Lenders Still Not Safe Investments
Reuters is reporting that lenders are increasingly having problems obtaining credit with which to purchase and issue further mortgage loans. Finding themselves unable to payoff mortgage debt, many financial firms are making grim predictions for the future of such lenders.
In Reuter’s report on the downgraded status of many lenders they write:
Merrill Lynch, meanwhile, downgraded Bear Stearns Citigroup Inc and Lehman Brothers Holdings to “neutral” from “buy” on Tuesday and lowered estimates for the banks’ earnings, due to credit and mortgage market troubles.
“The only thing that is certain is that more uncertainties in the direction of asset prices and volatility are on their way,” Bank Julius Baer said in a report.
Stating that things are bad and likely to get worse certainly seems like a safe bet to us. A statement that perhaps, should not have taken quite so long to be made. As investors are finding, having anything invested in mortgage lenders is a losing prospect at this current time.
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