Category : The 2009 Obama Administration Housing Amelioration Plan

Paul Krugman–Europe is An Impeccable Disaster

Financial turmoil in Europe is no longer a problem of small, peripheral economies like Greece. What’s under way right now is a full-scale market run on the much larger economies of Spain and Italy. At this point countries in crisis account for about a third of the euro area’s G.D.P., so the common European currency itself is under existential threat.

And all indications are that European leaders are unwilling even to acknowledge the nature of that threat, let alone deal with it effectively.

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Posted in * Economics, Politics, * International News & Commentary, --European Sovereign Debt Crisis of 2010, Credit Markets, Currency Markets, Economy, Euro, Europe, European Central Bank, France, Germany, Greece, Italy, Politics in General, Spain, The 2009 Obama Administration Housing Amelioration Plan, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

Report: Troubled Mortgages Still Plague Banks

The nation’s banks are holding a much higher rate of defaulted mortgages on their books than mortgage giants Fannie Mae and Freddie Mac, according to a report released Wednesday by the Office of the Comptroller of the Currency, which regulates national banks.

The report said that some 19.7% of mortgages held in banks’ portfolios were delinquent at the end of March. By contrast, nearly 6.8% of mortgages backed by mortgage giants Fannie Mae and Freddie Mac were nonperforming, and 11.4% of all mortgages that are serviced by banks.

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Posted in * Economics, Politics, Corporations/Corporate Life, Economy, Housing/Real Estate Market, The 2009 Obama Administration Bank Bailout Plan, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

Martin Feldstein–The Economy Is Worse Than You Think

Estimates of monthly GDP indicate that the only growth in the first quarter of 2011 was from February to March. After a temporary rise in March, the economy began sliding again in April, with declines in real wages, in durable-goods orders and manufacturing production, in existing home sales, and in real per-capita disposable incomes. It is not surprising that the index of leading indicators fell in April, only the second decline since it began to rise in the spring of 2009.

The data for May are beginning to arrive and are even worse than April’s. They are marked by a collapse in payroll-employment gains; a higher unemployment rate; manufacturers’ reports of slower orders and production; weak chain-store sales; and a sharp drop in consumer confidence.

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Politics in General, President Barack Obama, Senate, The 2009 Obama Administration Bank Bailout Plan, The 2009 Obama Administration Housing Amelioration Plan, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The Fiscal Stimulus Package of 2009, The Possibility of a Bailout for the U.S. Auto Industry, The U.S. Government

True Cost of Fannie, Freddie Bailouts: $317 Billion, CBO Says

The Congressional Budget Office (CBO) says the real cost of the federal government guaranteeing the business of failed mortgage giants Fannie Mae and Freddie Mac is $317 billion — not the $130 billion normally claimed by the Obama administration.

In a report delivered to the House Budget Committee on June 2, the CBO said a “fair value” accounting of guaranteeing the two defunct mortgage companies ”“ known as Government Sponsored Enterprises (GSEs) ”“ was more than twice as high as the Office of Management and Budget had accounted for.

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Posted in * Economics, Politics, Economy, Housing/Real Estate Market, Politics in General, The 2009 Obama Administration Housing Amelioration Plan, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

(WSJ) The Housing Illusion

The Obama Administration and Chairman Ben Bernanke’s Federal Reserve have bet on a recovery based on reflating asset prices with easy money, federal spending and temporary stimulus programs. Part of that bet was reflating the housing bubble.

The results are what we now see: higher stock prices for Americans lucky enough to own shares, but 2% growth and mediocre job creation, a housing recession stretching well into its fourth year, and soaring commodity prices that reduce real income growth.

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, Federal Reserve, Housing/Real Estate Market, The 2009 Obama Administration Housing Amelioration Plan, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Barry Ritholtz– TARP + GSE: $257 Billion in the Red

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Posted in * Economics, Politics, Budget, Economy, House of Representatives, Housing/Real Estate Market, Office of the President, Politics in General, President Barack Obama, Senate, The 2009 Obama Administration Bank Bailout Plan, The 2009 Obama Administration Housing Amelioration Plan, The National Deficit, The Possibility of a Bailout for the U.S. Auto Industry, The September 2008 Proposed Henry Paulson 700 Billion Bailout Package, The U.S. Government, The United States Currency (Dollar etc)

Peter Schiff: Home Prices Are Still Too High

From my perspective, homes are still overvalued not just because of these long-term price trends, but from a sober analysis of the current economy. The country is overly indebted, savings-depleted and underemployed. Without government guarantees no private lenders would be active in the mortgage market, and without ridiculously low interest rates from the Federal Reserve any available credit would cost home buyers much more. These are not conditions that inspire confidence for a recovery in prices.

