Monthly Archives: August 2008

Housing Market Crumbles

From the BBC: Shares in US mortgage finance giants Freddie Mac and Fannie Mae have plunged again on fears that the government will be forced to bail out the pair. The slide reignited concerns about the health of the financial … Continue reading

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Managing Extreme Risk

From FT.com: It feels as though financial extremes have become everyday occurrences. Damaged financial markets attempting to recover from the subprime mortgage crisis may be destined for more turbulence. Nevertheless management of extreme risk remains outside the scope of current … Continue reading

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Five Key Answers On The Housing Relief Act

From AZCentral.com: Answer: The law’s most far-reaching provision gives financial assistance to the government-sponsored Federal National Mortgage Association and Federal Home Loan Mortgage Association, which own or insure nearly half of the roughly $12 trillion in U.S. mortgage debt. Both … Continue reading

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Reverse Mortgage Update

Emily Brandon writes: The housing bill signed by President Bush on July 30 raises the amount seniors can borrow using federally backed reverse mortgages and lowers the cost of getting the cash. A reverse mortgage is a loan against your … Continue reading

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Why Did Fannie Mae Pursue Subprime Loans?

From the Washington Post: Discussing the company’s successes, Mudd said one of Fannie Mae’s achievements in 2006 was expanding its involvement in the market for subprime and other nontraditional mortgages. A month later, Fannie Mae outlined plans to further expand … Continue reading

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Liar Loans Lengthen Mortgage Misery

Alan Zibel writes: In the mortgage industry, they are called "liar loans" — mortgages approved without requiring proof of the borrower’s income or assets. Many homeowners with liar loans are stuck. Losses on liar loans could total $100 billion, according … Continue reading

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NYT Profiles Dr. Doom

Stephen Mihm writes: On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. When the economist Anirvan Banerji delivered … Continue reading

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Mortgage Perks For Sen. Dodd

Kevin Rennie writes: No wonder Sen. Christopher Dodd won’t release documents related to the $800,000 in cut-rate mortgages he got in 2003 from Countrywide Financial, once the nation’s largest mortgage lender. The primary cause of the collapse of the mortgage … Continue reading

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Shopping For A Loan

Carolyn Warren writes in her book Mortgage Rip-Offs: The high-priced loan officer whispered to me: "The people we get frustrated with are the ones who actually know something about loans." Here are some bad ideas: * Shoppping for the best … Continue reading

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Hard & Soft Prepayment Penalties

Carolyn Warren writes in her book Mortgage Rip-Offs: A hard prepayment penalty means you’ll pay the full amount, whether you refinance or sell your house. A soft prepayment penalty means you only have to pay it if you refinance away … Continue reading

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