The Coming Default Tsunami Grabs Power From Banking Industry – about government bonds and inflation – The Prudent Investor
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Obama Keeps Fannie, Freddie Off U.S. Budget, Counts Dividends – By Dawn Kopecki – President Barack Obama’s budget blueprint for the next fiscal year excludes the $6.3 trillion in liabilities of government-controlled Fannie Mae and Freddie Mac and delays for a second time a decision on restructuring the mortgage-finance companies that were seized 17 months ago. – Bloomberg BusinessWeek
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Zombie Update: Loan Repurchases and REO Anyone? – Christopher Whalen – on GSE repurchase demands and the future of securitization – The Institutional Risk Analyst
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Regulator to Block New Loan Products from Fannie, Freddie – By NICK TIMIRAOS –
Mortgage-finance giants Fannie Mae and Freddie Mac will not be allowed to introduce new loan products in the mortgage market while they are under the control of the U.S. government, the companies’ federal regulator announced Tuesday in a letter to Congress. – Wall Street Journal Politics
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FHA to Increase MIP and Cut Principal Limit for Reverse Mortgage Product – Reverse Mortgage Daily
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US FHFA Text: Private Entities May Take Up Fed GSE MBS Slack – … The first part of the letter will review the establishment and purposes of the conservatorships, and how the conservatorships are operating. FHFA is focused on conserving the Enterprises’ assets and meeting the goals of the conservatorship. The second part of the letter describes FHFA’s views on the future direction of the Enterprises’ business activities while they are in conservatorship, particularly: loan modifications and mitigating credit losses; retained portfolio; new products; and affordable housing mission. … – iMarketNews
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No Help in Sight, More Homeowners Walk Away – By DAVID STREITFELD – … “People like me are beginning to feel like suckers,” Mr. Koellmann said. “Why not let it go in default and rent a better place for less?” … – NY Times
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Treasury considers changing mortgage-modification test – By Dawn Kopecki and Theo Francis – The Treasury Department is looking into altering its "net present value" test, which is used to determine whether modifying a mortgage or foreclosing on the property would be more beneficial to the lender and bond investors. "We’re looking at the NPV model to see whether there should be some changes" that would result in more mortgage-principal write-downs, said Seth Wheeler of the Treasury. … – Bloomberg
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S&P increases loss assumptions for mortgage securities, downgrades 12,000+ RMBS - Standard & Poor’s today updated its loss projections for 2005-2007 vintage prime, subprime, and Alt-A residential mortgage-backed securities transactions, leading it to place 12,000 classes of securities (RMBS) issued in 2005-2007 on CreditWatch with negative implications. – Research Recap
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FHFA reducing Fannie, Freddie portfolios – The federal regulator in charge of Fannie Mae and Freddie Mac said Tuesday that the mortgage finance giants would not be taking on additional measures to bring down interest rates on home loans as other government programs to stimulate the housing market expire. The Federal Housing Finance Agency said it is committed to reducing the companies’ mortgage portfolios and does not expect the firms "to be substantial buyers or sellers of mortgages." – Washington Post
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thoughts on Australian housing bubble by MISH – Pool of Greater Housing Fools in Australia Finally Runs Out; OZ Dollar, Where to from Here? – Michael Shedlock – Seeking Alpha
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GSE Refinancing Soar 37% In Dec. – The Federal Housing Finance Agency reports that refinancing at Fannie Mae and Freddie Mac climbed 37% in December to almost 297,000. – EMII.com
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Arm Reset Problems: Mortgage-Index Quirks Prove Costly – By CARRICK MOLLENKAMP – Tens of thousands of homeowners with adjustable-rate mortgages have seen their monthly payments jump or stay high even as they have fallen for other homeowners. This disparity owes to the indexes used to calculate those payments have moved in unexpected ways. – WSJ Real Estate
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Second Mortgage Jackpot? – How Banks Can Win From Being Second – BY PETER EAVIS – however, government programs aimed at making first mortgages less burdensome have left the junior loans largely unmodified, meaning in some cases the junior lender is basically getting bailed out for free. … – WSJ Heard on the Street
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Contemplating the Fed’s Exit – … So while it may be a stretch to suggest that mortgage rates have been “pushed down,” it is fair to ask how much higher they might be without the government intervention. Not only is it a fair question, it is the question of the moment. Come March 31, the Agency MBS market is going to find out how it will perform without the government’s involvement (the Treasury has already quit its buying program). … – Annaly Capital Management
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read this – Another Reason Why RE Defaults Will Explode This Year – IRS Form 4506 – … We have created incentives for default. And they are powerful incentives. Tens of thousands of dollars a year are at stake – has 3 reactions from consumers regarding mods – … The implication is that starting sometime in July and continuing for some time thereafter there will be a very big wave of new defaults, jingle mail, short sales, DIL transactions and foreclosures. It means RE will suffer and prices will likely have to fall. The timing for this could not be worse. … – Bruce Krasting Blog