In trying to maintain artificial prices, government policies are keeping new buyers from entering the market, exposing taxpayers to untold trillions in liabilities and delaying a real recovery. We should recognize this reality and not pin our hopes on a return to price normalcy that never was that normal to begin with.

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, House of Representatives, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Personal Finance, Politics in General, President Barack Obama, Senate, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Peter Wallison and Edward Pinto–How the Government Is Creating Another Housing Bubble

It is hard to believe, but it looks like the government will soon use the taxpayers’ checkbook again to create a vast market for mortgages with low or no down payments and for overstretched borrowers with blemished credit. As in the period leading to the 2008 financial crisis, these loans will again contribute to a housing bubble, which will feed on government funding and grow to enormous size. When it collapses, housing prices will drop and a financial crisis will ensue. And, once again, the taxpayers will have to bear the costs.

In doing this, Congress is repeating the same policy mistake it made in 1992. Back then, it mandated that Fannie Mae and Freddie Mac compete with the Federal Housing Administration (FHA) for high-risk loans. Unhappily for both their shareholders and the taxpayers, Fannie and Freddie won that battle.

Now the Dodd-Frank Act, which imposed far-reaching new regulation on the financial system after the meltdown, allows the administration to substitute the FHA for Fannie and Freddie as the principal and essentially unlimited buyer of low-quality home mortgages. There is little doubt what will happen then.

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Posted in * Culture-Watch, * Economics, Politics, Economy, House of Representatives, Housing/Real Estate Market, Law & Legal Issues, Office of the President, Politics in General, President Barack Obama, Senate, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

FT–Foreclosures spawn new attitude to ownership

Jeff Horton has a job, two cars and money in the bank. Yet, he stopped paying his mortgage a year ago. With shoddy documentation by mortgage lenders now delaying foreclosures across the US, Jeff thinks he will continue living for free for at least another six months, and probably longer.

The 33-year-old IT specialist is keen to put an end to his disastrous home purchase that will likely leave his bank with a loss of at least $100,000. Until the bank actually makes him leave, he will keep living in the Orlando house, and pocket the $2,200 he used to pay on his monthly mortgage. “I’m not stupid,” he says. “I will live for free until the bank takes over the house.”

Shasta Gaughen, an anthropologist living in California, stopped paying her mortgage in February. She has no idea when her home will actually be taken over. “I have been able to save significantly,” she says. “Every penny that was supposed to go to my mortgage went into savings, around $1,200 a month.”

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Posted in * Economics, Politics, Consumer/consumer spending, Economy, Ethics / Moral Theology, Housing/Real Estate Market, Personal Finance, Politics in General, The 2009 Obama Administration Housing Amelioration Plan, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The Fiscal Stimulus Package of 2009, The U.S. Government, Theology

Steven Pearlstein (Wash. Post)–To sort this mess, both banks and borrowers must do the right thing

… if, as appears to be the case, the overwhelming majority of homeowners facing foreclosure have fallen far behind on their payments, then it is a good deal harder to summon up the same moral outrage over reports that the banks and loan service companies cut corners, failed to keep the right documents and engaged in shoddy and even fraudulent practices. Just because the banks and servicers have screwed up doesn’t mean they and their investors are no longer entitled to get their money back.

Certainly banks and servicers should, at their own expense, be sent back to do things right. Those who engaged in fraud should be punished. And if there are legitimate questions about who owns a loan, those will need to be resolved before the proceeds of any foreclosure are distributed.

But none of that changes the basic reality that there are millions of Americans who took out mortgages they could not support on houses they could not afford. It may be necessary to postpone their day of reckoning for a few months to get the paperwork in order and ensure that all the proper procedures are followed, but the reckoning is inevitable.

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Posted in * Economics, Politics, Consumer/consumer spending, Economy, Housing/Real Estate Market, Personal Finance, Politics in General, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Halt in Foreclosures a New Blow to Home Sales

(Please note the above title is from the print edition–KSH).

A snapshot of the problems can be seen at the real estate agency that sold Ms. [Amanda] Ducksworth her home, Marc Joseph Realty, based in Fort Myers.

The agency had 35 deals that were supposed to close this month. As of Thursday, Fannie [Mae] had postponed 11 of them. Another handful of homes that did not have offers or were being prepared for market had also been withdrawn.

“If this wipes out half my inventory, that’s a scary thing,” said Bill Mitchell, the agency’s closing coordinator.

As he spoke, his computer pinged and another message from Fannie [Mae] came through about withdrawing a house. It had the subject line, “Unable to Market Notice.”

