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Afternoon News Round Up
- Fannie, Freddie to refinance for homeowners with 125% loan to value ratio. If this is not borderline criminal, nothing is.
- Move lifts current 105% limit to aid more borrowers struggling to make payments.
- GSEs to offer new 25 year mortgage for some refinances to accelerate debt payments. - Fed purchases USD 2.99bln Aug. 2019 - Feb 2026, Offer/Cover 3.17 vs. Prev. auction of similar maturity 3.14
- China has asked the G8 Italy summit to discuss issue of new global reserve currency
- Porsche (VOW GY) considering further production cuts in H2 of year due to weak demand
- IMF staff recommends USD 150bln cap on the IMF bond issuance
- Fitch says Russian banks likely to require at least USD22bln in capital
- Moody's says few US bank rating upgrades are likely in 2009
- And, surprise, surprise, KB Home founder Eli Broad says housing prices in US near or at bottom now
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Wonder if Eli Broad has EVER said "now is not a good time to buy" Hell, has anyone even heard ANY real estate agent say that? Cant believe thats even a story.
China is begging for a new Smoot-Hawley tariff bill to come along. This posturing by PBoC and CHN talking heads is pointless so long as they continue to peg to USD. In reality this smacks more of mkt manipulation since they are major intraday players in fx to begin with. Kind of like a supersized GS!
Madoff's fraud was billions. Geither+Obammi+Ben+Summers+Paulson=trillons. And worst of all, each and EVERY tax payer is a victim though hyperinflation and loss of basic civil infastructures and institutions such as school, roads, and hospitals. Tax payer money isbeing used to bailout banks and to ensure that the economy recovers ASAP so that the wealth gap widens, more credit card debt, and the little people are gouged with surging food
prices, surging gas prices, lack of jobs, and inflation lagging wages. Only the upper eschelons of society will benefit from a 'speedy recovery' It's been that way since 2002.
The worst is yet to come
good finance articles http://www.bit.ly/12NCJR
You have to be kidding me... (would think it was satire, if not for this coming from BF):
http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=20090630...
Tyler,
I'm in the mortgage biz. Have been for 17 years. Avoided making any bad loans during the last 5 years.
The idea behind this is to enable those who might benefit from the lower rates to still be able to refinance in spite of their higher LTV. Most of these folks have good credit and won't default. I know. I've looked at a stack of refi requests which simply cannot be worked unless the LTV guidelines are temporarily loosened. This well help reduce debt service for countless borrowers as well as dissuade some from walking which is a worse outcome for the noteholders. Everyone knows the last thing we need is more inventory dumped on the market which is already over-saturated with listings and forthcoming listings that were delayed due to recent forclosure abatement policies.
I'm waiting for Obama to start paying credit card bills next, now that we have given "homeowners" extra 25 bucks in cash for each 100 bucks in debt. Avoid deflation at all costs even if it leads to currency crisis.
by refi-ing (aka extending) 125% ltvs that are already in their book, all they are really doing is keeping the borrower in as renter rather than foreclosing and dumping the property. borrower pays say 5.5 rate (plus ammo goes down the drain) so 6.8 constant on 125% of value is a 8.5% rent on actual value--no handout there.
now if they were refi-ing other lenders junk to 125% LTV, then yeah, that is just another in a long line of thinly disguised handouts to the banks (NOT to the borrower, who really gains nothing but a deep out-of-the-money option)
Amen
EXACTLY what is going on
These poor fools better LOVE their house as they will be in it for a very long time.
It will be years before values rise enough to even make this a reasonable "assumption"
A cynical political shill.
These GSE's are being used to avoid any debt/principal reduction on the Lenders part.
Terrible sham.
Wish wish wish you understood more about the law so you could see where this is going. Wish you understood the legal regime under which we live (West Coast Hotel v. Parrish). Wish you understand that housing enjoys only minimum scrutiny (Lindsey v. Normet). Wish you understood how moves such as these are slowly but surely raising the level of scrutiny for housing. Wish you understood that in doing so we are slowly but surely overthrowing the scrutin regime and instituting the maintenance regime with a lot of new individually enforceable rights.
Just read Ryskamp, The Eminent Domain Revolt.
Then you would see that we do not have an economic crisis, downturn or anything economic, period. What is going on is a regime change. Very simple.
To learn more about Constitutional regime changes, just read the excellent online article by G. Edward White, "Historicizing Judicial Scrutiny."
REAL unemployment is DOUBLE the 'official' statistics. GOvernment has been playing major games with all stats for a while now - both parties are to blame.
good articles
Having said that, unless we rethink the way we use our wealth, this world is doomed. al-Waleed bin Talal, however he came by his wealth is in a position to make a difference. Instead he chooses conspicuous self-consumption.