People are over-reacting to this. It's just that people didn't pay their mortgage, and they are double checking the mortgages. Was the forecolsure done fairly etc... I'd pin a number like 85% on those that people just weren't paying. Simple enough.
Potential mortgage loss already factor in via loss reserve. What the hell!! Old news to bring down the stock price? OCC investigate what they can. But, at the end of the day, if someone can not pay, they need to move out. Foreclosure is normal these days and the banks knew that 3 years ago. That is why they raised capital and beef up reserves.
True mortgagees are not paying, but open question whether cases in which BAC committed fraud and perjury will be dismissed, requiring BAC to start the whole process over. Even that would not solve the problem of previous foreclosure fraud.
Perjury and fraud are NOT just "document problems".
But let's say you don't buy into the populist rage of it all, and prefer to focus on the fact that these people didn't pay their bills and that's that. Fair enough. But there's plenty that should raise investors' eyebrows. FBR Capital Markets analyst Paul Miller said in a note to clients on Thursday that the cost of foreclosures could reach $10 billion. "We would note this is an earnings issue and not a capital problem, and although $6 billion-$10 billion is a large amount, we believe the industry could comfortably absorb these losses," Miller said.
- The Street
You obviously do not understand the basis of this latest foreclosure problem. They are losing money everyday they can not sell properties, they will have to account for the fraudulent paperwork and lawsuits to follow not to mention unending attack of the political system and who knows, the SEC as well. Mortgage back securities just a little problem as well. Besides that, every thing is ducky.