The Mortgage Front

FDIC braces for more bank failures:

Shaky loan portfolios continue to darken the landscape for the nation's banks, as federal regulators prepare for the possibility of an uptick in failures of financial institutions, according to recent government reports.

A record-high $31.3 billion set aside by banks for loan losses, record trading losses and goodwill expenses dragged down fourth-quarter net incomes of insured banks to a 16-year low, according to the Federal Deposit Insurance Corp.'s quarterly banking profile released Tuesday. The cumulative increase to loan-loss provisions was the largest increase in 20 years.

Not good, especially coupled with more foreclosures on mortgages resetting to higher interest rates:

Bank seizures of U.S. homes almost doubled in January as property owners failed to make higher payments on adjustable-rate mortgages.

Repossessions rose 90 percent to 45,327 last month from the same period a year ago, according to RealtyTrac Inc., a seller of foreclosure statistics that has a database of more than 1 million properties. Total foreclosure filings, which include default and auction notices as well as bank seizures, increased 57 percent.

No wonder consumer confidence is the lowest in 14 years.

It's the economy (again), stupid.

The situation is critical, yet the Bush White House is threatening to veto the Senate home foreclosure bill. Funny, it doesn't have a problem with corporate bailouts or squandering hundreds of billions of dollars in Iraq like a junkie on meth, yet balks at spending a mere $4 billion to buoy the economy and help homeowners out of their crappy loans.

As the Bush White House once again finds its inner cheapskate when it comes to helping the working class, some states aren't waiting to limit the economic fallout. Yet, Dear Leader says don't panic, it's not a recession, just a "slowdown".

Meanwhile, Countrywide -- which laid off 11,000 employees and agreed to sell itself to B of A for the basement price of $4.1 billion because of the mortgage crisis -- says let them eat caviar and $105 Kobe steaks.

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