Housing: Team Obama plans to ‘poll’ Americans to see what we want to do with Fannie, Freddie? Where is the leadership?! plus Ben Bernanke testifies before JEC…

Update: Ahh HousingWire says they are taking responses to their poll via the Register first. Team Obama’s answer for everything is a meeting, a poll, a panel, typical faculty lounge stuff, lol

The administration said it will first seek public response via the Federal Register listed at regulations.gov. The administration will then hold a series of public forums on housing finance reform.

Update: HousingWire has the details on the ‘poll’ Team Obama plans to take, what a disgrace! Should have and still should just do HOLC, but then Credit Suisse and UBS might take a loss, Gawd Forbid, but it is fine if taxpayers shoulder it, I call shenanigans….

The Obama Administration today puts the public behind the mic on the reform of the US housing finance system, including Fannie Mae and Freddie Mac. A list of questions published today targets the opinions of mortgage market participants, industry groups, academic experts and consumer and community organizations, according to an e-mailed statement from the US Treasury Department.

Here is the Treasury Press Release:, they do not list where to send your input, lol, but here is their contact info:

http://www.ustreas.gov/contacts.shtml

Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

General Information: (202) 622-2000
Fax: (202) 622-6415

7:23: Shaun Donovan (HUD Sectry) says he does NOT believe the stress on housing affordability fueled the crisis and that it was vagueness in the programs that was a problem. Oh boy.

Ed Royce R-CA is disputing this and citing Geithner’s previous testimony that the GSEs used the affordability mandates to buy bad loans…well yeah!

Okay we’re 20 mins in and it’s a smack down, you must watch this hearing!

now Mel Watt D-NC is talking up low income rental housing and the GSE roles in that. This is one of Barney Frank’s pet plans. I have long said they will take these foreclosed homes and convert them to Section 8 after families lose them. Unreal.

7:20 am AZ time: Watch the hearing live now here

ZOMG!! BUY A FRAKKIN CLUE TEAM OBAMA!!!! Lordy, Lordy..I thought these guys were SOOPER GENIUSES who had a plan before he even took office!

Now we have an uncapped FAN FRED FHA debt growing exponentially and they want to take a frakkin poll? Are you frakkin kidding me?!

The hearing with the House Financial Services Cmte has begun and Spencer Baucus R has nailed the issue-

Ranking Member Spencer Bachus gives opening remarks at a Financial Services hearing on the future of housing finance, where the Obama Administration failed to provide a plan for reforming Fannie and Freddie.

If that hearing doesn’t terrify you, see Ben Bernanke live here before the Joint Economic Cmte suddenly acknowledging we have a serious fiscal crisis and need immediate action, funny he didn’t say that before they rammed down the Obamacare bill huh? frakker.

April 14, 2010. Tags: , , , , , , , , , , , , . Politics. 1 comment.

Housing Update: Barney Frank and James Lockhart (former head of FHFA) on Fannie Freddie Bailouts

Vodpod videos no longer available.

Vodpod videos no longer available.

James Lockhart (Dubyahs head of FHFA) of all people calls for principal reductions on CNBC this morning and Barney Frank D-MA said it will not happen..Through the Looking Glass…

James Lockhart, former head of the Federal Housing Agency, told CNBC Tuesday that he wants more generous mortgage modifications, including principal payment reductions.

…Although the latest Case-Shiller Index indicates the housing market has been improving for the last five months, there could be another spike in foreclosures, said Lockhart. While banks and investors have already marked down mortgages on their books, he said, that benefit has not yet been passed onto homeowners….

…“We still haven’t seen the falloff in foreclosures,” he said. “All the solutions have been on the income-side, and people’s balance sheets are suffering. It’s coming to the point where I think we really have to consider much more aggressive [loan modifications and] at looking at reducing principals.”

Lockhart also expects strategic defaults will start to occur more frequently. “You look at the bankruptcy numbers; the stigma is not there anymore,” he said….

Rep. Kucinich D-OH has called for an investigation into what looks to everyone like a backdoor TARP...

…Representative Dennis Kucinich, an Ohio Democrat who was an early opponent of Obama in the 2008 presidential race, thinks the move is backdoor way to help banks, and a congressional subcommittee he leads is investigating the Treasury’s decision to cover unlimited losses at the housing finance companies.

