FASB Rules Changes and My Mortgage

So, the Financial Accounting Standards Board (FASB) today changed the rules on bank accounting practices, specifically related to asset accounting.  Banks can now report asset values that are not in line with current market values – essentially, they can say that your $200k house you bought a year ago that now has a market price of $150k is still $200k on their balance sheet.  From the article:

The FASB issued new guidelines under the so-called mark-to-market accounting rules, which require companies to value assets at prices reflecting current market conditions. The changes, which apply to the second quarter that began this month, will allow the assets to be valued at what the banks project they might sell for in the future, rather than in the current, distressed environment.

I think, on the surface, that this is an OK idea.  Current market rate is probably a little bit different than the over time/prevailing market rate.  However, I’m gonna call my mortgage company tomorrow and ask about a refinance.. if they tell me that they won’t do that because I’m underwater on my house value, I’m going to wonder why it’s OK for the bank to take that view when I can’t argue the same for my own home’s value.

Wells Fargo corporate trips to Vegas

In the last few weeks, I’m really surprised to read this article

Wells Fargo, which has received approximately $25 billion dollars in federal funds, is “planning a series of corporate junkets to Las Vegas casinos this month” for some of the company’s “top mortgage officers”.  The best part of this is the explanation a Wells Fargo spokesperson gave, claiming that “recognition events are still part of [Wells Fargo’s] culture.” 

I think it’s apparent to pretty much anyone watching the financial meltdown that sending a bunch of execs to Vegas casinos is pretty much a part of their corporate culture.

update! they’ve called off the Vegas trip.  I doubt I had anything to do with it. 🙂