Jim Cramer's Stop Trading! IndyMac Yellow Flag

Cramer says there's a big black box around low-documentation loans.

Author:: TheStreet.com Staff
Publish date:: Apr 2, 2007 2:55 PM EDT

Cramer says there's a big black box around low-documentation loans.

Beware the pricey regional bank group, Jim Cramer said Monday on

CNBC's

"Stop Trading!" segment.

Cramer said banks such as

PNC

(PNC) - Get Report

are trading at premium to big names such as

Citi

and

Bank of America

(BAC) - Get Report

in spite of the regionals' significant exposure to possible lending issues. Cramer said he believes lots of regionals have problems similar to the one

revealed late Friday by

M&T

(MTB) - Get Report

Cramer is also "concerned" about the so-called Alt-A lenders, the companies that made loans to homebuyers with better-than-subprime credit ratings but without full documentation. He said the degree to which loans were made without documentation is a "big black box" that keeps investors from knowing "who a good lender is." He conceded that some companies like

IndyMac

( NDE) are "seasoned players" who should know better than to chase nonpaying customers, but he stressed that lenders need to "open things up kimonowise" for shareholders to judge for themselves.

Cramer, stipulating that he "loves"

Countrywide

( CFC) chief Angelo Mozilo, suggested Mozilo cut back on the TV appearances, reasoning that Countrywide stock gets hit every time Mozilo is on.

At the time of publication, Cramer had no position in stocks mentioned.

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