“This new authority must be used responsibly and for the benefit of American families,” Kucinich said. It “cannot be used simply to purchase toxic assets at inflated prices, thus transferring the losses to the U. S. taxpayers and acting as a backdoor TARP.”

That’s exactly what Treasury is doing, says Dean Baker, co-director of the Center for Economic Policy Research in Washington. “This looks like the original TARP,” Baker said, referring to $700 billion financial rescue fund, known officially as the Troubled Asset Relief Program.

Waxman and Issa also ‘concerned’

…Kucinich is not the only one on Capitol Hill up in arms. House Energy and Commerce Committee Chairman Henry Waxman, a California Democrat, said he doesn’t like the idea of a “blank check” for Fannie and Freddie.

And Darrell Issa, the top Republican on the House Oversight and Government Reform Committee, called it “a continuation of the bailout policies that have mortgaged away the future solvency of our country.”…

more about “Housing Update: James Lockhart (forme…“, posted with vodpod

January 5, 2010. Tags: , , , , , , , , , , , , , , . Politics. Comments off.

Meredith Whitney on the new normal & Fed exit from MBS purchases, its impact on banks, housing…

MEREDITH WHITNEY

Meredith Whitney - Photo: Bloomberg News

Update 2: Bloomberg on Whitney’s call:

The S&P 500 Financials Index slumped 1.5 percent, the most among 10 industries, after the House vote and as analyst Meredith Whitney said the biggest U.S. banks may face declining values on home-loan bonds with government backing as the Fed prepares to end its $1.25 trillion purchase program.

Bank of America Corp., JPMorgan Chase, Citigroup and Wells Fargo increased holdings of so-called agency mortgage-backed securities by 44 percent from the third quarter of 2008 to the second quarter of 2009, Whitney said in a note yesterday to investors. Those increases came as the Fed began buying securities backed by Fannie Mae, Freddie Mac and Ginnie Mae in an attempt to keep mortgage rates low and spur housing demand, she wrote.

JPMorgan fell 1.2 percent to $42.21, while Wells Fargo slid 3.1 percent to $26.82 and Citigroup lost 1.7 percent to $3.97.

Update: Ms Whitney wrote an excellent op ed in the WSJ last month outlining what we can expect in the financial sector and consumer going forward. Read it here.  ‘Main Street represents the foundation of this country. Reviving it should take priority over any regulatory reform or systemic overhaul.’

Meredith Whitney is IMO the best bank analyst on the street bar none.

She put out two notes to clients last night, ABSOLUTE MUST READS:

1) Ain’t Gonna Happen, where she argues that “normalized” earnings for banks is a fallacy, that it’s more likely we will see protracted consumer deleveraging, fewer consumers who qualify for credit, and dramatic regulatory change, which will negatively impact earnings for a protracted period, and

2) The Great Exit: The Biggest Market & Bank Risk Over the Next Four Months, a long note on the importance of the Fed’s agency MBS purchase program, where she argues that uncertainty over when the program will end (now scheduled for end of Q1 2010), and who the substitute buyer for the Fed will be, means that “prices will go down meaningfully and rates will go up meaningfully.” She argues that it is possible the mortgage market will again shrink notably: “We believe this represents one of the larger risks to the banks and overall market over the next several months.”

November 4, 2009. Tags: , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Politics, Unemployment Statistics, Wall St. Comments off.

Housing Update: Median Home Price drops 16.8% y/y….MBA makes 700B downward revision to ’09 originations forecast…

Ouch: National Median Home Price at $173,000 for May, a drop of 16.8% year over year….May existing home sales up 2.4%, same as April….much lower than needed for this inventory, especially since roughly 45% of the sales are foreclosure sales to investors….dollar is extending its losses and markets are down, DOW off 40 now to 8298….10 yr yield 3.63%….Gold 918….Oil down to 67…

So taking a closer look at the incredible revisions by MBA yesterday, it appears as though the Making Home Affordable Program has been a failure to date. Not the EPIC FAIL of Hank Paulson’s original plan, but a FAIL nonetheless….

MBA dropped the hammer on the outlook yesterday:

…The Mortgage Bankers Association cut its forecast of home-mortgage lending this year by 27% amid deflating hopes for a boom in refinancing. The trade group said Monday that it now expects $2.034 trillion of originations of mortgages for one- to four-family homes in 2009, down from a forecast of $2.780 trillion in March, when falling interest rates spurred expectations for huge volumes of refinancing….

