By Margaret Chadbourn
June 30 (Bloomberg) -- Delinquency rates on the least risky mortgages more than doubled in the first quarter from a year earlier as U.S. efforts to help homeowners failed to keep pace with job losses that pushed more borrowers toward foreclosure.
Prime mortgages 60 days or more past due climbed to 2.9 percent of such loans through March 31 from 1.1 percent at the same point in 2008, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said today in a report. First-time foreclosure filings on the loans rose 22 percent from the fourth quarter, the report said.
“I’m very concerned about the rise in delinquent mortgages and foreclosure actions,” Comptroller of the Currency John Dugan said in a statement released with the quarterly report. President Barack Obama's plan to create “sustainable, payment- reducing modifications is a positive step that should show significant benefits in the coming months,” Dugan said.
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Tuesday, June 30, 2009
Monday, June 29, 2009
Paper Avalanche Buries Plan to Stem Foreclosures
LOS ANGELES — Somewhere on earth, there must be a more difficult task than this: persuading American mortgage companies to lower payments for homeowners who can no longer afford their loans. But as Karina Montenegro struggles to accomplish this feat for a troubled borrower, she strains to imagine a more futile pursuit.
Ms. Montenegro, an intern at a local company that seeks loan modifications, dials Washington Mutual to check on the status of an application for a homeowner whose income has plummeted. She endures a Muzak-scored purgatory while on hold. Syrupy-voiced customer service representatives chide her for landing in the wrong department. She learns that the documents her company sent in have simply vanished — for the third time since November.
“I don’t know what happened,” says a customer service officer who identifies himself as Chris. “I don’t know if there was a glitch in the system, whether it was transferred from one call center to the other.”
Think of the documents as being part of a pile massing inside the bank, Chris suggests. “This pile is not going to be moved forward at any point in time.”
Ms. Montenegro and her colleagues suffer these sorts of excruciating exchanges all day long. It is a potent indication of the difficulties afflicting the $75 billion taxpayer-financed program created by the Obama administration in an effort to avoid foreclosure for as many as four million distressed homeowners.
Under the plan, the government offers mortgage companies $1,000 for each loan they agree to modify, then another $1,000 a year for up to three years.
Hanging in the balance is more than the fate of individual homeowners. The administration portrays its mortgage program as a crucial piece of its broader effort to restore vigor to the economy. If the effort fails, foreclosures will continue to surge and home prices will probably keep falling, sowing fresh losses in the financial system and threatening to crimp credit anew for businesses and households.
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Ms. Montenegro, an intern at a local company that seeks loan modifications, dials Washington Mutual to check on the status of an application for a homeowner whose income has plummeted. She endures a Muzak-scored purgatory while on hold. Syrupy-voiced customer service representatives chide her for landing in the wrong department. She learns that the documents her company sent in have simply vanished — for the third time since November.
“I don’t know what happened,” says a customer service officer who identifies himself as Chris. “I don’t know if there was a glitch in the system, whether it was transferred from one call center to the other.”
Think of the documents as being part of a pile massing inside the bank, Chris suggests. “This pile is not going to be moved forward at any point in time.”
Ms. Montenegro and her colleagues suffer these sorts of excruciating exchanges all day long. It is a potent indication of the difficulties afflicting the $75 billion taxpayer-financed program created by the Obama administration in an effort to avoid foreclosure for as many as four million distressed homeowners.
Under the plan, the government offers mortgage companies $1,000 for each loan they agree to modify, then another $1,000 a year for up to three years.
Hanging in the balance is more than the fate of individual homeowners. The administration portrays its mortgage program as a crucial piece of its broader effort to restore vigor to the economy. If the effort fails, foreclosures will continue to surge and home prices will probably keep falling, sowing fresh losses in the financial system and threatening to crimp credit anew for businesses and households.
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Friday, June 26, 2009
Consumer spending rebounds, supports recovery view
WASHINGTON (Reuters) - U.S. consumer spending rose last month for the first time since February as government stimulus pushed incomes sharply higher, the Commerce Department said on Friday, supporting the view the economy was close to pulling out of recession.
Consumer spending, which accounts for over 70 percent of U.S. economic activity, rose 0.3 percent in May after an upwardly revised flat reading in April, the department said.
Mark Vitner, an economist with Wachovia in Charlotte, North Carolina, said that while consumer spending was likely to drop further for the second quarter as a whole, the data suggested it was on a better trajectory heading into the third quarter.
"This confirms our forecast that the economy is going to move into positive territory in the third quarter," he said.
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Consumer spending, which accounts for over 70 percent of U.S. economic activity, rose 0.3 percent in May after an upwardly revised flat reading in April, the department said.
Mark Vitner, an economist with Wachovia in Charlotte, North Carolina, said that while consumer spending was likely to drop further for the second quarter as a whole, the data suggested it was on a better trajectory heading into the third quarter.
"This confirms our forecast that the economy is going to move into positive territory in the third quarter," he said.
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Thursday, June 25, 2009
Loan Modifications Up at Fannie, Freddie, But So Are Late Payments
Loan modifications at Fannie Mae and Freddie Mac were up 57 percent in the first quarter compared to the fourth quarter, and more than double the numbers seen a year ago, according to the FHFA.
