Don’t believe everything you are told is the moral of the Chicken Little fable.
Bank stock prices start to react to the realization. Unlike Chicken Little, Oppenheim Law was right!
So why is Congress allowing the banks to do their own internal investigation?
“Isn’t that allowing the fox to watch the hen house?” asks Roy Oppenheim, legal blogger and Florida real estate attorney specializing in foreclosure defense. “In my last workshop about toxic foreclosures, we discussed the ramifications this would have on the bigger picture for the banks, casting doubt and speculation from the investment community.”
Today’s Wall Street Journal headlines might feel like the sky is falling in the real estate world. Mortgage Damage Spreads is the headline talking about how the unfolding foreclosure-processing debacle is causing bank stocks to slide and putting millions of delinquent borrowers in limbo.
Banks stocks were hammered on Friday for the second straight day as investors continued gauging the sector’s exposure to higher operating and legal costs.
Bank of America Corp. shares lost nearly 5%. Shares of Wells Fargo & Co. also fell nearly 5%, while J.P. Morgan Chase & Co. fell 4% and Citigroup Inc. lost nearly 3%. And the cost of protecting against the default of bank bonds continued to surge.
Whether its CNBC commentators, CBS reports or Citibank analysts, the writing on the wall is getting clearer by the day: the foreclosure fraud crisis will have a disruptive impact on various aspects of the economy.