Here are the numbers, of the millions of homeowners facing foreclosure, a grand total of 13,000 loans have been modified/refi’d. Yep.

WSJ:

…Meanwhile, the MBA said, the volume of refinancing under the Obama administration’s Home Affordable Refinance Program so far has been “very low.” This program is designed to help borrowers whose loans are backed by government-owned investors Fannie Mae and Freddie Mac, the biggest providers of funding for U.S. mortgages.

“While the number of loans completed under this program is likely to increase, it is difficult to craft a scenario under which origination volumes would come anywhere close to reaching the numbers originally envisioned for the program, particularly under our higher rate environment,” the trade group said.

So how low is it? Let’s check in on the housing beat with Diana Olick of CNBC who has the real scoop:

…Today the Mortgage Bankers Association put out a revision in its 2009 originations forecast. A big revision. A $700 billion revision. “$84 billion of the drop is due to lower purchase originations and the rest is due to lower rate/term refinances and very low volumes in the Fannie Mae and Freddie Mac Home Affordable Refinance Program (HARP).”

…The MBA had raised its forecast by over $800 billion in March following the drop in interest rates associated with the Fed’s announcement on the Treasury bond and mortgage-backed securities purchases programs as well as the implementation of the HARP….

……The refi’s dropped off for two reasons, one being the interest rate rise, and the second being the poor results on the HARP….While generally accepted estimates were that around 1.5 to 2 million borrowers might avail themselves of this program, with many more potentially eligible, to date only about 13,000 loans have been completed, notes the MBA’s chief economist, Jay Brinkmann.

Did anyone else catch Larry Kudlow get curt and rather harsh with Diana on The Call last week? Diana makes it clear in this blog report her position and reporting on the housing market is based on the facts, not the ‘Goldilocks wannabe green shoots’ scenario we all know Larry wants to find…..the harsh  reality of our housing market, and it is pretty damned harsh here in AZ lemme tell ya:

A lot of folks out there contend that I am overly bearish on the beat I cover. Some go so far as to call me “miserable,” while others claim I choose to see the glass half empty. I am and do neither. I’m not a bear; I’m a realist. It’s your right to have an opinion, but it’s not my job. My job is to gather for you and funnel to you the facts: The numbers, the trends, the industry forecasts and the experts’ analyses. I have no agenda and frankly gain nothing from being either a bull or a bear. If anything, I’d be better off personally as a housing bull. CNBC doesn’t allow me to own stock, but I can own a house, and I do. If you think housing has bottomed, that’s your opinion, but that’s just what it is: Opinion.

June 23, 2009. Tags: , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Music. Comments off.

Updated: Housing Update: More Details Released…

UPDATE: Treasury increases commitment to Fannie and Freddie from $200b to $400b, now they each get 200 billion..

Obama Housing plan will establish a 10 billion insurance fund to ‘discourage foreclosure’

Treasury will establish uniform guidance for mortgage modifications…all future recipients of TARP money REQUIRED to implement loan modification plan

CNBC Steve Liesman breaking it now…

According to Treasury plan includes: Plan to help 4-5 million homeowners refinancing plan

ADDITIONAL PLAN THIS IS NEW!!: Treasury to help fund principal writedowns?? need details there..more than expected

75 billion  homeowner stability initiative to reach an additional 3-4 million at risk homeowners supporting low interest rates by increasing confidence in Fannie and Freddie…

Homeowner Stability Initiative aimed at those who ‘commit to making reasonable monthly mortgage payments’..

Obama plan promises, “no aid for speculators”..

Aimed to help households ‘at risk’ who are current in payments..

Many incentives built into the plan for servicers and lenders to get on board says Steve…

Lenders under Homeowner Stability Initiative will bring down payments to 38% of borrowers income TOLD YA!! That is Sheila Bair’s plan right there…THEN the government would match further reductions down to 31% of the borrowers income…

a low interest rate must be in place for 5 year after which it can gradually be raised to market rates, UH OH THAT IS A TEASER NO NO NO!!!! WTH do they want more ARMS this will lead to waves later, oh good gawd!!!

Treasury will share in the cost of reducing principal on mortgage, need details there!!

Incentives:  Servicers receive $1000.00 upfront fee for each modification and success fees for keeping borrowers current, 1k a year for 3 years.

additional fees for servicers who get mortages modified before default….

