> Fed
Says Truth In Lending Rules To Correct Subprime Abuse...
Dec 19/07
A proposal for new
truth in lending rules gets a public airing before the Fed in
Washington on Tuesday, with the rules aimed at cleaning up
unscrupulous practices in sub-prime
mortgage markets. Fed Chairman Ben
Bernanke said in a statement before the board on Tuesday morning
that the "unfair and deceptive" acts perpetrated by lenders
towards non-traditional borrowers hurt not only individuals and
families, but the "economy as a whole"....
cont... |
> Credit-worthy
customers defaulting...
Dec 19/07
Bank of America chief
executive Ken Lewis told editors of the Wall Street Journal that
he's worried about borrowers with strong credit scores not
making loan payments if the housing crisis worsens. "There's
been a change in social attitudes toward default," Lewis told
the Wall Street Journal. "We're seeing people who are current on
their credit cards but are defaulting on their mortgages. I'm
astonished that people would walk away from their homes." ...
cont... |
> Mortgage
crisis hits home for working families...
Dec 19/07
By the time Audrey
Buchite finished recounting her family's financial fall to the
brink of losing their Zimmerman home, you could hear a pin drop
in Sen. Norm Coleman's public forum on the mortgage and
foreclosure crisis. A special education paraprofessional,
Buchite and her husband, Randy, a residential framer, took out a
30-year, fixed-rate mortgage to buy their home. But as the Twin
Cities housing market slowed, Randy found jobs hard to come by,
and the family struggled to make its house payments...
cont... |
> Greenspan
on Home Prices, Loans...
Dec 18/07
Critics contend that
former Federal Reserve Chairman Alan Greenspan pursued
interest-rate policies that led to a speculative housing bubble
while failing to use the Fed's regulatory powers to crack down
on abusive mortgage lending practices...
cont... |
> Back
When Mortgages Made Sense...
Dec 18/07
After a career that
has spanned nearly enough time to repay back-to-back thirty-year
mortgages, Greenstein has seen a lot of change. And with the
mortgage industry facing a new crisis as subprime mortgages
default and foreclosure rates climb, that gives him a unique
perspective on today's troubles—and the reforms that might help
avert future problems...
cont... |
> Rate
cut too little to ease housing woes...
Dec 18/07
In 2004, Ofheo's Home
Price Index exceeded a 30-year historical average price trend,
eventually outpacing it by about 15 percent at the height of the
bubble. Where they were most out of line with average household
income, home values are plummeting. The reasons for the rapid
descent vary...
cont... |
> Mortgage-Relief
Plan Divides Neighbors...
Dec 17/07
A mortgage-relief plan
being pushed by the government is supposed to help debt-laden
homeowners across America. But it's creating dashed hopes and
fresh tensions in this city that mushroomed during the subprime-lending
boom, the Wall Street Journal reports...
cont... |
> Fasten
your seatbelts for 2008, market experts warn...
Dec 17/07
Got the stock market
jitters? Get used to it. Next year should be another wild ride
on Wall Street. That's not to say
stocks won't rise in '08. Just that the ride is likely to be
bumpy, with the possibility of nasty sell-offs and
confidence-building rallies along the way — just like this year,
when stocks hit new highs but also suffered their first 10% drop
in five years. Investors will again have to grapple with the
economic fallout caused by the real estate bust, mortgage
meltdown and resulting credit crunch....
cont... |
> Student
loan debt bearing down on graduates...
Dec 17/07
By a number of
measures, university graduates in the US are finishing school
with unmanageable levels of debt. Owing tens of thousands of
dollars on average and just entering the workforce, young people
increasingly face the prospect of paying exorbitant monthly loan
repayments well into middle age...
cont... |
> Fed
Lowers Rate by a Quarter Point to 4.25 Percent...
Dec 11/07
The Federal Reserve
lowered its benchmark interest rate by a quarter-point to 4.25
percent, while signaling officials are open to further cuts if
the housing slump and credit squeeze worsen...
cont... |
> Fed
to propose changes to mortgage rules next week...
