On the possibility of Fannie and Freddie going away, one clever rep wrote to me and asked, “Do we really need FNMA, FHA, and FHLMC when it is all government run anyway? They could start a new entity named “Federally Regulated Committee to Normalize Mortgage Securities”, or “FRCNMS” – pronounced “FRICKEN MESS”. IRS Definition of
January 2010
Lots of headlines have already screamed today that existing home sales fell 16.7% in December, but a few key longer-term data points were absent from most media reports, so those key details on home sales are below, and tomorrow we’ll have the S&P Case Shiller report of national home prices. After existing home sales for
Replace Fannie/Freddie? In the current environment, the government giveth, and the government taketh away. Barney Frank once again made headlines last week with the statement that the House Financial Services Committee will recommend doing away with Fannie Mae and Freddie Mac and “rebuilding the U.S. housing-finance system from scratch”. “A whole new system of housing
Rate & Market Update Rates dropped for the second week in a row bringing rates close to all time record lows set April and November 2009. The official report on rates isn’t relevant for consumers because it’s published by Freddie Mac a week late (so this week’s rates will be published January 28), but markets
Below is a bulleted list of new FHA guidelines we discussed earlier this week, and here’s the official HUD announcement. The FHA credit score changes don’t have a huge impact on most borrowers because the average FHA credit score is now 681 and median credit score in the U.S. is 720. These changes will take
This was week 55 of a mortgage bond purchase program by the Federal Reserve—here’s week 54. From January 14 to January 20, the Fed bought $12b net of mortgage bonds. This is just above the weekly low for the entire program set three weeks ago with $9.3b in net buys, and a trend is emerging
In Favor Of Bank Tax Yesterday I noted a few comments by Warren B. about the tax on banks. In an effort to give equal time, many feel that a bank tax is fine. They say that because the government is already giving the banks money at 0% and the banks are buying treasuries and
Bank stocks are taking the rest of the market down with them today following Obama’s bank regulation proposal announcement. He calls for an end to government backing for banks that engage in proprietary trading. His proposal would have to be approved by congress. Earlier today, Mike Konczal at NewDeal2.0 wrote a piece about the likely
Consumer Confusion Over Loan Disclosures One loan agent wrote and said, “This week we sat down with a borrower that is doing an FHA loan. The seller is paying all of the closing costs and as usual the borrower is financing the upfront MIP. Essentially the borrower is coming in with their 3.5% down payment.
Below is a bulleted list of the FHA guidelines that were discussed in our DailyBasis post today. The FHA credit score changes don’t have a huge impact on most borrowers because the average FHA credit score is now 681 and median credit score in the U.S. is 720, but the increase in mortgage insurance premiums
Buffett Warm On Housing, Cold On Bank Tax Berkshire Hathaway has big stakes in Wells, Goldman, BofA. These firms fall under Obama’s bank tax.
The US Producer Price Index, which measures inflation at the business and manufacturing levels of the economy, was 0.2% in December and 4.4% year-over-year through December. Excluding volatile oil and food costs from the readings, “Core” PPI for December was 0% and 0.9% YOY through December. These monthly “All” and “Core” numbers were lower than
Warren Buffet Quote on Bank Tax In an interesting quote, Warren Buffett weighed in on the plan to tax banks. “I don’t understand plans for a bank tax – it just doesn’t make any sense to me that banks should be taxed to cover losses at other bailed-out companies, such as automakers, Fannie Mae, or
There’s constant debate about whether inflation will become too much to bear in the wake of massive Fed stimulus. We’ve generally supported the argument that inflation will become an issue, but also said that the Fed has tools to control it if they have the political will. This weekend, Harvard Economics professor Gregory Mankiw wrote
‘The Situation’ On Jersey Investment Fraud If you ever thought Jersey Shore’s Mike “The Situation” Sorrentino was giving Jersey a bad name, consider this situation: Last week in New Jersey Wayne D. Puff, who ran a huge Ponzi scheme from 1998 through 2005, was sentenced to 18 years in federal prison and ordered to pay
A price-to-rent ratio for housing is similar to a price-earnings ratio for stocks, and this measure of home values is preferred by most investment professionals because it measures the present value of future earnings. Even though many homebuyers live in the home and therefore earn no rent, a recent Economist housing report reconciles the owner-occupant
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