ticker: OHBK); Decatur First Bank, Decatur, GA ($192 million); and Community Capital Bank, Jonesboro, GA ($181 million).

The two failures in Georgia push that state's total to 73 at a cost of $9.3 billion since the on-set of the crisis in 2008. In all, the FDIC's Atlanta Region has seen 154 failures at a cost of $27.7 billion. Perhaps these figures would be lower if the supervision team in that region had taken seriously the many warnings it received long before the on-set of the crisis on the riskiness of the C&D lending exposures. As an aside, it is interesting how many of the involved principals still hold high level positions at the FDIC or have gone on to lucrative consulting jobs. As the OWS movement wants Wall Street executives held accountable for the economic dislocations they caused, how about a movement to hold the regulatory agency executives accountable for their failings that contributed to those dislocations.

The addition this week is Town Center Bank, Frankfort, IL ($130 million). Again, we applaud the disclosure of this action by the Illinois State Banking Department, which is the most transparent department among all of the states.

The OCC used to release its monthly enforcement action activity on the Friday subsequent to the 15th day of the month. However, the OCC has not released on that schedule the past two months. We guess the OCC will release some information next week.

Earlier:
• Schedule for Week of Oct 23rd
• Summary for Week ending Oct 21st