Dec 11/07
The Federal Reserve
said on Tuesday it will hold a meeting next week to propose
changes to mortgage regulations in an attempt to address unfair
and deceptive lending practices. The
meeting, to be held next Tuesday, comes at a time when the Fed
has been criticized for failing to use its authority under the
Home Ownership and Equity Protection Act...
cont... |
> Consumer
Groups Fear Debt May Soar after Latest Fed Rate Cut...
Dec 11/07
The Federal Reserve
cut a key interest rate by one-quarter of a percentage point
Tuesday, but Wall Street took a tumble. Investors were
disappointed that the central bank did not act more boldly to
keep the country out of a recession.
But many consumer groups feared the rate cut would imbue
consumers with a false sense of confidence and inadvertently
encourage buying on credit....
cont... |
> Rate
Cuts Alone Can't Fix Financials...
Dec 11/07
ALL EYES HAVE been on
the Federal Reserve this week, but Chairman Ben Bernanke and his
acolytes, pursuing their stated policy of greater transparency,
pretty much told us to expect a cut. The only suspense was
whether it would be a quarter or half point...
cont... |
> Tighter
Fannie Mae guidelines will squeeze borrowers...
Dec 10/07
People with
less-than-stellar credit records always have paid higher
mortgage rates than those with the best credit. Soon those
borrowers -- and even those considered good credit risks --
could pay much more....
cont... |
> A
Wave of Bank Failures is Coming...
Dec 10/07
Banks across the
United States, particularly the smaller ones, have become
dependent on construction lending just as that area of the
economy is weakening and the number of bad loans is growing...
cont... |
> Subprime
mess: Securitization's first financial crisis...
Dec 10/07
Nobody seems to know
what these mortgage bundles are worth, who owns them, how much
has been borrowed using the bundles as collateral, how deeply
their value has declined, and how much bank capital the
resulting write-downs will cost. And
this is just the beginning of securitization's problems...
cont... |
> Financial
Rape: Mortgage Servicing Industry Screwing Consumers...
Dec 10/07
Foreclosing on
mortgages that have been paid off. Kicking families out of homes
when the mortgage isn’t in arrears. Selling mortgages to other
mortgage service companies who steal property owners blind with
fees and unnecessary insurance. Courts siding with property
pirates. Government bail out for mortgage buccaneers. It’s not a
movie. It’s reality and it’s coming to a house near you. ...
cont... |
> White
House to reveal sub-prime rescue today...
Dec 6/07
President Bush will
wade into the sub-prime mortgage crisis today with a rescue
package freezing interest rates on certain high-risk home loans
for up to five years. After protracted
negotiations with America's biggest lenders, the White House is
set to announce a package providing relief for a limited number
of cash-strapped homeowners who are on the brink of foreclosure.
The freeze will apply to mortgages with short-term
"teaser" interest rates which are due to jump to much higher
rates between 2008 and 2010...
cont... |
> Be
careful choosing fixes for the mortgage meltdown...
Dec 6/07
There will be few
winners in the mortgage meltdown. Democrats may be an exception,
but they can blow it by trying too hard to fix what pains so
many homeowners facing foreclosure. On
the campaign trail, New York Sen. Hillary Clinton calls for a
90-day moratorium on foreclosures and a five-year freeze on the
rates of adjustable mortgages (the Bush administration is
endorsing a similar plan). Former North Carolina Sen. John
Edwards backs loosening bankruptcy laws to help borrowers keep
their houses...
cont... |
> Sen.
Clinton criticizes Wall Street for subprime-mortgage crisis...
Dec 6/07
Sen. Hillary Rodham
Clinton criticized Wall Street yesterday for helping foster the
crisis that's ripped through the nation's mortgage-lending
industry. During an afternoon speech
at the Nasdaq MarketSite in Times Square, Clinton blamed the
financial industry for encouraging the use of subprime mortgages
and ignoring the risks they posed...
cont... |
> Forget
FICO, loan-to-value ratios a better measure of risk...
Dec 6/07
Lenders trying to get
a handle on risk in their mortgage portfolios will be better
served by examining loan-to-value ratios, rather than
individuals' credit scores which they have traditionally relied
upon, CIBC World Markets warned Wednesday.