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, Housing/Real Estate Market, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The U.S. Government

Meredith Whitney Says States May Need Federal Bailout in Next 12 Months

The U.S. government will face pressure to bail out struggling states in the next 12 months, said Meredith Whitney, the banking analyst who correctly predicted Citigroup Inc.’s dividend cut in 2008.

While saying a bailout might not be politically viable, Whitney joined investor Warren Buffett in raising alarm bells about the potential for widespread defaults in the $2.8 trillion municipal bond market. She said state and local issuers have taken on too much debt and that the gap between public spending and revenue is unsustainable.

“People will think the federal government will bail these states out,” Whitney, 40, the founder of Meredith Whitney Advisory Group Inc., said in an interview on Bloomberg Television’s “In the Loop.” “It’s going to be an incredibly divisive issue.”

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Posted in * Economics, Politics, Economy, House of Representatives, Office of the President, Politics in General, President Barack Obama, Senate, State Government, The 2009 Obama Administration Bank Bailout Plan, The 2009 Obama Administration Housing Amelioration Plan, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The Possibility of a Bailout for the U.S. Auto Industry, The September 2008 Proposed Henry Paulson 700 Billion Bailout Package, The U.S. Government

The Economist–The President needs to change his reputation for being hostile to business

Winston Churchill once moaned about the long, dishonourable tradition in politics that sees commerce as a cow to be milked or a dangerous tiger to be shot. Businesses are the generators of the wealth on which incomes, taxation and all else depends; “the strong horse that pulls the whole cart”, as Churchill put it. No sane leader of a country would want businesspeople to think that he was against them, especially at a time when confidence is essential for the recovery.

From this perspective, Barack Obama already has a lot to answer for. A president who does so little to counter the idea that he dislikes business is, self-evidently, a worryingly negligent chief executive. No matter that other Western politicians have publicly played with populism more dangerously, from France’s “laissez-faire is dead” president, Nicolas Sarkozy, to Britain’s “capitalism kills competition” business secretary, Vince Cable (see article); no matter that talk on the American right about Mr Obama being a socialist is rot; no matter that Wall Street’s woes are largely of its own making. The evidence that American business thinks the president does not understand Main Street is mounting

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Posted in * Economics, Politics, Corporations/Corporate Life, Economy, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Politics in General, President Barack Obama, Taxes, The 2009 Obama Administration Bank Bailout Plan, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The Fiscal Stimulus Package of 2009, The Possibility of a Bailout for the U.S. Auto Industry, The U.S. Government

CNBC–Home Price Double Dip Begins

….given the combination of the expiration of the home buyer tax credit and the increasing number of loans moving to final foreclosure, we knew that home prices overall would take a hit, but it would take a while.

Well we’re here.

Two new reports out today prove the consequences of oversupply of organic inventory (12.5 months on existing homes in July according to the National Association of Realtors) and the shadow inventory of foreclosed properties (estimates vary widely and wildly). CoreLogic’s Home Price Index shows home prices “flat” in July as transaction volume continues to decline. “This was the first time in five months that no year-over-year gains were reported,” according to the release. In June, prices were up 2.4 percent year over year. In addition, “36 states experienced price declines in July, twice the number in May and the highest number since last November when prices nationally were still declining.”

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Posted in * Economics, Politics, Consumer/consumer spending, Corporations/Corporate Life, Economy, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Personal Finance, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--

Gregg Easterbrook (Reuters)–It’s time for Obama to stop declaring new Economic Recovery Plans

Pundits are restless, an election looms ”“ so this week, President Barack Obama is proposing yet another round of special favors, aimed at improving the economy. Prominent columnist Paul Krugman wants the plans to be “bold” and to involve huge amounts of money. Here’s a contrasting view: government should stop declaring recovery plans, bold or otherwise.

Maybe the constant announcing of new plans ”“ especially plans backed by borrowing or tax cuts ”“ is, itself, an impediment to economic growth.

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Posted in * Economics, Politics, Budget, Consumer/consumer spending, Corporations/Corporate Life, Credit Markets, Economy, Housing/Real Estate Market, Labor/Labor Unions/Labor Market, Office of the President, Politics in General, President Barack Obama, The 2009 Obama Administration Bank Bailout Plan, The 2009 Obama Administration Housing Amelioration Plan, The Banking System/Sector, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The Fiscal Stimulus Package of 2009, The National Deficit, The Possibility of a Bailout for the U.S. Auto Industry, The September 2008 Proposed Henry Paulson 700 Billion Bailout Package, The U.S. Government, Treasury Secretary Timothy Geithner