During the first quarter of 2009, nearly 37,000 loans were modified, results which reflect theStreamlined Modification Program, but not the Home Affordable Modification program that was still being developed in March.
“The use of serious loan modifications by Fannie Mae and Freddie Mac has risen dramatically,” said FHFA Director James Lockhart. “As a result, more homeowners are seeing payments significantly reduced and fewer people will lose their homes.”
Loan modifications accounted for 43 percent of all completed foreclosure prevention actions during the quarter, up 33 percent from the linked quarter.
More than half reduced monthly mortgage payments by greater than 20 percent, up from the mere two percent that did so a year ago.
Total foreclosure prevention actions, including forbearance, repayments plans, and other measures, increased 20 percent from the fourth quarter and more than doubled numbers from a year earlier.
Home retention actions, where the borrower actually remains in the home, accounted for 90 percent of all these actions completed during the first quarter; the remaining 10 percent were things like short sales and deeds in lieu of foreclosure.
Unfortunately, loan delinquencies continue to rise at the government-sponsored entities, with 3.6 percent of borrowers 60 days or more behind on their mortgages; that meant another 173,700 loans became 60 days or more behind during the quarter.
One in 10 nonprime loans was 60 days + behind, while just three in 100 prime loans held that distinction.
To read the original article click here
check out www.faloanaudits.com
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During the first quarter of 2009, nearly 37,000 loans were modified, results which reflect theStreamlined Modification Program, but not the Home Affordable Modification program that was still being developed in March.
“The use of serious loan modifications by Fannie Mae and Freddie Mac has risen dramatically,” said FHFA Director James Lockhart. “As a result, more homeowners are seeing payments significantly reduced and fewer people will lose their homes.”
Loan modifications accounted for 43 percent of all completed foreclosure prevention actions during the quarter, up 33 percent from the linked quarter.
More than half reduced monthly mortgage payments by greater than 20 percent, up from the mere two percent that did so a year ago.
Total foreclosure prevention actions, including forbearance, repayments plans, and other measures, increased 20 percent from the fourth quarter and more than doubled numbers from a year earlier.
Home retention actions, where the borrower actually remains in the home, accounted for 90 percent of all these actions completed during the first quarter; the remaining 10 percent were things like short sales and deeds in lieu of foreclosure.
Unfortunately, loan delinquencies continue to rise at the government-sponsored entities, with 3.6 percent of borrowers 60 days or more behind on their mortgages; that meant another 173,700 loans became 60 days or more behind during the quarter.
One in 10 nonprime loans was 60 days + behind, while just three in 100 prime loans held that distinction.
To read the original article click here
check out www.faloanaudits.com
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REQUIRED READING: The Fannie And Freddie Quandary
It's a perfect time to think about the fundamental restructuring of the world famous (and now broke) government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.
Economy dips at slightly lower pace in 1Q
Economy sinks less than expected in first quarter; new jobless claims rise unexpectedly
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Wednesday, June 24, 2009
JPMorgan Charges 5% on Credit-Card Balance Transfers
Will the other banks follow...
June 24 (Bloomberg) -- JPMorgan Chase & Co. is raising some balance-transfer fees on credit cards to 5 percent, the highest among the nation’s largest banks, citing increasing regulations and costs after the U.S. put new curbs on the industry.
JPMorgan, the biggest credit-card issuer, disclosed the increase in a notice mailed to customers this month that referred to “new federal regulations.” The New York-based lender starts charging more in August, just as the law designed to curb interest-rate increases, fees and marketing practices begins to take effect.
The credit-card law President Barack Obama signed May 22 prompted warnings from industry executives that they’d be forced to raise fees, curtail credit and restrict consumer rewards. Hearings are scheduled today in Congress on Obama’s proposed Consumer Financial Protection Agency, which would have authority over increases like the one JPMorgan is planning, House Financial Services Committee Chairman Barney Frank said.
“What Chase is doing is strengthening the argument for the new entity,” Frank, a Massachusetts Democrat, said in an interview today before the hearings. Banks should be able to impose fees to cover their costs, not to create a “new profit center,” he said.
Top Rate
The rate increase at JPMorgan also affects cash advances, and fixed rates will become variable, the notice said. The bank didn’t specify the current average fee for balance transfers, and JPMorgan spokesman Paul Hartwick declined to say how many customers are affected. The notice says JPMorgan may choose to offer a lower transfer fee; Hartwick declined to elaborate on how customers might qualify.
“In the current economic environment, our costs of doing business have been impacted by increased losses,” Hartwick said in an e-mailed statement. “We are increasing balance-transfer fees to reflect the increasing costs.”
JPMorgan’s 5 percent fee tops the 4 percent that Bank of America Corp. implemented June 1, citing increasing costs. Bank of America ranks third by cards outstanding, according to industry newsletter the Nilson Report.
“This is the highest balance-transfer fee in the industry,” said Bill Hardekopf, chief executive officer of LowCards.com, a Birmingham, Alabama research firm. “It is setting a new precedent that I’m afraid other issuers may follow.”
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June 24 (Bloomberg) -- JPMorgan Chase & Co. is raising some balance-transfer fees on credit cards to 5 percent, the highest among the nation’s largest banks, citing increasing regulations and costs after the U.S. put new curbs on the industry.
