Mortgage Blues Hit GMAC (ResCap) and Cerberus

GMAC today reported that second-quarter net income fell to $293 million from $787 million a year earlier. Its mortgage unit, Residential Capital LLC, had a loss of $254 million, compared with a profit of $548 million a year earlier, because of loans to buyers with poor credit ratings. Eric Feldstein, GMAC’s chief executive, said the …

Mortgage brokers may not get you the best deal

Mortgage brokers have no obligation to get their customers the best deal. Actually, mortgage brokers have an incentive to push customers toward a mortgage with an unnecessarily high rate. That’s because the bank’s payment to the mortgage broker, called a yield spread premium, compensates the broker for the spread between the lowest rate at which …

IKB Deutsche Industriebank, 40 Others Hurt By Subprime U.S.

IKB Deutsche Industriebank AG, a German lender that invested in U.S. subprime mortgages, said its profit will be “significantly” lower than forecast as fallout from the deteriorating North American home-loan market spreads. “IKB is no longer in a position to maintain its earnings forecast of 280 million euros ($382 million),” the Dusseldorf- based bank said …