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Banned
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[QUOTE=aceventura3][QUOTE=host]
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Originally Posted by aceventura3
I say the stocks were overvalued due to speculation, and that the stocks are going back to normal valuations. Some companies are going out of business and out of the market, but this is an everyday occurance in financial markets. Forclosures rates are going to increase, then decrease. Bankruptcies will increase then decrease. Credit card default rates will increase, then decrease. Car reposessions will increase, then decrease, etc, etc, etc etc. Nothing new, nothing to get alarmed about at this point in time.
Here is some stuff on mortgagebacked securities. Guess what many have government guarantees. I doubt the market is going to crash.
http://www.thestreet.com/funds/bondforum/787157.html |
Looks like at least half of mortgages don't have "government guarantees, ace:
Quote:
http://www.bloomberg.com/apps/news?p...LXo&refer=home
Bernanke Says Fannie, Freddie Need to Reduce Assets (Update4)
By James Tyson
March 6 (Bloomberg) -- Fannie Mae and Freddie Mac, the largest sources of money for U.S. home loans, should sell most of their $1.4 trillion in assets to refocus on homeownership among low-income Americans, Federal Reserve Chairman Ben S. Bernanke said. .....
..... Bernanke cited data from regulators showing that less than 30 percent of the government-chartered companies' mortgage assets, or about $420 billion, promotes affordable housing.
Congress should anchor the ``portfolios to a clear public mission'' and ``require Fannie and Freddie to focus their portfolios almost exclusively on mortgages and mortgage-backed securities that support affordable housing,'' said Bernanke, who reiterated many of the Fed's views and research on the firms since 2003. ......
..... No Recommendation
Unlike former Fed chairman Alan Greenspan, Bernanke didn't specify an optimal smaller size for the mortgage holdings. Greenspan in 2005 said each of the companies' portfolios should be cut to as little as $100 billion.
The mortgage holdings constitute one of the two biggest businesses for Washington-based Fannie Mae and McLean, Virginia- base Freddie Mac, which own or guarantee about 40 percent of the $10.5 trillion residential mortgage market. Fannie Mae's assets generated 43 percent of profits in 2004. Freddie Mac doesn't release such data. .......
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"Affordable" housing???....from a GSE ("the Fed") "shill" who was part of "the Fed" when it lowered interest rates to one percent and provided all of the liquidity that launched housing prices into the stratosphere???
Incoherent, ace.....just as the "talk" that, without unemployment even rising yet....from the effects of this "mess".....everything "will be fine"......
tick....tick.....tick....one state "down".....49 to go.....?
Quote:
http://www.freep.com/apps/pbcs.dll/a...314018/0/COL10
Michigan is alone in recession, business index finds
March 14, 2007
BY ALEJANDRO BODIPO-MEMBA
FREE PRESS BUSINESS WRITER
The slashing of auto industry jobs by the thousands, a weakening housing market and slower national growth have combined to push Michigan into a “one-state recession,” according to the Michigan Business Activity Index.
The index fell 1 point in January to 101. It matches the recent low level set in November and is down 3% from a year ago.
Produced by Comerica Bank and used since 1957, the MBAI represent 10 separate measures of economic activity across Michigan. It is seasonally adjusted and corrected for inflation.
“Our index confirms that Michigan remains stuck in a one-state recession,” said Dana Johnson, chief economist for the bank. “The state economy is not likely to make much headway anytime soon given the sizable cuts in jobs at Ford and Chrysler, the ongoing steep declines in residential building permits, and the backdrop of sluggish national growth.”
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and the "news" come on a day when GM announces a quarterly profit:
http://news.google.com/news?hl=en&ne...nG=Search+News
....but what's this ???:
Quote:
http://www.bloomberg.com/apps/news?p...Xxs&refer=home
Senate Weighs Aid to 2.2 Million Subprime Borrowers (Update4)
By James Tyson
March 13 (Bloomberg) -- U.S. lawmakers will have to consider providing aid to about 2.2 million subprime mortgage borrowers who are at risk of defaulting and losing their homes, Senate Banking Committee Chairman Christopher Dodd said today.
``The impact of losing 2.2 million homes I suspect will be in a lot of areas of our cities and towns that are already pretty hard hit, so we clearly want to look at that and legislate,'' Dodd, a Democrat from Connecticut, told reporters in Washington after a speech to the National League of Cities.
Foreclosures involving homeowners who took out subprime loans from 1998 until 2006 could cost $164 billion, Dodd said, citing a December study by the Center for Responsible Lending in Durham, North Carolina. The government needs to provide at-risk homeowners ``forbearance or something like that to give them a chance to work through and get a new financial instrument here that they can manage financially better,'' Dodd said.
Delinquencies among subprime mortgage borrowers hit a four- year high in the fourth quarter, the Washington-based Mortgage Bankers Association said today. The trade group said 13.33 percent of subprime borrowers were behind on payments in the quarter, the highest rate since the third quarter of 2002.
More than two dozen mortgage lenders have gone bankrupt, closed operations or sought buyers since the beginning of last year as the effect of looser lending standards, slowing home- price gains, and less wage growth left banks holding bad loans.
Looking to Help
Congress ``may need to do something much more quickly to provide some protection or you could end up with a lot of poverty and blight,'' Dodd said. Federal aid of a few billion dollars ``may be a lot less costly'' than $164 billion in lost wealth, he said.
