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The foreclosure document fiasco has already caused a major headache for U.S. banks — and that headache may soon escalate into a migraine.

But the additional pain isn’t coming from the Obama administration or state attorneys general, both of whom have stepped up pressure on the banks. Nor is it coming from individuals who allege their homes were wrongly foreclosed on.

It’s coming from institutional investors who bought home loans that had been bundled together by banks and then sold off as Residential Mortgage Backed Securities, or RMBS.

These investors thought they were buying solid investments. But the recent robo-signing debacle shed light on document problems in foreclosures, revealing problems with the underlying paperwork and quality of the loans.

So, investors are trying to force banks to repurchase the securities. That would leave banks exposed to billions of dollars in potential losses if plaintiffs are able to force repurchases based on the errors.

Of course, repurchase requests aren’t new. Banks have been receiving them for years. But they could be facing an onslaught now.

"It’s really going to be up to the courts to decide on this one … Certainly investors will try to use this to avoid losses," said Joseph Mason, a professor at Louisiana State University, who studies legal risk in finance and banking.

Earlier this week, the New York Fed, along with investor firms BlackRock and the Pacific Investment Management Company, sent a letter to Bank of America (BAC, Fortune 500) alleging that its subsidiary, Countrywide, has failed to properly service loans totaling $47 billion.

The letter doesn’t amount to legal action, but it does put BofA on notice that litigation may be down the road.

Bank of America is among the most exposed of all the banks due to the sheer scale of its business. It sold a staggering $1.2 trillion in loans Fannie Mae and Freddie Mac between 2004 and 2008, and thus far has received repurchase requests on $18 billion of those loans.

But it says only $2.5 billion in losses have resulted from those requests.

"The risk is relatively sealed on this … the issue is how long the fight will take," Bank of America CFO Charles Noski said during the company’s third quarter earnings call.

Each bank has a different internal process, but in many cases losses are avoided by providing supplementary documents that prove the claim is invalid.

BofA estimates it is more than two-thirds through the wave of repurchase requests on loans made at the height of the mortgage free-or-all, and Moynihan has vowed to fight unjustified repurchase demands in order to protect shareholder interests.

"If you think about people who are going to come back saying I bought a Chevy Vega, but I want it to be a Mercedes with a 12 cylinder. We’re not putting up with that, and we will be very ardent to protect the shareholders interest," Bank of America CEO Brian Moynihan said during the earnings call.

But Bank of America’s outstanding repurchase claims have climbed in each of the last four quarters, reaching a peak of $12.9 billion in the third quarter of 2010.

Worries over the bank’s exposure have kept its stock under pressure, sending shares to a 52-week low on Thursday.

JP Morgan Chase (JPM, Fortune 500) reported paying out $1.5 billion in repurchases in the third quarter, an increase of $1 billion over last year. And the bank added $1 billion to its repurchase reserve in anticipation of an increase in requests. But that remains a relatively small figure compared to the bank’s $24.3 billion in third quarter revenue.

Not every bank is in the same position as Bank of America and Chase. Wells Fargo (WFC, Fortune 500), for one, insists that its exposure is relatively low.

"These issues have been somewhat overstated and to a certain extent, misrepresented in the marketplace," Wells Fargo CFO Howard Atkins said during the bank’s earnings call on Wednesday.

Executives on the call insisted the bank does not anticipate an increase in repurchase requests, and that the number of requests had fallen in the third quarter.

If repurchase requests were to spike, the bank says its $1.3 billion repurchase reserve liability is adequate.  

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Citigroup posted third-quarter earnings of $2.2 billion Monday, marking its third straight quarterly profit and beating Wall Street expectations, as the bank continued to trim its loan loss reserves thanks to improving credit trends.

Earnings for the banking giant came in at 7 cents per share, compared to a loss of 27 cents per share during the period a year ago.

Last month, Citigroup (C, Fortune 500) said Discover Financial Services (DFS, Fortune 500) was buying the troubled Student Loan Corporation business, in which Citi owns a big stake. Excluding charges from that sale, the New York-based bank earned $2.6 billion, or 8 cents per share.

Analysts polled by Thomson Reuters expected the company to earn 6 cents for the quarter.

