Allstate Asked by SEC Why Mortgage Holdings Weren’t Marked Down

Allstate Asked by SEC Why Mortgage Holdings Weren’t Marked Down

By Andrew Frye – Jan 27, 2011 6:34 PM CT

    Allstate Corp., the insurer suing Bank of America Corp. for selling faulty mortgages, was asked by its regulator last year why the company hadn’t taken losses on some of its worst-performing investments in the property market.

    “Please expand your disclosures to support your assessment” that more than $1 billion of paper losses will reverse on Allstate’s securities backed by subprime and Alt-A mortgages, the U.S. Securities and Exchange Commission said in an April 21 letter that was released today.

    Allstate has reported improved investment results since 2008, when writedowns helped push the Northbrook, Illinois-based insurer to an annual loss of $1.68 billion. The company owned $8.5 billion of residential mortgage-backed securities at the end of September.

    Allstate, the biggest publicly traded U.S. car and home insurer, told the SEC in an Oct. 28 letter that it added more information to its quarterly filing about valuing securities. The SEC said in a Dec. 13 letter that it completed the review and had “no further comments at this time.”

    Maryellen Thielen, a spokeswoman for Allstate, had no immediate comment.

    Allstate said in its December complaint against Bank of America and the lender’s Countrywide subsidiary that it was duped into buying $700 million of securities made from loans that were “highly likely to default.” Investors are seeking refunds from Charlotte, North Carolina-based Bank of America and other lenders as home owners fail to meet payments. Banks have been accused of lending against overstated property values and inflated borrowers’ incomes.

    Bill Halldin, a spokesman for Bank of America, said in December that a review of Allstate’s complaint was under way. It appeared “to be a situation where a sophisticated investor is looking for someone to blame” for losses, he said.

    To contact the reporter on this story: Andrew Frye in New York at

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    3. Question-anyone?

      Florida bank, Vision Bank shows 32.43% nonperforming loans/assets. Publicly held company, FDIC backed bank, and received TARP funds. (sources state 2nd highest noperforming loans of any bannk in FL)

      Keep in mind this is a small bank, about an $800 million bank.

      Earnings show 11,277 nonperforming loans but ZERO renegotiated loans.

      Financial Highlights
      Three months ended December 31, 2010, September 30, 2010, and December 31, 2009

      3rd 1quter shows 11, 277 non performing loans, with ZERO renogotated loans in the 3rd and 4th quater, and they own $35 million in repossed property.

      ??? IS THE FDIC LETTING THESE BANKS become real estate investors and hold real estate?

      ???The other interesting thing, researching the foreclosed REO property for Vision Bank, they have tthe properties for sale for top market dollar, some properties, it is alleged that they will never sell for that price, so why hold them.

      ???latest game of Vision bank is get a judgmetn on the NOTE and not foreclose the loan, they seem to have enough property and don;t want more…one attorney said file a Summary Judgement against yourself to force the bank to allow the sell and lower a judgment??
      Click on latest earnings and then open document

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