Monthly Archives: January 2012

FHA Needs A Bailout

The FHA stands for the Federal Housing Administration. It is instituting new rules to try to forestall an appeal to Congress for a bailout. The FHA wants to force banks to buy back thousands of troubled mortgages. Kevin Chiu reports: … Continue reading

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The More Relief You Give To Those With Troubled Mortgages…

…the more you soak taxpayers. The more relief you give to those who’ve made bad decisions, the more you take from those who made responsible decisions. The more bailouts you give, the more you reduce moral hazard, aka the incentive … Continue reading

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Mortgage Insurers Face More Losses

The mortgage insurance industry has taken a big hit over the past five years and now the credit ratings on several big firms have been downgraded. Home prices have dropped each of the past three months. We are nowhere near … Continue reading

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Will The Federal Government Bail-out Irresponsible Home Owners

The Barack Obama administration is looking at ways to subsidize mortgage giants writing down mortgage principal. Republicans say this reduces moral hazard. Where are the incentives to be careful if your bad decisions are subsidized? The WSJ reports: Sen Bob … Continue reading

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Freddie Mac Bets Against Homeowners

When the government owns or controls more of the economy, different parts of the government start working against each other. Freddie Mac has an incentive to reduce its losses and its taxpayer bailouts. The wider economy has an interest in … Continue reading

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Obama’s Plan To Expand Mortgage Refinancing Seems Like A Political Statement

Investors in mortgage-backed security bonds regard President Obama’s plan to expand mortgage refinance as more of a political theater rather than an economic reality. Significant parts of the president’s plan would need congressional approval and that is unlikely to happen … Continue reading

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Weak Demand For Mortgage Loans

Mortgage loans dropped 20% last year and demand remains low. This puts particular pressure on Bank of America and Wells Fargo who have a disproportionate amount of their investments in mortgages. Bank stocks are down. Banks are under pressure to … Continue reading

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The Booming Business Of Online Mortgages

The housing market and the mortgage market are in a downturn. This has gone on for five years and there’s no relief in sight. There’s never been anything like it since the Great Depression. Our economy is in its worst … Continue reading

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President Obama Extends HAMP For A Year

About one-fifth as many homeowners got help from HAMP as was expected so the Obama administration is extending the program for a year. All these attempts to interfere with the free market only delay the recovery of the housing market. … Continue reading

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Household Debt Falls

Two-thirds of the 4% decline in household debt since the recession hit in 2007 has come from home foreclosures. People have walked away from ownership of assets such as homes they could no longer afford. Here’s more: Well $363 billion … Continue reading

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