The provision for credit losses, the funds set aside for the allowance of bad loans, was reduced to $5.9 billion, the lowest since the second quarter of 2007, prior to the onset of the financial crisis. That’s a decrease of 11% from the previous quarter and nearly 35% from a year ago.

And as loan losses, credit trends and delinquency statistics continue to improve, Citigroup chief financial officer John Gerspach said in a call with reporters that the bank will continue to release reserve funds.

The bank also continued to scale down its Citi Holdings division, which was created to house the firm’s so-called "troubled assets," including its student loan business.

Citi Holdings cut its assets by $44 billion, or 9% from the prior quarter, and those assets now represent just 21% of Citigroup’s total.

Meanwhile, Citicorp, which includes the bank’s consumer and investment banking business, boosted its profit by 43% from a year ago to $3.5 billion.

Investment banking revenue fell in the quarter, but a 7% spike in Citicorp Latin America revenue and a 1% uptick in Asia offset declines elsewhere and helped boost Citicorp’s sales by 7% compared to a year ago.

"Citi is in a better position than its rivals because it has been able to benefit from consumer banking growth in international markets," said Jeffery Harte, analyst at Sandler O’Neill & Partners. "Even though credit trends will continue to make headway in the United States, it will be difficult to generate that kind of growth domestically."

Citigroup has been focusing on restructuring the company into a smaller, more internationally-focused banking institution, and continues to be making progress in that direction.

"Our unique footprint and strong presence in emerging markets have us well aligned for growth trends we see globally, and we continue to make investments in our franchise so we can serve our clients at the highest level all over the world," said Citigroup CEO Vikram Pandit in a statement.

During a call with analysts, Pandit said that after policymakers hammer out details related to Wall Street reform legislation and international Basel III regulations in 2011, Citigroup will be ready to return excess capital to shareholders as early as 2012.

He said the bank will consider its options — reinstating a dividend or buying back shares — at the end of next year.

Citi is the second big bank in the past week to report better-than expected results. JPMorgan Chase (JPM, Fortune 500), which raked in $4.4 billion last quarter, reported last week.

The rest of the banking sector is slated to deliver results this week, including Bank of America (BAC, Fortune 500), Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500), and Wells Fargo (WFC, Fortune 500).

Shares of Citi were up about 3.3% in morning trading. But all big bank stocks have been hit hard on the past week due to concerns about the foreclosure scandal.

Gerspach maintained that Citi’s foreclosure process is "sound" and that the bank’s internal reviews "indicate nothing’s amiss." He added that Citi has no plans to halt foreclosures as its rivals have done as investigations take place.  

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The number of Americans filing for first-time unemployment benefits rose last week, according to a government report released Thursday.

There were 462,000 initial jobless claims filed in the week ended Oct. 9, up 13,000 from an upwardly revised 449,000 the previous week, according to the Labor Department’s weekly report.

Economists surveyed by Briefing.com were expecting 450,000 new claims.

The weekly figure has been stuck in a tight range since last November, hovering in the mid- to upper-400,000 range, and even ticking slightly above 500,000 in mid-August.

The 4-week moving average of initial claims — a number that tries to smooth out week-to-week volatility — was 459,000. This number is up 2,250 from the previous week.

While not a eye-popping number, Robert Dye, a senior economist at PNC Financial Services, says it is more evidence that the job market remains hobbled.

"Claims are going in the wrong direction again, but it’s a one week move after several weeks of improvements," he said. According to Dye, smoother sailing should be ahead as the last of the temporary workers hired by the Census work through the system.

Continuing claims: The government said 4.399 million people continued to file unemployment claims for their second week or more, during the week ended Oct. 2, the most recent data available. That’s down 112,000 from an upwardly revised 4.511 million the week before.

Economists were expecting 4.450 million people to file ongoing claims.

The 4-week moving average for ongoing claims fell by 34,500 to 4.488 million.

Continuing claims reflect people who file each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, or people who have exhausted their benefits but are still out of a job.

State-by-state: Jobless claims in two states declined by more than 1,000 in the week ended Oct. 2, which is the most recent state data available. Claims in California dropped the most, by 6,131. The state attributed the drop to fewer layoffs in the trade and service industries.