JPMorgan, the biggest credit-card issuer, disclosed the increase in a notice mailed to customers this month that referred to “new federal regulations.” The New York-based lender starts charging more in August, just as the law designed to curb interest-rate increases, fees and marketing practices begins to take effect.
The credit-card law President Barack Obama signed May 22 prompted warnings from industry executives that they’d be forced to raise fees, curtail credit and restrict consumer rewards. Hearings are scheduled today in Congress on Obama’s proposed Consumer Financial Protection Agency, which would have authority over increases like the one JPMorgan is planning, House Financial Services Committee Chairman Barney Frank said.
“What Chase is doing is strengthening the argument for the new entity,” Frank, a Massachusetts Democrat, said in an interview today before the hearings. Banks should be able to impose fees to cover their costs, not to create a “new profit center,” he said.
Top Rate
The rate increase at JPMorgan also affects cash advances, and fixed rates will become variable, the notice said. The bank didn’t specify the current average fee for balance transfers, and JPMorgan spokesman Paul Hartwick declined to say how many customers are affected. The notice says JPMorgan may choose to offer a lower transfer fee; Hartwick declined to elaborate on how customers might qualify.
“In the current economic environment, our costs of doing business have been impacted by increased losses,” Hartwick said in an e-mailed statement. “We are increasing balance-transfer fees to reflect the increasing costs.”
JPMorgan’s 5 percent fee tops the 4 percent that Bank of America Corp. implemented June 1, citing increasing costs. Bank of America ranks third by cards outstanding, according to industry newsletter the Nilson Report.
“This is the highest balance-transfer fee in the industry,” said Bill Hardekopf, chief executive officer of LowCards.com, a Birmingham, Alabama research firm. “It is setting a new precedent that I’m afraid other issuers may follow.”
To read the original article click here
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The correspondent division, which buys loans from banks and independent mortgage firms, stopped accepting new loans at 5 p.m. yesterday
Tuesday, June 23, 2009
U.S. Economy: Slide in Home Prices Spurs Increase in Resales
June 23 (Bloomberg) -- Sales prices of existing homes dropped 17 percent in May from a year before, spurring a second straight gain in purchases and helping reduce the nation’s glut of unsold properties.
Purchases rose 2.4 percent to an annual rate of 4.77 million, lower than forecast, the National Association of Realtors said in Washington. The median price drop was the third-deepest on record. Separate figures showed home values nationally fell 0.1 percent in April from a month earlier.
Tax breaks for first-time buyers in the Obama administration’s stimulus plan and lower mortgage rates have also helped support an industry now in its fourth year of decline. At the same time, any recovery is likely to be limited with unemployment rising and borrowing costs shooting back up.
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Purchases rose 2.4 percent to an annual rate of 4.77 million, lower than forecast, the National Association of Realtors said in Washington. The median price drop was the third-deepest on record. Separate figures showed home values nationally fell 0.1 percent in April from a month earlier.
Tax breaks for first-time buyers in the Obama administration’s stimulus plan and lower mortgage rates have also helped support an industry now in its fourth year of decline. At the same time, any recovery is likely to be limited with unemployment rising and borrowing costs shooting back up.
To read the original article click here
Additional article that may interest you...
Existing home sales rose 2.4 percent in May; prices plunge 16.8 percent
Sales of previously occupied homes rose modestly from April to May
S&P Downgrades More U.S. Prime Jumbo RMBS
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Monday, June 22, 2009
Making Home Affordable program may help more underwater homeowners
The Making Home Affordable program may be further expanded to help more underwater homeowners refinance their mortgages.
Though mortgage rates have crept up in recent weeks, current interest rates are more favorable than they have been in the past few years.
However, many homeowners have been unable to take advantage of the low rates thanks to loan-to-value (LTV) constraints, among other things.
The Home Affordable Refinance program currently has a LTV ceiling of 105 percent, meaning even those with no equity or private mortgage insurance can take advantage of the program.
But many borrowers have lost so much equity over the past few years that the FHFA is considering raising that ceiling to as much as 125 percent LTV, according to a Bloomberg report.
Originally, FHFA director James B. Lockhart noted that the line was drawn at 105 percent so loans could be securitized, and also due to capacity constraints.
However, the Obama Administration seems keen to boost participation in the program by easing eligibility, though some argue that it’s too little, too late, as mortgage rates have increased about a point in the past month.
One “mortgage strategist” who spoke with Bloomberg said the enhanced LTV limits could reach another 10 percent of borrowers with Fannie Mae and Freddie Mac loans, but another four percent are even deeper underwater.
To read the original article click here
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Forensic Mortgage Audits
Though mortgage rates have crept up in recent weeks, current interest rates are more favorable than they have been in the past few years.
However, many homeowners have been unable to take advantage of the low rates thanks to loan-to-value (LTV) constraints, among other things.
The Home Affordable Refinance program currently has a LTV ceiling of 105 percent, meaning even those with no equity or private mortgage insurance can take advantage of the program.
But many borrowers have lost so much equity over the past few years that the FHFA is considering raising that ceiling to as much as 125 percent LTV, according to a Bloomberg report.
Originally, FHFA director James B. Lockhart noted that the line was drawn at 105 percent so loans could be securitized, and also due to capacity constraints.
