Tag Archives: interest rate risk

So What If We Lose The Fixed-Rate 30 Year Mortgage?

Life doesn’t always go the way I want either. Oy, I often feel like I am spending most of my spare time chasing my tail. Yesterday, I spent two hours trying to fix a clunky key on this new keyboard … Continue reading

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What Is Securitization?

The biggest reason loans are hard to get these days is that nobody wants to buy securities backed by American home mortgages, unless those mortgages are guaranteed by the U.S. government. Wikipedia says: “Securitization is the financial practice of pooling … Continue reading

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No Government Intervention In The Housing Market Would Mean The Demise Of The 30-Year Mortgage

Banks won’t lend money for 30-year mortgages without government guarantees. Such loans without guarantees would gum up the bank works. They’d be in danger of interest rates rising, devaluing the loan and turning it into a money loser. They are … Continue reading

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What To Do With Fannie/Freddie?

Joe Nocera writes: Whenever the mortgage finance giants, Fannie Mae and Freddie Mac, find themselves in a tough spot — and boy, are they in a tough spot now! “We exist to expand affordable housing,” says Fannie Mae on its … Continue reading

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New Mortgage Insurance Cuts Costs

From the Daily Herald.com: Investors in mortgages face two kinds of risk from borrowers who default. On loans with small down payments on which the collateral risk is the highest, private mortgage insurance is available to protect investors. Investors also … Continue reading

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Mortgage-Backed Bonds Suffering

From REUTERS: Falling home prices and tighter credit conditions have sharply slowed some payments from MBS to investors, turning the bonds into longer term investments that carry more interest-rate risk. A 20 percent drop in May prepayments sharply exceeded expectations, … Continue reading

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