"The modern foundation of the lending market is about to
be uprooted as FICO scores, the long trusted gauge for lenders
in determining risk and price, will prove virtually meaningless
in this credit cycle," wrote analyst Meredith Whitney in a
research note...
cont... |
> Card
rate hikes surprise some...
Dec 5/07
Senate panel looks at
practice of increasing rates of on-time payers:
Check your holiday credit card bills closely.
Some credit card companies are raising interest rates on
good customers even if they pay down their balances, on time,
every month. The reason they cite is that the customer's credit
rating has fallen elsewhere...
cont... |
> Wall
Street Firms Subpoenaed in Subprime Case...
Dec 5/07
Attorney General
Andrew M. Cuomo of New York has subpoenaed major Wall Street
firms including Merrill Lynch, Morgan Stanley and Deutsche Bank,
seeking information about the business of packaging and selling
subprime mortgages, according to people briefed on the
subpoenas....
cont... |
> Pimco's
Gross Says Fed May Have to Cut Rates Below 3%...
Dec 5/07
Bill Gross, manager of
the world's biggest bond fund at Pacific Investment Management
Co., said the Federal Reserve may have to lower its benchmark
interest rate below 3 percent to support the economy...
cont... |
> Foreclosure
Solutions Won't Be Easy...
Dec 5/07
With some two million
homeowners facing higher monthly payments that many won't be
able to afford, conditions in the housing industry easily could
get worse before they get better. A lot depends on how
homeowners, lenders and investors respond as they try to head
off defaults and foreclosures before they happen...
cont... |
> Expectations
Vary for Fed's Move...
Dec 4/07
With their forecast of
economic recovery again endangered by economic turmoil, Federal
Reserve officials next week are likely to deliver their third
"insurance" interest-rate cut this year.
How big a cut and what to say in the accompanying
statement are likely again to be difficult decisions, as they
were on Oct. 31 when the Fed cut its short-term interest-rate
target to 4.5%...
cont... |
> Borrowers
Tap Mortgages of Last Resort...
Dec 4/07
Some mortgage seekers
spurned by banks and other traditional lenders are turning to
high-cost loans known as "hard-money mortgages."
Once thought of as a last resort for strapped borrowers,
these products -- also called "private-money mortgages" -- have
different lending standards than traditional mortgages and carry
substantially higher interest rates and fees...
cont... |
> Credit
crunch hits Orange County investment pool...
Dec 4/07
The credit crunch has
taken a tiny bite from Orange County's investment pool.
Treasurer-Tax Collector Chriss Street said Tuesday he
discounted 17 county-owned securities by nearly $14 million
after a ratings agency warned it might downgrade the securities...
cont... |
> Congress
Calls Out Credit Card Companies...
Dec 4/07
Sen. Carl Levin
(D-MI), chairman of the Investigations Subcommittee of the
Senate Homeland Security and Government Affairs Committee,
warned executives from Discover Financial, Bank of America, and
Capitol One that "when a credit card issuer promises to provide
a cardholder with a specific interest rate if they meet their
credit card obligations, and the cardholder holds up their end
of the bargain, the credit card issuer should have to do the
same."...
cont... |
> Beware
of predatory swindlers peddling loans...
Dec 3/07
It seems to me that
over the past few months I have received at least several phone
calls and almost daily mail encouraging me to respond to an
offer of immediate cash if I would refinance my home. I am
always suspicious of such promotions....
cont... |
> Examining
the subprime-lending crisis...
Dec 3/07
Phyllis Gilpatrick was
in a nursing home, recuperating from her third hip surgery, on
the day she and her husband refinanced their Brighton house.
She was in no condition for an office closing. So a van
whisked her home, where she initialed a pile of loan documents
while reclining on her back in a wheelchair...
cont... |
> Paulson
details plan to ease mortgage troubles...
Dec 3/07
Treasury Secretary
Henry Paulson revealed more details about a national
mortgage-rescue plan and proposed Monday to help state and local
governments issue tax-exempt bonds to pay for mortgage
refinancing. He also confirmed that he seeks to freeze
temporarily the rates of tens of thousands of home loans that
are about to adjust to higher rates. Paulson told a national
housing forum that Congress should authorize state and local
governments to broaden their tax-exempt bond programs
temporarily....
cont... |
