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• Why should you care about Fannie and Freddie?

  Posted Jul 16 2008, 07:48 AM by Todd Harrison
  Filed under: Banking, Citigroup, Housing, stocks, JPMorgan, economy, todd harrison
  Rating:

  Given the daily barrage of bad news about the credit crunch, the mortgage crisis and failing banks, you'd think things would be a lot easier for someone who actually wants to take out a simple home loan.

  As a matter of fact, just this morning you read an article about two mortgage companies, one with a name that sounds like what they call your grandmother at her retirement community, the other like some up-and-coming DJ. Fannie Mae and Freddie Mac, could that be it? They ran out of money, apparently, which could make it even harder for you to get a mortgage in the future.

  Harder? Is that some kind of cruel joke? How could taking out a mortgage be any more painful than it already is?   Read More...

  Discuss ( 5 comments) 2,550 Views Digg this | Email this | Link to this

• Let's fix the adjustable-rate mortgage

  Posted Dec 18 2007, 04:55 PM by Charley Blaine
  Filed under: Banking, Countrywide, Housing
  Rating:

  

  Here's hoping that, in the aftermath of the subprime-mortgage mess, someone comes up with some standard provisions for adjustable-rate mortgages that apply equally across the country, that everyone understands and that regulators actively and aggressively enforce.

  Otherwise, we'll have to go through the subprime mortgage crisis a third time.

  A third time? Yes, indeed. It seems to me that the subprime mortgage mess was created by a lot of people with short memories or no memories.

  In the early 1980s, as mortgage rates were jumping, the mortgage industry came up with a lot of new mortgages designed to make housing affordable. Many were just as goofy as the weird mortgages we've seen lately as the subprime crisis deepens. In fact, they look like old ideas, dusted off to solve a slightly different problem: how to deal with gigantic price increases.   Read More...

  Discuss ( 12 comments) 2,605 Views Digg this | Email this | Link to this

• Bernanke offers hints that the Fed may cut rates

  Posted Nov 29 2007, 04:54 PM by Charley Blaine
  Filed under: Investing, Banking, Housing

  

  The stock market may open cheerfully on Friday, courtesy of Federal Reserve Chairman Ben Bernanke.

  Speaking in Charllotte, N.C., on Thursday night, the Fed boss told his audience that "the current stresses in financial markets make the uncertainty surrounding the outlook even greater than usual." And he added, "We at the Federal Reserve will have to remain exceptionally alert and flexible as we continue to assess how best to promote sustainable economic growth and price stability in the United States."

  Already, financial commentators see those words, specially words like "alert" and "flexible" as strong suggestions that the central bank will be cutting rates again.

  • You can read the Bernanke speech here. The pertinent parts are, conveniently, at the beginning of the speech.

  Most of the players in the financial markets are absolutely convinced that the central bank will cut its key federal funds rate its Dec. 11 meeting. In fact, they see the fed funds rate, the rate that banks charge each other for overnight loans, falling from 4.5% now to less than 4.2% by January. The futures markets suggest the rate will drop to 3.5% by May.   Read More...

  Discuss ( 1 comments) 739 Views Digg this | Email this | Link to this