Stocks are up (Dow +62, S&P +9) and bonds are down (FNMA 3.5% coupon -20 basis points, 10yr yield 1.96) today as jobless claims were lower a second week and European Central Bank President Jean Claude Trichet offered new support for the debt crisis in Europe: the ECB will buy covered bonds and extend bank
Covered Bonds
Occasionally I am asked, “How safe is the mortgage interest tax deduction?” In the past I was much surer of my answer (“Safe – what politician wants to take away even one of the advantages of home ownership?”), but ongoing talk of ending this homeowner tax benefit makes me think twice. Whether eliminating it for
Facebook Worth $50b After Goldman Deal While everyone was working up clever holiday status updates on Facebook, the company was working up a deal with Goldman Sachs that places its value at $50b. NYT Dealbook’s report on the topic also previews the year’s hottest tech companies, and StockTwits $FBOOK feed will keep you up to
How Many Can Refi vs. How Many Qualify There was a story in the Wall Street Journal wondering “But if rates are so low, why isn’t demand for new loans picking up? For one, most borrowers who could refinance probably did so last year, when rates fell below 5% in March, August, and December. Many
What Are Covered Bonds, And Can They Help Housing? Lately there has been some talk in the investor community about using covered bonds to supplement or replace mortgage-backed securities, therefore helping the secondary market for mortgages, which in turn would help originators. What is a “covered bond”? In this case, covered bonds are debt securities
Fed chairman Ben Bernanke, speaking at a conference in Berkeley today, reminded people that without government-backed Fannie Mae and Freddie Mac, there wouldn’t be a mortgage securities market, and therefore lenders wouldn’t be able to clear their portfolios to make new loans. Fannie and Freddie have bought about 75% of all mortgages since the credit
The model of securitizing mortgages was born around the time of the S&L crisis and has spent the last 20 years building momentum. The problem was that the so-called high-yield mortgage backed securities were constructed from subprime loans … only they received A-paper credit ratings on a relative basis. For example subprime mortgage backed securities
HR 3221, The Foreclosure Prevention Act of 2008, passed the House of Representatives Thursday, July 24 and passed the Senate Saturday, July 26 by majority votes—the president is expected to sign it into law this week. Below are highlights of the 694-page bill that are most relevant for consumers. No More $729,750 Conforming Loans As