The Option Arm Triplets: Dead Banks Walking [View article]
How is it that FED stock has shot up 400% from its low of $3.99. The shorts must be getting out.
While no denying that FED has a lot of problem with non-performing loans and will take big write downs in book value, I think the bank will survive given that most of the loans were to people with high FICO scores and average loan to value of 70% at origination. Even accounting for 20 - 30% declines in home value from peak not everyone walks away from their home.
The Option Arm Triplets: Dead Banks Walking [View article]
While no denying that FED has a lot of problem with non-performing loans and will take big write downs in book value, I think the bank will survive given that most of the loans were to people with high FICO scores and average loan to value of 70% at origination. Even accounting for 20 - 30% declines in home value from peak not everyone walks away from their home.