However, the Obama Administration seems keen to boost participation in the program by easing eligibility, though some argue that it’s too little, too late, as mortgage rates have increased about a point in the past month.
One “mortgage strategist” who spoke with Bloomberg said the enhanced LTV limits could reach another 10 percent of borrowers with Fannie Mae and Freddie Mac loans, but another four percent are even deeper underwater.
To read the original article click here
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The US Federal Reserve is considering dramatic changes to the giant repurchase – or repo – markets where banks around the world raise overnight dollar loans.
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Friday, June 19, 2009
Originate to Distribute Mortgages Default More
Mortgages sold on the secondary market quickly after being originated were underwritten more poorly than loans kept on bank’s books, according to a report from the University of Michigan Ross School of Business.
The so-called originate-to-distribute (OTD) model, where mortgages are sold in bulk to investors shortly after being originated, allowed banks and lenders to loosen guidelines and throw underwriting rules out the window in return for big incentives.
“Purnanandam’s analysis shows that the more a bank participated in the OTD market before the 2007 collapse, the larger its mortgage asset charge-offs and defaults after the disruption,” the report said.
“When the market for mortgage loans collapsed, these banks were forced to carry the troubled mortgages on their balance sheets. The research also shows higher foreclosure rates for OTD mortgages than those mortgages kept by the originators.”
Purnanandam blames an “incentive problem” where banks and lenders weren’t as discerning about borrowers if they knew the mortgage would eventually be sold to a third-party.
“The screening came down, and the banks were willing to lend to folks they otherwise would not have,” said Purnanandam. “We find a systematic pattern in that the banks that were originating and selling their mortgages are suffering disproportionately more.”
Data also revealed that banks with lower capitalization were more likely to originate low-quality loans, while banks primarily funded by customer deposit accounts did not originate “excessively inferior” OTD loans.
To read the entire article click here
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Rates Fall Back on Lower Inflation
Average mortgage rates across the board fell in the week ending June 18 after spiking briefly the week before, according to a survey released today by mortgage giant Freddie Mac (FRE: 0.7353 +2.12%).
The so-called originate-to-distribute (OTD) model, where mortgages are sold in bulk to investors shortly after being originated, allowed banks and lenders to loosen guidelines and throw underwriting rules out the window in return for big incentives.
“Purnanandam’s analysis shows that the more a bank participated in the OTD market before the 2007 collapse, the larger its mortgage asset charge-offs and defaults after the disruption,” the report said.
“When the market for mortgage loans collapsed, these banks were forced to carry the troubled mortgages on their balance sheets. The research also shows higher foreclosure rates for OTD mortgages than those mortgages kept by the originators.”
Purnanandam blames an “incentive problem” where banks and lenders weren’t as discerning about borrowers if they knew the mortgage would eventually be sold to a third-party.
“The screening came down, and the banks were willing to lend to folks they otherwise would not have,” said Purnanandam. “We find a systematic pattern in that the banks that were originating and selling their mortgages are suffering disproportionately more.”
Data also revealed that banks with lower capitalization were more likely to originate low-quality loans, while banks primarily funded by customer deposit accounts did not originate “excessively inferior” OTD loans.
To read the entire article click here
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Wall Street isn’t buying Obama’s reform plan
Banks and other firms are quick to attack Obama's consumer-friendly overhaul of financial rules. The stage is set for a legislative battle, with Wall Street turning to allies in Congress.
We’ve Gone From Saving Wall Street in Order to Save Main Street to Just Saving Wall Street
But parsing through his 85-page plan, it's not clear how these reforms will ensure that our financial system works for the economy as a whole.
Rates Fall Back on Lower Inflation
Average mortgage rates across the board fell in the week ending June 18 after spiking briefly the week before, according to a survey released today by mortgage giant Freddie Mac (FRE: 0.7353 +2.12%).
Too Big to Fail, or Succeed
Everyone will want to become big enough to enjoy 'systemic risk' protection. By Peter J. Wallison
In a speech at the White House yesterday, President Barack Obama outlined what he envisions for future regulation of the financial system. He called his plan "a new foundation for sustained economic growth . . . a transformation on a scale not seen since the reforms that followed the Great Depression." Indeed it is.
His plan, if adopted, will fundamentally change the nature of our financial system and economy. The underlying concerns and assumptions are clear, and they are made clearer by considering other ways that his administration has dealt with the consequences of competition -- particularly the faux bankruptcies of General Motors and Chrysler and the impending change in antitrust policy. Although the president said in his speech that he supports free markets, these initiatives confirm that the administration fears the "creative destruction" that free markets produce, preferring stability over innovation, competition and change.
To read the original article click here
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Total Jobless Claims Drop Sharply, First-Time Claims Rise Slightly
The total number of people on the unemployment insurance rolls has dropped for the first time since early January, while first-time claims for benefits rose slightly, the Labor Department said Thursday.
Consumer Financial Protection Agency To Change Mortgage Game
Mortgage brokers will be obligated to sell the best available mortgage loans to avoid conflicts of interest between themselves and borrowers, while also determining the mortgages they sell are affordable to borrowers.
U.S. Stocks Gain as Data Boosts Optimism Economy Is Recovering
U.S. stocks snapped a three-day losing streak as reports on jobless claims and manufacturing added to evidence the recession may be near a bottom.