Claims jumped by more than 1,000 in three states. They rose the most in Pennsylvania, by 2,869, due to layoffs in layoffs in the rubber/plastics, food, construction, and service industries. 

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The Verizon iPhone rumors have been ongoing for years — but this time, the timing is perfect and has all the makings of the real deal.

Clear lines can be drawn between recent announcements, carefully worded statements and upcoming events that sketch out a road map for Apple (AAPL, Fortune 500) to start start selling its iPhone on Verizon Wireless early next year.

The rumor mill started spinning when the Wall Street Journal reported on Wednesday that a Verizon (VZ, Fortune 500) iPhone "would be released in the first quarter of 2011. The phone would resemble the iPhone 4 currently sold by AT&T, but would be based on an alternative wireless technology used by Verizon."

Verizon and Apple declined to comment, but here’s a look at the bread-crumb trail they’ve laid.

Clue 1: "Alternative wireless technology."

Most newspapers and blogs took that to mean CDMA, the wireless standard that Verizon currently uses for its cell network — as opposed to GSM, AT&T’s wireless standard.

But "alternative wireless technology" is more likely to mean Long Term Evolution (LTE), a new wireless technology that was unveiled in a not-so-coincidental Verizon announcement that also landed on Wednesday. LTE is a fourth-generation (4G) wireless network standard that Verizon says will be capable of broadband-like speeds, which are about 10 times faster than 3G speeds.

LTE makes a world of sense for the iPhone. Although Verizon’s CDMA network doesn’t allow consumers to make calls and surf the Web simultaneously on the iPhone — a feature that Apple has proudly advertised — users can do that on LTE. Also, unlike CDMA, LTE has also been embraced by wireless companies around the world as a new universal, global standard. That would make a 4G-LTE iPhone more cost-effective for Apple and easier to sell around the world.

And here’s the kicker: Verizon says its 4G network will still be able to deliver broadband-like speeds even when it’s taxed by millions of users sucking down data. That hasn’t been true of AT&T’s 3G network — especially not in New York City or San Francisco. Many predicted that when and if Verizon gets the iPhone, its network would face the same strains that AT&T’s (T, Fortune 500) has, but experts say that’s unlikely to happen with a 4G network in place.

"4G is the solution to 3G," said Tony Holcombe, CEO of mobile services company Syniverse. "It has the speed and the bandwidth to manage traffic demands."

Verizon’s new network is launching very soon. At this week’s CTIA Enterprise & Applications conference, Verizon announced that by the end of the year its 4G-LTE network will be available in 38 major cities, reaching 110 million Americans. The company plans to unveil a host of 4G tablets and 4G smartphones at January’s Consumer Electronics Show in Las Vegas.

Clue 2: 4G smartphones in January.

AT&T’s iPhone exclusivity contract was set to end in December 2011, according to court documents, but the Journal reported what many analysts had long believed: The terms have been renegotiated, and the exclusivity arrangement will expire at the end of this year.

That means the iPhone becomes a free agent in January. If that’s true, a 4G Verizon iPhone announcement at CES would be timed perfectly.

"Apple has traditionally shunned CES and typically announces its iPhones in the summer, but I can see it breaking with tradition to announce a 4G Verizon iPhone there," said Daniel Hays, partner at PRTM. "What better way to make a huge global splash by breaking the mold?"

That would also explain why the phone "would resemble the iPhone 4," as the Wall Street Journal reported. If it’s as simple as replacing the phone’s GSM chip with an LTE chip, Apple wouldn’t need to change anything else about the phone, and a launch of the "iPhone 4G" (or whatever it will be called) in the middle of the iPhone 4’s life span wouldn’t be too jarring.

"When I saw that Wall Street Journal story, the last dot had been put in place," said Ken Rehbehn, analyst at Yankee Group. "I think you’ll see an iPhone coming out on Verizon’s new network that’s being launched. LTE will give Apple sufficient bandwidth for compelling applications, especially around video."

Clue 3: Video apps!

If you’ve been in front of a TV in the past three months, you’ve almost certainly seen a commercial for the iPhone’s much-hyped video chatting tool called FaceTime. The problem with FaceTime is that it currently requires a Wi-Fi connection and doesn’t run over AT&T’s 3G network.

