The Banking (NYSE: BAC) (NYSE:WFC) Week (NYSE:PNC) in (NYSE: C) (NYSE:USB) America

LIVERPOOL - Major banks report earnings next week. The banks have been beaten to a pulp as of late as investors look for information regarding the foreclosure scandal. Investors will be clued in to conference calls from BAC, WFC, C, USB, PNC. All these stocks were brutally punished last week (except USB) but clarity will be given this week. Investors often enjoy selling the news when there is negative sentiment no matter what it is, and this may happen also next week.

Most of the banks are nearing their 52 week lows, including BAC which hit a fresh 52 week low of $11.75 on Friday. The current market capitalization of BAC is now equivalent to that of more troubled Citigroup. In fact larger J.P Morgan only has a $30 billion premium to that of Citigroup despite not facing many of the problems that have plagued Citi.

A Week You Can Bank On (NYSE: BAC) (NYSE: WFC) (NYSE: PNC) (NYSE: C) (NYSE: USB)

LIVERPOOL - Major banks report earnings next week. The banks have been beaten to a pulp as of late as investors look for information regarding the foreclosure scandal. Investors will be clued in to conference calls from BAC, WFC, C, USB, PNC.

All these stocks were brutally punished last week (except USB) but clarity will be given this week.

The banks stocks could sell off further on the news.

Banking (NYSE:BAC) on (NYSE:WFC) America's (NYSE: C) (NYSE:JPM) (NYSE:PNC) (NYSE:USB) (NYSE:BBT) Weak Stomach

Stocks of the largest financial institutions at midday. Wells Fargo is down 3%, JPM 3%, BAC 4.7%, C 2% PNC 1% USB is up .7% and BBT is down 0.83%. The banks are being sold off on "Robogate" which is a foreclosure scandal that could hit many of the nations lenders.

The scandal involves foreclosures on houses by the banks without the necessary documentation and the foreclosure of houses using robo-signers which is when workers involved in forclosures indicate the documentation is present when it is not. This has caused an investigation into whether the banks have violated the law in certain states.

J.P. Morgan is currently reviewing about 115,000 mortgages that are in the foreclosure process and is expanding the temporary moratorium to 41 states.

To give investors a hint on why the current declines in the banking stocks are absurd. Is that the current number of J.P Morgan houses under review where to triple to 345,000 and we use an average home value of 300,000 and we write off all J.P. Morgan's loans on these homes to zero you get a charge of 10 billion. Not only will JPM likely not have to write off any of these loans, it is also likely they will face a very small legal charges.

J.P. Morgan's market cap has already declined by more than our most absurd scenario. This usually gives a hint into that the big fund managers and the people selling the stock have no idea what they are doing.

PNC (NYSE:PNC) Wells Fargo (NYSE:WFC) Citigroup (NYSE:C) J.P. Morgan (NYSE:JPM) Bank of America (NYSE:BAC) U.S Bancorp (NYSE:USB) Face "Robogate"

Stocks of the largest financial institutions were off as the markets open. Wells Fargo was down 4%, JPM 3%, BAC 4%, C 3.2% PNC 2.1% and USB is down 1.7%. The banks are being sold off on "Robogate" which is a foreclosure scandal that could hit many of the nations lenders.

The scandal involves foreclosures on houses by the banks without the necessary documentation and the foreclosure of houses using robo-signers which is when workers involved in forclosures indicate the documentation is present when it is not. This has caused an investigation into whether the banks have violated the law in certain states. Banks are known to be more at risk in the "so-called judicial states." The Judicial States make it mandatory for a lender to go to court before it can foreclose on a loan. In non-judicial states, banks aren’t required to submit anything to the court until they are sued by a homeowner seeking to stop a foreclosure. The problem can be two-fold for the banks. The first one being that they may have violated the law in certain states and the second one being they do not have the necessary documentation required for future foreclosures.

Some of the banks are having trouble of identifying the owner of the actual mortgages. This was caused by the securitization of the mortgages industry which also led to the financial crisis in 2008. The securatization is the repackaging of mortgages into smaller pieces and then selling them like bonds or stocks to investors. The issue would be if banks have submitted forged documents in order to get the foreclosure processed and if the banks have the documents necessary to foreclose on future loans. All of these problems are rectified if the banks prove they own the mortgage.

One would hope that a bank which primary business is usually mortgages would keep appropriate documentation to prove that they own their most important asset. If the banks do not have this documentation who is the customer and who is the bank?