In a speech at the White House yesterday, President Barack Obama outlined what he envisions for future regulation of the financial system. He called his plan "a new foundation for sustained economic growth . . . a transformation on a scale not seen since the reforms that followed the Great Depression." Indeed it is.
His plan, if adopted, will fundamentally change the nature of our financial system and economy. The underlying concerns and assumptions are clear, and they are made clearer by considering other ways that his administration has dealt with the consequences of competition -- particularly the faux bankruptcies of General Motors and Chrysler and the impending change in antitrust policy. Although the president said in his speech that he supports free markets, these initiatives confirm that the administration fears the "creative destruction" that free markets produce, preferring stability over innovation, competition and change.
To read the original article click here
Other articles of interest...
Total Jobless Claims Drop Sharply, First-Time Claims Rise Slightly
The total number of people on the unemployment insurance rolls has dropped for the first time since early January, while first-time claims for benefits rose slightly, the Labor Department said Thursday.
Consumer Financial Protection Agency To Change Mortgage Game
Mortgage brokers will be obligated to sell the best available mortgage loans to avoid conflicts of interest between themselves and borrowers, while also determining the mortgages they sell are affordable to borrowers.
U.S. Stocks Gain as Data Boosts Optimism Economy Is Recovering
U.S. stocks snapped a three-day losing streak as reports on jobless claims and manufacturing added to evidence the recession may be near a bottom.
Wednesday, June 17, 2009
Bill Calls for $15,000 Any-Time Home Buyer Credit
By DIANA GOLOBAYJune 16, 2009 7:53 AM CST
The Mortgage Bankers Association (MBA) on Monday declared its support for a Senate bill, S 1230 or the Homebuyer Tax Credit Act of 2009, which expands the current first-time home buyer tax credit from $8,000 to $15,000.
The bill also makes the tax credit available to anyone who purchases a principal residence in the year following the enactment of the bill. The MBA is already calling for monetization of the credit at the closing table on the grounds that more consumers will become home buyers if they don’t have to struggle to put away a substantial down payment.
“The current $8,000 credit for first-time buyers has had a positive effect on the housing market this year,” said MBA chairman David Kittle in a media statement. “Increasing the amount and expanding the benefit to include all home buyers will have an even larger impact in spurring the housing market and stabilizing the economy.”
To read the original article click here
Other interesting articles:
ABC TURNS PROGRAMMING OVER TO OBAMA; NEWS TO BE ANCHORED FROM INSIDE WHITE HOUSE
Home Builders See a Bottom
Economists Say Recession to End in Q309
The Mortgage Bankers Association (MBA) on Monday declared its support for a Senate bill, S 1230 or the Homebuyer Tax Credit Act of 2009, which expands the current first-time home buyer tax credit from $8,000 to $15,000.
The bill also makes the tax credit available to anyone who purchases a principal residence in the year following the enactment of the bill. The MBA is already calling for monetization of the credit at the closing table on the grounds that more consumers will become home buyers if they don’t have to struggle to put away a substantial down payment.
“The current $8,000 credit for first-time buyers has had a positive effect on the housing market this year,” said MBA chairman David Kittle in a media statement. “Increasing the amount and expanding the benefit to include all home buyers will have an even larger impact in spurring the housing market and stabilizing the economy.”
To read the original article click here
Other interesting articles:
ABC TURNS PROGRAMMING OVER TO OBAMA; NEWS TO BE ANCHORED FROM INSIDE WHITE HOUSE
Home Builders See a Bottom
Economists Say Recession to End in Q309
Monday, June 15, 2009
Oil falls below $72 as US dollar strengthens
Oil falls below $72 as 3-month rally stalls amid stronger US dollar
Pablo Gorondi, Associated Press Writer
On Monday June 15, 2009, 9:10 am EDT
Oil prices fell below $72 a barrel Monday, halting a three-month rally, as the dollar, which typically trades inversely to crude, was boosted by comments by Russia's finance minister.
Benchmark crude for July delivery was down 23 cents to $71.81 a barrel by mid-afternoon in Europe in electronic trading on the New York Mercantile Exchange. Earlier in the session, it traded as low as $70.71. On Friday, it fell 64 cents to settle at $72.04.
Oil prices have more than doubled since March partly on expectations that massive U.S. fiscal and monetary stimulus will hasten a decline of the dollar. Investors often buy crude and other commodities as a hedge against the risk of inflation posed by a weaker dollar.
The euro fell to $1.3880 on Monday from $1.4015 on Friday, while the British pound was down to $1.6423 from $1.6450, after Russian finance chief Alexei Kudrin said this weekend that the dollar's status as the world's main reserve currency was unlikely to change in the near term.
Traders are also wary that the recent price run-up isn't supported by improving supply and demand fundamentals.
"There's more talk in the market of expectations of a pullback in oil," said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore. "It's rallied too much in too short a period of time."
"Oil is still very strong given the weak overall fundamentals," he said.
To read original article click here
Other articles of interest...
Stay the Course
The debate over economic policy has taken a predictable yet ominous turn:
IMF Chief: Worst of Global Crisis Not Yet Over
The worst of the global economic crisis is not yet over but there are signs that the world has started to crawl out of recession..