February 18, 2009. Tags: , , , , , , , , , , , , , , , , . Economy, FDIC, Finance, Foreclosures, Housing, Obama Administration, Politics, TARP, Uncategorized, Unemployment Statistics, Wall St. 1 comment.

Is MS’ QE2 refi for all on the way or is Ben blowing sunshine up our axxes?

So is QE2, (the quantitative easing not the ship), on the way or is Ben blowing sunshine and/or smoke up our axxes again?

CaculatedRisk:

From Fed Chairman Ben Bernanke: Challenges for the Economy and State Governments

On the economy:

While the support to economic activity from stimulative fiscal policies and firms’ restocking of their inventories will diminish over time, rising demand from households and businesses should help sustain growth. In particular, in the household sector, growth in real consumer spending seems likely to pick up in coming quarters from its recent modest pace, supported by gains in income and improving credit conditions. In the business sector, investment in equipment and software has been increasing rapidly, in part as a result of the deferral of capital outlays during the downturn and the need of many businesses to replace aging equipment….

UHHH come again? Exsqueeze me? Increased consumer INCOME???? consumer spending?? Have you SEEN the savings rate and the PCE?

Memo to Ben: Wishin’ and hopin’ and thinkin’ and prayin’ is NOT an economic strategy! Give us Growth or tell the SOOPERGENIUSES in the WH to get the hell out of the way!

Ben continues~(…) To be sure, notable restraints on the recovery persist. The housing market has remained weak, with the overhang of vacant or foreclosed houses weighing on home prices and new construction. Similarly, poor economic fundamentals and tight credit are holding back investment in nonresidential structures, such as office buildings, hotels, and shopping malls.

Importantly, the slow recovery in the labor market and the attendant uncertainty about job prospects are weighing on household confidence and spending. After two years of job losses, private payrolls expanded at an average of about 100,000 per month during the first half of this year, an improvement but still a pace insufficient to reduce the unemployment rate materially. In all likelihood, significant time will be required to restore the nearly 8-1/2 million jobs that were lost over 2008 and 2009. Moreover, nearly half of the unemployed have been out of work for longer than six months….

Why  yes!!!, that pesky LACK OF FRAKKIN JOBS is holding us back, just a WEE bit, mighty white of Ben to notice, pardon the pun, my days in the Bronx…

Let’s hope QE2 the MS way is coming (see excerpts and linky below), BTW guess who suggested this 1 pg refi for all??? JOHN MCCAIN IN 2008. yep.

The ONLY WAY IN HELL Ben’s forecast for ‘increased consumer spending and income!!!’ will materialize is if plans are in the works or about to be to launch the MS QE2 plan in which all Americans paying on time get an ‘instant 1 pg refi’ drop in their mortgages to market rates (which, following another buying binge by Fed would be 2.99% let’s say) in CONJUNCTION with cutting principle on the defaultees (this way the foreclosures will stop and the prices will stop dropping in housing) with the new rates for all! the larger group who pay on time wont be so pixxed since they get theirs too…

From the MS PDF-If it were possible to inject a significant amount of stimulus into the US household sector, and this stimulus had zero impact on the budget deficit, did not require an exit strategy, did not distort the markets, and took effect almost immediately, wouldn’t it seem like a slam dunk?
Such an option actually exists in the form of a change to
mortgage refinancing requirements. The Fed and
market forces have pushed mortgage rates to historic
lows, yet many homeowners are unable to take
advantage because they are blocked from refinancing.
This problem could be addressed if the Government
merely recognized its existing guarantee on the principal
value of a large part of the mortgage market – the
mortgages that are backed by Fannie, Freddie and
Ginnie – and acted to streamline the refi process.
There are 37 million mortgages outstanding whose
principal value is backed by the Federal government.
When these homeowners apply for a refinancing, the
application is subject to a standard underwriting process
that involves an LTV test (requiring a property appraisal),
an analysis of the borrower’s FICO score, and income
verification.
We estimate a potential average rate reduction of 125 bp on 50% of the outstanding volume of agency-backed mortgages. In the aggregate, the savings amounts to $46 billion per year. That’s more than the cost of the latest extension of unemployment benefits and more than taxpayers saved under the Make Work Pay tax
credits in the 2009 fiscal stimulus legislation.
The bottom line is that market conditions have created a
potential costless windfall that is not being used. There
is no need for a case-by-case analysis of a borrower’s
credit quality when the principal value of the mortgage is
already backed by the government.

