‘Ninja Nightmare’ for U.S. Homes May Cause Double-Dip, BNP Says

U.S. banks embroiled in an investigation into faulty home foreclosures may be forced to scale back lending, pushing the economy back into recession, according to BNP Paribas SA.

The probe into lending practices is fueling speculation of even greater losses if mortgage-bond investors challenge the underlying debt and force banks to buy them back. Ensuring the right documents accompanied a loan through the securitization process wasn’t a priority during the real-estate boom, according to London-based BNP analysts Mehernosh Engineer and Olivia Frieser in a report titled “Ninja Nightmare.”