Obama Financial Reforms Outlined in Op-ed Piece
Senior Obama administration officials Monday said in a newspaper op-ed piece that a landmark financial regulation reform plan to be released this week…
Friday, June 12, 2009
Will Obama's Financial Overhaul Bring Real Change?
“Obama himself has said little about specific proposals, though reports suggest that he'll promote measures that would protect consumers who buy financial products and make it easier for the government to liquidate troubled financial firms.”
To read the entire article click here
Recommended Reading
Feeling Poorer? U.S. Household Wealth Shrivels
American households lost $1.33 trillion of their wealth in the first three months of the year…
Rising Mortgage Rates Shuts Off Refinancing Wave
Economists are worried at the sharp rise in home mortgage rates over the past couple of weeks.
U.S. consumers' mood strongest in 9 months
U.S. consumer confidence rose to a nine-month high in June…
How to fix the SEC
The plush environs made it all too comfortable for lawyers and investigators and discouraged them from venturing out to discover what the Wall Street banks were doing with all that leverage or sniffing out what Bernie Madoff and R. Allen Stanford were really up to…
Citigroup Bailout Pays Taxpayers Three Times as Much as S&P 500
U.S. taxpayers have reaped a 7.5 percent return on the $45 billion used to rescue Citigroup Inc.,
To read the entire article click here
Recommended Reading
Feeling Poorer? U.S. Household Wealth Shrivels
American households lost $1.33 trillion of their wealth in the first three months of the year…
Rising Mortgage Rates Shuts Off Refinancing Wave
Economists are worried at the sharp rise in home mortgage rates over the past couple of weeks.
U.S. consumers' mood strongest in 9 months
U.S. consumer confidence rose to a nine-month high in June…
How to fix the SEC
The plush environs made it all too comfortable for lawyers and investigators and discouraged them from venturing out to discover what the Wall Street banks were doing with all that leverage or sniffing out what Bernie Madoff and R. Allen Stanford were really up to…
Citigroup Bailout Pays Taxpayers Three Times as Much as S&P 500U.S. taxpayers have reaped a 7.5 percent return on the $45 billion used to rescue Citigroup Inc.,
Thursday, June 11, 2009
One million option arms to reset in next four years??
An estimated one million option arms are expected to reset higher over the next four years, according to a Bloomberg report.
About three quarters of these loans will adjust next year and in 2011, with resets peaking in August 2011 when 54,000 loans are set to lose their negative amortization feature.
More than $750 billion in option arms were originated between 2004 and 2008, with hard-hit California accounting for roughly 58 percent of them.
One borrower cited in the Bloomberg report received one of the most toxic option arms I’ve never heard of, with a start rate of just 0.375 percent and a negative amortization ceiling of 145 percent.
That particular borrower will experience massive payment shock, with the monthly mortgage payment rising to $3,500 from just $98.
Click here to read the entire article
About three quarters of these loans will adjust next year and in 2011, with resets peaking in August 2011 when 54,000 loans are set to lose their negative amortization feature.
More than $750 billion in option arms were originated between 2004 and 2008, with hard-hit California accounting for roughly 58 percent of them.
One borrower cited in the Bloomberg report received one of the most toxic option arms I’ve never heard of, with a start rate of just 0.375 percent and a negative amortization ceiling of 145 percent.
That particular borrower will experience massive payment shock, with the monthly mortgage payment rising to $3,500 from just $98.
Click here to read the entire article
Fed Still on MBS Buying Spree
By DIANA GOLOBAY
June 11, 2009 11:11 AM CST
The Fed continues to purchase large volumes of mortgage-backed securities (MBS) from government-sponsored enterprises.
The move is a response to improved financial market conditions in recent weeks, culminating with the release of the stress test results calculated under the Supervisory Capital Assessment Program, according to the Federal Reserve, which then reduced efforts to extend credit under its liquidity programs.
Click here to read the original article at Housingwire.com
June 11, 2009 11:11 AM CST
The Fed continues to purchase large volumes of mortgage-backed securities (MBS) from government-sponsored enterprises.
The move is a response to improved financial market conditions in recent weeks, culminating with the release of the stress test results calculated under the Supervisory Capital Assessment Program, according to the Federal Reserve, which then reduced efforts to extend credit under its liquidity programs.
Click here to read the original article at Housingwire.com
Foreclosures fall 6 percent in May from April
Alan Zibel, AP Real Estate Writer
On Thursday June 11, 2009, 7:57 am EDT
WASHINGTON (AP) -- The number of U.S. households on the verge of losing their homes dipped in May from April, and the annual increase was the smallest in three years.
But as layoffs, rather than risky mortgages, become the main reason that borrowers default on their home loans, foreclosures likely will remain elevated this year and into 2010. Many economists expect unemployment, now at 9.4 percent nationwide, to rise as high as 10 percent, and some project it will exceed the post-World War II record of 10.8 percent.
Foreclosure filings fell 6 percent in May from April, according to RealtyTrac Inc. More than 321,000 households received at least one foreclosure-related notice last month -- 18 percent more than a year earlier -- but the smallest annual gain since June 2006.
Despite the drop from April, it was the third-highest monthly rate since Irvine, Calif.-based RealtyTrac began its report in January 2005, and the third straight month with more than 300,000 households receiving a foreclosure filing.