At the iPhone 4’s launch, Apple CEO Steve Jobs said FaceTime would be Wi-Fi-only in 2010, and that the company was working with the carriers to make FaceTime available over wireless networks in 2011.

Well, January is in 2011, and Verizon’s 4G-LTE network will be up and running by then. It’s certainly capable of handling an application like FaceTime.

Of course, nothing is ever quite that simple. Verizon doesn’t expect its 4G network to reach the same size as its current 3G-CDMA network until 2013. That means there will be some coverage gaps that will require the iPhone to access Verizon’s current, outdated network.

But Qualcomm — widely rumored to be working with Apple on its "Verizon-capable" iPhone — has the technology for dual-band chips. In areas where the 4G network is unavailable, phones could simply fall back to rely on the slower but almost ubiquitous 3G system.

After years of speculation, it seems the stars have finally aligned. We’re betting January 2011 is the right time for the iPhone to launch on Verizon.  

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Northwest Pipe Co.’s president has resigned and has been replaced by the company’s CEO, according to a Securities and Exchange Commission filing Friday.

Brian Dunham resigned as president and as a member of the board of directors of the Vancouver, Wash.-based company.

Dunham will be paid his base salary of $570,000 over the next 12 months.

CEO Richard A. Roman is now also president of Northwest Pipe (NASDAQ: NWPX).

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Smith Leonard PLLC, one of the Triad’s largest accounting and tax preparation firms, has been named one of America’s “2010 Best Accounting Firms to Work For” by Accounting Today magazine.

“Naturally, we’re gratified to be named in this listing,” Ken Smith, managing partner at Smith Leonard, said in a statement. “It’s a tribute to our entire team.”

Winners were chosen based on a two-part survey process no fax payday loans. First, Smith Leonard’s workplace policies, practices, philosophy, systems and demographics were examined. Second, employees shared their opinions in an employee experience survey.

An awards ceremony will be held on Nov. 17 at the Wynn Resort in Las Vegas. The list-making firms will also be published in the Dec. 13 edition of Accounting Today.

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Bidding for the vintage Custom House hit $2 million Friday afternoon with the bidder identified as chpdx220 reclaiming the top spot. The bid automatically extends the auction to 3 p.m. Monday.

The offer tops the $1.95 million bid Prem Group Cos. submitted Thursday.

Prem and chpdx220 appear to be the last standing in the auction. They are the only bidders since Sept. 22 and have traded the past nine offers. Prem, whose CFO Lance Inouye is bidding under the screen name linouye, kicked off the bidding with a $25,000 offer July 6.

Prem wants to turn the property into its new headquarters. The firm has leased office space in Old Town since 2002. With 90 employees, it is outgrowing its quarters and views the Custom House as a once-in-a-lifetime opportunity.

It remained unclear Friday afternoon what chpdx220 wants to do with the property. The bidder has been linked to a Portland development and investment firm, but its identity could not be confirmed.

The Government Services Administration put the Custom House at 220 N.W. Eighth Ave. for sale online on May 25 after previous redevelopment efforts failed. The suggested opening bid was $2.5 million. The government won’t sell it for less than its real market value, but will not disclose that figure while bidding remains open.

Constructed in 1901 on a former homestead, the Custom House occupies an 0.88-acre block that fronts Portland’s North Park Blocks. It is considered a prime redevelopment opportunity, but the aging building will require millions in renovations. In 1997, Sera Architects estimated the building needs $18 million to $24.3 million in repairs in 2009 dollars. Much of that is associated with reinforcing against earthquakes but the laundry list of projects covers everything from landscaping and building access to restoring old light wells, new mechanical systems and improving access for people with disabilities.

The Multnomah County Assessor’s Office values the Custom House at nearly $10.45 million, with $7.5 million of that associated with the building and $2.88 million connected to the land.

The GSA describes the property in the auction document as a “well-preserved exemplar of Second Renaissance Revival architecture.”

The building includes 78,838 square feet of office space and a basement. It is inside the Portland Development Commission’s Downtown Waterfront Urban Renewal Area. However, the urban renewal area has no ability to take on new debt, so the city’s economic development agency will not be able to offer financial support to the redevelopment at this time, a spokesman said.

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