Mortgage defaults during the next two years may rise to $225 billion, with about $170 billion tied to subprime loans, according to a report yesterday by analyst at Lehman Brothers Holdings Inc. led by Srinivas Modukuri. Subprime borrowers are those with poor or limited credit backgrounds or high debt.
Dodd didn't specify the channel through which federal aid would be offered. ``I don't want to settle on the specifics of it, but clearly we are looking at what we can do to help out.''
Any formal legislation would have to be approved by Dodd's committee, then passed by both the full Senate and the House of Representatives before being signed into law by the president.
Costly Solution
Federal aid ``would come at a cost,'' said Douglas Duncan, chief economist at the Mortgage Bankers Association. ``It has to be paid for and the question is would the 34 percent of homeowners who have no mortgage be willing to pay taxes to support the bailout of people who traditionally have not managed credit well?''
Duncan expressed doubt that 2.2 million subprime mortgage borrowers will lose their homes, noting that the association lists only 300,000 such borrowers as being in foreclosure now. click here to read the rest.... click to show
Senator Richard Durbin, the No. 2 Senate Democratic leader, said he is open to the idea of helping subprime borrowers while noting that Democratic leaders haven't decided whether to do so.
``We have not discussed it, but that doesn't mean that we can't or shouldn't,'' Durbin said in an interview. ``Senator Dodd is in a key position on the Banking Committee and he's talked to us about the scope of this problem and what the reasonable response might be. I'm sensitive to it. There's nothing worse than a person losing their home.''
Durbin said that Democratic leaders will look to Dodd for recommendations as Dodd's committee examines the issue.
New Bill
Representative Barney Frank, a Democrat from Massachusetts and chairman of the House Financial Services Committee, reiterated today that he intends to introduce a bill to deter lenders from offering consumers mortgages they can't afford.
``We plan to legislate to restrict those kinds of mortgages going forward,'' Frank said after a hearing in Washington. He declined to elaborate on the timing or details of such legislation.
Dodd reaffirmed a plan to introduce a bill that would combat predatory lending. ``There is a difference between a subprime lender and a predator, and I don't want to lose the subprime lender,'' he said.
The Federal Reserve, Federal Deposit Insurance Corp and other U.S. regulators on March 2 directed banks to scrutinize underwriting standards, provide more information to customers about borrowing risks and ensure borrowers are able to repay loans.
``Finally the federal regulators are beginning to indicate that they want to start requiring similar standards to be used for prime and subprime lending,'' Dodd said, referring to the new guidelines.
``I am a strong advocate of subprime lending,'' Dodd said. ``I don't want that word to become a pejorative as junk bonds did.''
While not constituting a drag on the economy, defaults may increase to $300 billion if home prices fall and borrowers forgo refinancing because of stricter lending standards, Lehman said.
To contact the reporter on this story: James Tyson in Washington at jtyson@bloomberg.net
Last Updated: March 13, 2007 18:05 EDT
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ace....these borrowers in distress are feeling the effects of a halt and a slight reversal, compared to what is coming, in the increasing valuations of the homes that they purchased with "no money down", "time bomb", teaser rate subprime, initially "interest only" loans.
Quote:
http://www.ocregister.com/ocregister...le_1618642.php
Wednesday, March 14, 2007
Behind the subprime crisis
Risks catch up with lenders when loans are worth more than properties and investors pull financial backing.
By JOHN GITTELSOHN and MATHEW PADILLA
The Orange County Register
Ameriquest Mortgage. ECC Capital. Fremont General Corp. Resmae Mortgage. New Century Financial Corp.
The casualty list of Orange County subprime lenders grows.
What's behind this crisis?
Easy money.....
.......Aggressive lenders
It was a deal hard to refuse: No-money-down mortgages without proof of income, where borrowers qualified at the discounted teaser interest rate. Only problem: Payments doubled or tripled in year three of 30-year plans.
Bill Spitalnick spent seven years reviewing appraisals for subprime loans, first at Ameriquest in Orange and then at Fremont Investment & Loan in Anaheim. Last year, he began to see more cases where the loans exceeded the home's values.
"The main problem was 100 percent financing and declining values," said Spitalnick of a situation that put the lender at great risk.........
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Even if Tommy Dodd made foreclosure illegal, this is a system predicated on reliably increasing property values....price stagnation still removes all speculative liquidity from the housing market....the uncertainty stays, and none of this looks likes the things that make for a "healthy economy" as an atmosphere for 2008 candidates to "run in", especially for republican candidates....
....and keep on eye on the stock market indices in Japan, Hong Kong, Korea, China, and the in the US....you ain't seen nothin' yet:
http://finance.yahoo.com/intlindices?e=americas
Quote:
http://finance.yahoo.com/intlindices?e=asia
Today, Wed, Mar 14, 2007
• ^N225 FOREX-Yen keeps most gains as investors unwind riskat Reuters (Wed 6:39am)
• ^N225 U.S. subprime fears spark renewed slide in global stocksReuters (Wed 5:20am)
Tue, Mar 13, 2007
• ^HSI Asian shares slump on U.S. mortgage woesReuters (Tue 11:17pm)
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Last edited by host; 03-14-2007 at 07:50 AM..
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