To read the original article click here
Other Interesting news:
Vultures Descend on Mortgage Market
As noted in the Wall Street Journal this morning, an investment strategy that seemed like a slam dunk on paper --
Are subsidized mortgage rates coming?
With mortgage rates returning to levels seen before the Fed pledged to buy up billions in mortgage securities, it might be time to turn to a costly Plan B, subsidizing mortgage rates.
U.S. Takes On the Insular G.M. Culture
DETROIT — Fiat will set a new direction at Chrysler, which finished its tour through bankruptcy court Wednesday, completing its deal to join forces with the Italian automaker.
Emails Show Fed Pressed BofA to Do Merrill Deal
WASHINGTON--E-mails from Federal Reserve officials appear to back assertions by Bank of America Chief Executive Kenneth Lewis that he was under pressure, to the point of losing his job, to complete the purchase of Merrill Lynch, despite worries about its financial condition.
Retail Sales Rise 0.5% in May
Sales at U.S. retailers rose for the first time in three months in May as expected
On Thursday June 11, 2009, 7:57 am EDT
WASHINGTON (AP) -- The number of U.S. households on the verge of losing their homes dipped in May from April, and the annual increase was the smallest in three years.
But as layoffs, rather than risky mortgages, become the main reason that borrowers default on their home loans, foreclosures likely will remain elevated this year and into 2010. Many economists expect unemployment, now at 9.4 percent nationwide, to rise as high as 10 percent, and some project it will exceed the post-World War II record of 10.8 percent.
Foreclosure filings fell 6 percent in May from April, according to RealtyTrac Inc. More than 321,000 households received at least one foreclosure-related notice last month -- 18 percent more than a year earlier -- but the smallest annual gain since June 2006.
Despite the drop from April, it was the third-highest monthly rate since Irvine, Calif.-based RealtyTrac began its report in January 2005, and the third straight month with more than 300,000 households receiving a foreclosure filing.
To read the original article click here
Other Interesting news:
Vultures Descend on Mortgage Market
As noted in the Wall Street Journal this morning, an investment strategy that seemed like a slam dunk on paper --
Are subsidized mortgage rates coming?
With mortgage rates returning to levels seen before the Fed pledged to buy up billions in mortgage securities, it might be time to turn to a costly Plan B, subsidizing mortgage rates.
U.S. Takes On the Insular G.M. Culture
DETROIT — Fiat will set a new direction at Chrysler, which finished its tour through bankruptcy court Wednesday, completing its deal to join forces with the Italian automaker.
Emails Show Fed Pressed BofA to Do Merrill Deal
WASHINGTON--E-mails from Federal Reserve officials appear to back assertions by Bank of America Chief Executive Kenneth Lewis that he was under pressure, to the point of losing his job, to complete the purchase of Merrill Lynch, despite worries about its financial condition.
Retail Sales Rise 0.5% in May
Sales at U.S. retailers rose for the first time in three months in May as expected
Wednesday, June 10, 2009
Was the TARP a Ruse?
Now for the punch line: It was all an elaborate ruse, a coverup of the fact that Citigroup was busted.
By Barry Ritholtz - June 9th, 2009, 10:00AM
The rush to repay TARP monies gives us another opportunity to consider why the hell this absurd financial giveaway ever happened in the first place. A close inspection suggests some dishonesty on the part of the prior Treasury Secretary.
From its inception, the TARP never made much sense. Forcing banks that did not need money to accept government bailouts was simply irrational.
The basis for the TARP went through several differing rationales — it began as a recapitalization of the major money center banks, then came the explanation of removing toxic assets, then it moved to freeing up credit and making banks lend again.
Its was $700 billion dollar pile of money in search of a justification for its existence.
Most people still look at TARP the wrong way. When trying to discern what the true basis of it was, we eliminated what made no sense whatsoever, and what was left were a few strange ideas. When you eliminate the impossible, what’s left, no matter how improbable, becomes the best explanation.
What was that explanation? In Bailout Nation, we discuss the possibility that The TARP was all a giant ruse, a Hank Paulson engineered scam to cover up the simple fact that CitiGroup (C) was teetering on the brink of implosion. A loan just to Citi alone would have been problematic, went this line of brilliant reasoning, so instead, we gave money to all the big banks.
You can read the original article here
By Barry Ritholtz - June 9th, 2009, 10:00AM
The rush to repay TARP monies gives us another opportunity to consider why the hell this absurd financial giveaway ever happened in the first place. A close inspection suggests some dishonesty on the part of the prior Treasury Secretary.
From its inception, the TARP never made much sense. Forcing banks that did not need money to accept government bailouts was simply irrational.
The basis for the TARP went through several differing rationales — it began as a recapitalization of the major money center banks, then came the explanation of removing toxic assets, then it moved to freeing up credit and making banks lend again.
Its was $700 billion dollar pile of money in search of a justification for its existence.
Most people still look at TARP the wrong way. When trying to discern what the true basis of it was, we eliminated what made no sense whatsoever, and what was left were a few strange ideas. When you eliminate the impossible, what’s left, no matter how improbable, becomes the best explanation.
What was that explanation? In Bailout Nation, we discuss the possibility that The TARP was all a giant ruse, a Hank Paulson engineered scam to cover up the simple fact that CitiGroup (C) was teetering on the brink of implosion. A loan just to Citi alone would have been problematic, went this line of brilliant reasoning, so instead, we gave money to all the big banks.
