Mortgage Fraud
US attorney is on the hunt for mortgage scoundrels. He is promising “dramatic results,” but I am skeptical about making mortgage application fraud stick to these former high-flying executives. Mortgage applications were worked and approved at very low levels within these organizations.
Loan origination strategies and behaviors were managed with commission plans and production quotas–making proving high-level, endemic fraud very hard to prove.
Banks Borrow Record Fed Funds
Banks reach record levels of Fed borrowing. Taking $437.5 billion per day from the Fed lending window may threaten to “disintermediate the banking system.” Question: Will banks be able to ween from this cheap, stable short-term lending facility and get back to a healthy inter-bank lending system?
Housing Starts Down
Finally, some indication we are clearing out housing inventories. Housing starts down 6.3 percent, a 17 year low. Bad for home builders, but a start for homeowners to hit a floor on their descending home prices. Here is another strong trend and strategy on how to create a floor in local housing prices–Prince William County (Northern Virginia) a bustle with real estate investor buying.
Bush and Buffett Selling Confidence
President Bush speaks this morning in a continued effort to sell the US government efforts at stabilizing the economy. Meanwhile, Warren Buffett stumps for his spot as Treasury Secretary in an Obama Cabinet with a NYTimes Op-Ed–Buy American. I Am.
About Bill Rice