Featured Stories World News Commentary Money Watch Multimedia Prison Planet U.S. News Science And Technology

Wells Fargo Says It Doesn’t Have to Reserve Against Its Off-Balance Sheet Residential Exposure Because the FHA (Meaning the Taxpayers) Will Pay For It

  • Print The Alex Jones Channel Alex Jones Show podcast Prison Planet TV Infowars.com Twitter Alex Jones' Facebook Infowars store

George Washington’s Blog
Sunday, Nov 22, 2009

Chris Whalen has a must-read essay at Zero Hedge:

In the case of WFC [Wells Fargo], the bank has taken the position that NONE of its conforming residential exposures should be brought on balance sheet despite the FASB rule change. As we discussed in The Institutional Risk Analyst this week, “Why? Because the loans inside these securitization vehicles are insured by FHA, so goes the thinking of WFC and its auditor, thus the bank has no liability to these entities or the securities they have issued to investors. Pretty neat trick, eh?”

Thus WFC is basically saying that none of the bank’s $1.1 trillion in conforming OBS [off balance sheet] exposures need to be represented or reserved against.

A “conforming loan” is one that meets lending guidelines, including loan amounts as set by the government sponsored enterprises, such as Fannie as or Freddie.

As part of the 2008 stimulus bill, Congress temporarily increased the conforming amounts available through the FHA.

Bottom line: Wells Fargo is saying that since the FHA – that is, the government, that is, the taxpayers – will bail out Wells for loans that go bad, the giant bank doesn’t have to reserve against these possible losses.

Yes, Wells is as bad as the other too big to fails. See this, this, this and this.

This article was posted: Sunday, November 22, 2009 at 8:34 am

Infowars.com Videos:

Comment on this article

Comments are closed.

Watch the News

Eminem is a Complete Idiot See the rest on the Alex Jones YouTube channel.

Actor Fired For Being a Conservative See the rest on the Alex Jones YouTube channel.

https://www.youtube.com/embed/3jFJTZkMc40 https://www.youtube.com/embed/FtUOoho8BEA

© 2017 PrisonPlanet.com is a Free Speech Systems, LLC company. All rights reserved. Digital Millennium Copyright Act Notice.