You can read the original article here
Tuesday, June 9, 2009
FTC Testifies on Efforts to Combat Foreclosure Rescue and Loan Modification Scams
Is this as big of a problem as they would like for us to believe?? To identify only eleven in over a year's time frame doesn’t seem to warrant an “intensified” effort to me. What do you think?
"The Federal Trade Commission today told the U.S. House Subcommittee on Housing and Community Opportunity of the Committee on Financial Services that, with the rapid increase in mortgage delinquencies and foreclosures, the FTC has intensified its efforts to protect consumers from foreclosure rescue and loan modification scams. The FTC also recommended legislative and other remedies to enhance the agency’s effectiveness."
Read more here…
Check out this site too
"The Federal Trade Commission today told the U.S. House Subcommittee on Housing and Community Opportunity of the Committee on Financial Services that, with the rapid increase in mortgage delinquencies and foreclosures, the FTC has intensified its efforts to protect consumers from foreclosure rescue and loan modification scams. The FTC also recommended legislative and other remedies to enhance the agency’s effectiveness."
Read more here…
Check out this site too
Monday, June 8, 2009
Stocks fall ahead of gov't report card on banks
I keep hearing about how banks want to pay back the government some of the bailout monies they have received and the government has refused it. That has always puzzled me, especially since our government can’t explain where all of the money has gone. Maybe that’s the problem, accounting???
Stocks slip ahead of decision on which banks can repay bailout funds; European markets drop
Stephen Bernard, AP Business Writer
On Monday June 8, 2009, 9:58 am EDT
NEW YORK (AP) -- Investors turned away from stocks ahead of the latest government report card on banks.
"Stocks fell Monday, sending the Dow Jones industrial average down by about 100 points. Overseas markets also pulled back.
The government is expected to announce as early as Monday which banks will be allowed to return bailout funds. JPMorgan Chase & Co., Goldman Sachs Group Inc. and American Express Co. are expected to get approval to repay their loans, according to The Washington Post."
For more click here
Stocks slip ahead of decision on which banks can repay bailout funds; European markets drop
Stephen Bernard, AP Business Writer
On Monday June 8, 2009, 9:58 am EDT
NEW YORK (AP) -- Investors turned away from stocks ahead of the latest government report card on banks.
"Stocks fell Monday, sending the Dow Jones industrial average down by about 100 points. Overseas markets also pulled back.
The government is expected to announce as early as Monday which banks will be allowed to return bailout funds. JPMorgan Chase & Co., Goldman Sachs Group Inc. and American Express Co. are expected to get approval to repay their loans, according to The Washington Post."
For more click here
Saturday, June 6, 2009
ALL BUSINESS: Bond-market rout lifts mortgage cost
We've been hearing a lot about bonds lately. Read this article by Rachel Beck found on google...
By RACHEL BECK
NEW YORK (AP) — The Federal Reserve announced a $1.2 trillion plan three months ago designed to push down mortgage rates and breathe life into the housing market.
But this and other big government spending programs are turning out to have the opposite effect. Rates for mortgages and U.S. Treasury debt are now marching higher as nervous bond investors fret about a resurgence of inflation.
That's the Catch-22 threatening to make an awful housing market potentially worse and keep the economy stuck in a funk. Kick-starting the economy requires higher spending, but rising rates mean fewer Americans will be able to refinance their home loans. And some potential buyers will be shut out of the market by higher monthly payments they won't be able to afford.
To understand how this is all connected, you have to think like a bond trader. Inflation is their enemy because it means the purchasing power of the dollars they receive when bonds eventually are paid off will be diminished. The only question is by how much.
To view the entire article click here
By RACHEL BECK
NEW YORK (AP) — The Federal Reserve announced a $1.2 trillion plan three months ago designed to push down mortgage rates and breathe life into the housing market.
But this and other big government spending programs are turning out to have the opposite effect. Rates for mortgages and U.S. Treasury debt are now marching higher as nervous bond investors fret about a resurgence of inflation.
That's the Catch-22 threatening to make an awful housing market potentially worse and keep the economy stuck in a funk. Kick-starting the economy requires higher spending, but rising rates mean fewer Americans will be able to refinance their home loans. And some potential buyers will be shut out of the market by higher monthly payments they won't be able to afford.
To understand how this is all connected, you have to think like a bond trader. Inflation is their enemy because it means the purchasing power of the dollars they receive when bonds eventually are paid off will be diminished. The only question is by how much.
To view the entire article click here
Tuesday, June 2, 2009
Geithner tells China its dollar assets are safe
The students in China found our Timothy Geithner funny as he tries to convince them that their investment in our economy is safe...
Mon, 01 Jun 2009
From Reuters: Geithner tells China its dollar assets are safe “Chinese assets are very safe,” Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980’s. His answer drew loud laughter from his student audience, reflecting skepticism in China about the wisdom of a developing….click here for the original story.
Mon, 01 Jun 2009
From Reuters: Geithner tells China its dollar assets are safe “Chinese assets are very safe,” Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980’s. His answer drew loud laughter from his student audience, reflecting skepticism in China about the wisdom of a developing….click here for the original story.
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