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Loan Modifications Getting Mixed Re-default Results

December 12, 2008 By 2 Comments
Sheila Bair FDIC

John Dugan, Comptroller of the Currency has people thinking about the potential risks of mortgage loan modifications. Releasing data earlier this week, Dugan revealed that over 50 percent of loan workouts re-default within the first six months. Meanwhile, FDIC Chairman Sheila Bair says, "not so fast, check your data." Bair points to how loan are modified as the key determinate of success. For example, lowering rates drops that re-default rate to 23 percent according to Credit Suisse survey. A … [Read more...]

Unemployment Jumps Up Again, Tech Sectors Turn to Lose

December 11, 2008 By Leave a Comment

US Jobless Claims Jumps 58,000 to 24 Year High. Tech Sector losses 34,000 contributing most of these losses November losses. … [Read more...]

Foreclosures Drop, False Promise

December 11, 2008 By Leave a Comment

Foreclosure Rates Down RealtyTrac reports a strong 7 percent drop in November foreclosure rates, but pause the rejoicing. There are lots of foreclosure abatement programs at work here. And there is emerging bad news on the loan modification front, OCC reports greater than a 50 percent redefault rate with six months. Delinquencies on loans not yet in the foreclosure process jumped to nearly seven percent in the third quarter, a record high, according to the Mortgage Bankers Association, Saccacio … [Read more...]

What Will Obama's Job Stimulus Plan Look Like?

December 11, 2008 By Leave a Comment

A great analysis and compilation of President-elect Obama's potential Job Stimulus Plan. What do you think it might include or should include? … [Read more...]

Mortgage Rates Up, Mortgage Applications Down?

December 11, 2008 By Leave a Comment
unemployed

Welcome to the unique conundrum of an economic mess we are in. Seems as though you solve one problem and you create more. Goes to my "too many artifical inputs, queers the economy" theory--okay so Adam Smith mentioned it first. Anyway, it looks like rising unemployment and tightening bank credit standards is working hard against the US Treasury plan to push mortgage rates to 4.5 percent, and maybe even 4 percent mortgage rates. MBA says mortgage applications drop 7 percent (17 percent for home … [Read more...]

Robert L. Johnson Announces Plan to Assist Homeowners with Mortgage Foreclosure Crisis; Proposal Seeks $1Billion from the Federal Government

December 11, 2008 By Leave a Comment

Private sector steps out to help modify mortgage loans. Robert L. Johnson proposes to work-out 200,000  mortgage loans a year. Leveraging $1 billion from th US government Johnson would raise another $7 billion in private funds--turning his minority-owned Union Trust Bank into Homeowners First Bank to solely distribute loan modification funds to mortgage servicers. … [Read more...]

Loan Modifications Could Present Constitutional Problems?

November 19, 2008 By Leave a Comment

Loan modifications are gaining a lot of momentum, both politically and within financial institutions themselves. Some economist are even coming to the conclusion that it is the fastest way to put a floor on housing prices, but could it raise Constitional dilemma? Daniel Alpert of the RGE Monitor does and interesting analytical piece, exploring the Constitutionality of mandatory loan modifications. … [Read more...]

Bair, Paulson Showdown Hits the (Public) Congressional Floor

November 19, 2008 By Leave a Comment
smackdown

We knew this was coming...the Bair/Paulson Smackdown. This is truly a rare event to watch two government agencies open up a public battle for power and leadership. The sides are aligned: Treasury Secretary Paulson/White House versus FDIC Chairman Bair (a Bush appointee)/Congressional Democrats. The strategy seems clear--Paulson is playing to hold the line for the next 9 weeks and Bair is playing for a longer term opportunity with the new Obama White House. Paulson stuck to his reversal in … [Read more...]

Unemployment Economic Edition

November 14, 2008 By Leave a Comment
unemployment

I though since our economy is (almost sequentially) taking us through a course in classic economic theory I would make today a deep dive on employment and its role in the economy. Economic Reading If you are looking to brush up on all of your economic classics I have assembled a great economics reading list. Or, if you prefer to have all the quintessential classic economic writings in one place I recommend Michael Lewis's The Real Price of Everything: Rediscovering the Six Classics of … [Read more...]

TARP Reversal, Mortgage Servicers on Hot Seat, China Rapidly Slowing

November 13, 2008 By Leave a Comment
hi-res-henry-paulson

TARP Reversal, Paulson ADHD? Paulson leads his dramatic redirection of the Trouble Asset Relief Program (TARP) with an adaption of John Maynard Keynes, “When the facts change, I change my mind – what do you do, sir?”: Treasury Secretary Henry Paulson, whipping out his dead economist quote book, used this gem from John Maynard Keynes to justify his bombshell Troubled Asset Relief Program update and redirection: "I will never apologize for -- for changing an approach or a strategy when … [Read more...]