…How Many Borrowers Could Be Impacted?
As seen in Exhibit 3, roughly half of all US households have a
mortgage. Of these 55 million households, 37 million have
mortgages whose principal value is already guaranteed by the
Federal government. Yet, when these homeowners apply for a
refinancing, the application is subject to a standard
underwriting process that involves an LTV test (requiring a
property appraisal), an analysis of the borrower’s FICO score,
and income verification. Obviously, the drop in home prices

during the past few years means that many borrowers will notmeet the LTV requirement – especially since there has been a significant tightening in the appraisal process according to press reports. Indeed, our housing analyst Oliver Chang estimates that more than one-third of all agency-backed mortgages outstanding now have an LTV above 80% (see Exhibit 2). Looking at the principal value of these mortgages, the proportion is even greater (a little above 40% of the total) because an outsized share are located in California, where property values are higher than the national average. There are probably an additional 10% or so of borrowers who don’t qualify for refinancing because of job loss or a low FICO score.
Thus, we believe that perhaps 50% of the outstanding principal value of agency mortgages may not be refi-able at present. As seen in Exhibit 4, this estimate is broadly consistent with actual versus predicted prepay9(ment speeds that currently prevail in the mortgage market. (go read the entire paper and how they propose this be addressed, seems a win/win to me)

but if they do not plan to do this then he is either totally disconnected or full of shxt and lying to us, neither is good…

August 2, 2010. Tags: , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, Politics, Popular Culture, TARP, Taxes, Unemployment Statistics, Wall St. 2 comments.

MiM meets Congressman Mitchell…

Rep. Harry Mitchell (D-AZ) School Flag Raising Ceremony

Rep. Harry Mitchell (D-AZ) School Flag Raising Ceremony

Congressman Harry Mitchell made an appearance at the flag raising ceremony for our elementary school this morning. Rep. Mitchell has not held any townhalls. He had 2 telephone townhalls but they were prescreened questions. We took the opportunity today to meet with the Congressman, express our opinions and objections to HR 3200. We made sure Rep. Mitchell knew we were 22 and 24 yr Dems most unhappy with the current trajectory of this Congress and WH and sick of the out of control spending.

(more…)

September 4, 2009. Tags: , , , , , , , . Politics. Comments off.

WH-OMB releases budget forecast adds another 2 TRILLION to deficit- from 7 T to 9 Trillion

grizzly1

Breaking on FOX:  A-HA!!!! This is EXACTLY what we figured, they were holding back the damn GINORMOUS DEFICIT HIT hoping to ram through Healthcare in July before this data came out.  Here is our post from July 20th outlining exactly this scenario. Frakkers. J’accuse!!!! They KNEW this was coming and were going full steam ahead (and still are) trying to add ANOTHER MASSIVE spending plan on TOP of this?? WTF?? Recall CBO said the BIG COSTS in the HR3200 health care bill are AFTER the 10 year mark…(deliberately built that way to try and escape notice of the general public, since the WH has to report a 10 yr window)…

Breaking on FOX NOW….

So much for the crystal ball.

In a report next week, the Obama administration will increase its 10-year budget deficit projection to roughly $9 trillion, an increase of about $2 trillion from the previous projection, a senior administration official told Reuters on Friday.

The 2010-2019 cumulative deficit projection replaces the administration’s previous estimate of $7.108 trillion, said the official, who is familiar with the plans.

“The new forecasts are based on new data that reflect how severe the economic downturn was in the late fall of last year and the winter of this year,” Reuters quoted the unnamed official as saying….

The media did a lot of hyping ahead of this release about how THIS YEARS deficit is actually lower than forecast. O-yay o-Yay. Sadly that is due to them not giving as many bailouts as projected (ie housing plan funds of 50 billion are still sitting, and Fannie and Freddie are waiting to ask for 30 billion more until after this deficit number was released (their last money grab was a mere 8 months ago), wouldn’t want to frak up all the projections in the same report would we? Might lead the public to think we are up a stream with a madman at the helm….

We get the CBO numbers next week, no wonder TOTUS is off the tv and going on vacation….

August 21, 2009. Tags: , , , , , , , , , , . Economy, Finance, Politics. 3 comments.

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