OceanFirst Shuts Subprime Home Loan Unit, Top Officers LeaveBy Rick Green
May 17 (Bloomberg) -- OceanFirst Financial Corp., a New Jersey-based banking company, will shut its subprime mortgage business and said the unit's president resigned after defaults were hidden from top management.
The bank blamed loans it made to borrowers who weren't required to document their income, according to a presentation for investors included in a federal regulatory filing today. The mortgages covered as much as 100 percent of a property's value.
OceanFirst said some of the loans made in 2006 quickly soured, and unnamed officials at the Columbia Home Loans unit ``concealed'' the defaults until February 2007. New subprime loans were halted by the bank in March, and OceanFirst has taken $21.6 million in charges.
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Don't think for a minute that you've seen the last of this sort of thing. Here's my prognostication: Subprime will fade from our consciousness and then "WHAM" will be hit with 'surprise' news. Please don't be surprised.
2 comments:
There is one REIT that I know very well for a lot of reasons. It's excellent -- and its price is being pounded.
I haven't bought more.
I expect more pounding.
That's when I'll buy more.
But that's one of the results of this mess. This particular REIT is commercial. Anything with the letters RE is getting the black eye.
That said, I know, KNOW, there is going to be something big, black and awful coming down the pike.
I'm waiting. And no, I won't be surprised -- but I'll be buying this particular REIT and another one that I just discovered.
I think that REITS is an important place to understand the underlying fundamentals of what they do. Some of the pricing has gone way beyond the the fundamentals.
I have all of the REITS on a watch list. My guess is that Monday will have a little recovery in the REITS and then we'll see if they break the H&S pattern they've been forming.
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