BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow...

BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? BankUnited Financial Corp (BKUNA) reported a 73 percent fall in fourth-quarter earnings, which was also significantly below analysts' estimate, as loan loss provision quadrupled and non-performing assets rose eight-fold. The bank holding company posted a profit of $6.4 million, or 17 cents a share for the quarter, compared with $24.2 million, or 63 cents a share, a year ago. Option-ARM balances totaled $7.6 billion. Option-ARMs are 70% of the residential loan portfolio and 60% of the total loan portfolio. Even ignoring the huge percentage of reduced doc loans, Stated income and no doc loans are 51% of the residential portfolio. Full doc loans are a mere 18% of the portfolio. $7.6 billion of their portfolio was in option arms. $6.5 Billion of that $7.6 billion is now negatively amortizing. Their total residential loan portfolio is $10.1 billion. Let's do the math. 64% of their residential loan portfolio is negatively amortizing. Here's more math: 51% of their entire loan portfolio is negatively amortizing. People are clearly struggling to make payments. At the same time property values are falling dramatically. Unless there were re-appraisals (there weren't) the Loan to Value (LTVs) and the potential for losses are both way higher than reported. The growth in negative amortization was $48 million. Accounting rules being what they are, negative amortization is counted as ' The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

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2006-08-28Today's Thought of the Day starts with an idea...

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