SOURCE: The Bedford Report

The Bedford Report

October 22, 2010 12:25 ET

Banks' Profits at Risk Due to Faulty Foreclosure Documentation

The Bedford Report Provides Analyst Research on Wells Fargo & Citigroup

NEW YORK, NY--(Marketwire - October 22, 2010) - Major Bank stocks struggled last week as investors became concerned that the mortgage foreclosure crisis could hinder the banks' earnings. Legal experts and analysts alike argued that the recent discovery of flawed documentation being used in foreclosure proceedings could force banks to buy back bad loans at their face value -- which is usually substantially above their market value -- implying there could be massive losses. The majority of the banks in question have dismissed these concerns, and it appears as though the banking industry's better-than-expected earnings being posted this quarter are calming investors' nerves. The Bedford Report examines the outlook for companies in the Major Banks Industry and provides research reports on Wells Fargo & Co. (NYSE: WFC) and Citigroup, Inc. (NYSE: C). Access to the full company reports can be found at:

After allegations that thousands of home foreclosures were improperly documented, US government officials launched probes this last month into the banking industry's foreclosure practices. Following the accusations, Major Banks such as JPMorgan and Bank of America temporarily halted foreclosures. Citigroup did not follow in the footsteps of its peers claiming that its document review process is sound. On Monday Citigroup posted a third quarter profit of $0.07 per share versus a loss of $0.27 last year.

The Bedford Report releases regular market updates on the Major Banking Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us for free at and get exclusive access to our numerous analyst reports and industry newsletters.

Wells Fargo has been under scrutiny the last week after a report from Reuters said a Wells Fargo employee had failed to review foreclosure documents before signing them -- yet another example of a report suggesting that banks failed to follow legal procedures to foreclose on homes. According to estimates, Wells Fargo has one of the highest exposures to the housing markets of all the major banks.

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