Mortgage Crisis, Mortgage | featured news

Proposed rules sparked by the financial industry meltdown could have the effect of shutting many lower-income buyers out of the mortgage market, critics say.

A discarded laptop found in the garbage has turned out to be a treasure trove of new information about the only lawsuit the SEC has brought over Wall Street’s mortgage debacle.

Bank of America Corp is working to improve profits by reducing its number of problem mortgages and cutting other costs, Chief Executive Brian Moynihan told shareholders on Wednesday. Moynihan, speaking at the company's annual meeting in downtown Charlotte, said the mortgage business of the largest U.S. bank by assets is "still struggling mightily" as it slowly crawls out from under the billions in soured home loans.

That figure, projected through 2013, represents a worst-case scenario that assumes a double-dip recession, the Federal Housing Finance Agency says. The finance giants have so far received about $148 billion in taxpayer funds.

Lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis.

The New York attorney general has launched an investigation into eight banks to determine whether they misled ratings agencies about mortgage securities, according to a person familiar with the investigation.

Many critics of the Obama administration's mortgage loan-modification program say it won't work because it doesn't do enough to address "negative equity," the plight of people who owe more on their home loans than the current value of those properties. Without equity in their homes, these critics say, borrowers have little incentive to keep paying and are apt to walk away as soon as things get tough, if not before.

Daverena White took a chance on the American dream of homeownership -- and lost big.

Two former Bear Stearns hedge-fund managers have been acquitted of lying to investors about the implosion of the subprime mortgage market.

Frustrated by the banks' inability or unwillingness to stop an avalanche of foreclosures, the states are considering lawsuits over the creation and marketing of millions of bad loans as well as the dismal pace of mortgage modifications.

Such cases would have been impossible until recently, because federal regulators had exclusive oversight of national banks. But a 5-to-4 Supreme Court decision in June allowed the states to exercise their own supervision, giving them significant leverage.