Housing Market Tracker - Moody's Least Accurate Subprime Rating Service - UBS

Quote of the Day

“This group has saved less than any generation before them.” - An anonymous money manager, referring to the uptrend in reverse mortgages for seniors who are using them to pay for daily expenses. (Housing Wire, Apr. 2nd)

Subprime Fallout

For Freddie, Fannie, It's Policy vs. Profit. “Should Fannie Mae (FNM) and Freddie Mac (FRE) shareholders suffer to fulfill the companies' public mission of propping up the housing market in times of distress? …Their traditional allies [like] politicians and homebuilders, think they should do more to support the housing market… Congress [could] eventually will impose a much-tighter regulatory grip on the companies… to make them focus more on mission and less on mammon… Fannie and Freddie are likely to buy or guarantee 80% of all new home loans made this year, up from 55% in 2007, says Inside Mortgage Finance…. While their combined losses were $9 billion in H2’07.” (Wall St. Journal, Apr. 3rd)

Uncle Subprime. “Boston Federal Reserve economists examined 1.5 million homeownerships over nearly 20 years and found that the overwhelming reason for subprime foreclosures is not unsustainable debt foisted on ignorant borrowers or even financial setbacks. People walk out on subprime mortgages when the value of their home declines. Homeowners who've suffered a 20% decline in home prices are 14 times as likely to default as those who have enjoyed a 20% gain… The Mortgage Bankers Association tracks 46 million mortgage borrowers, and 42 million are paying on time. More than 20 million households own their homes outright and… probably don't want to pay for someone else's.” (Wall St. Journal, Apr. 3rd)

Judge Authorizes Probe Of Countrywide's Practices. “A federal judge has authorized an in-depth probe of Countrywide Financial Corp.'s (CFC) mortgage-processing systems by bankruptcy investigators hunting for evidence that the big mortgage lender has systematically abused borrowers. The decision is a victory for the Justice Department's federal bankruptcy monitors in a closely-watched test of their authority... Countrywide argued that the Justice Department's office of the U.S. Trustee had no authority to investigate its practices… Judge Thomas Agresti of the U.S. Bankruptcy Court in Pittsburgh [ruled] Tuesday that the trustee's office had demonstrated "a common thread of potential wrongdoing" in several bankruptcy cases involving Countrywide.” (Wall St. Journal, Apr. 3rd)

Moody's Is Least Accurate Subprime-Bond Rating Firm. “Moody's Investors Service is the least accurate assessor of the risks of subprime-mortgage securities among the three largest credit-rating companies, while Fitch Ratings is the best, according to UBS AG. Moody's assigns Caa2 or lower ratings to just 12% of the 292 bonds underlying benchmark Markit ABX indexes that UBS analysts expect to default. Both Fitch and Standard & Poor's tag 57% of the bonds with equivalent rankings, according to a report from the New York-based analysts yesterday. A rating of Caa2 or CCC is eight levels below investment grade.” (Bloomberg, Apr. 2nd)

Seniors Turn to Reverse Mortgages For Help With Everyday Expenses: Survey. “Consumer Credit Counseling Service of Greater Atlanta, Inc., survey; The number one reason borrowers take out a reverse mortgage is to pay for daily living expenses — only 3% say they used the funds from a reverse mortgage loan to take a vacation… The survey found that 19% of borrowers took out a reverse mortgage because their budgets were too tight; another 16% did so because they needed “more liquid assets” — whatever that means — while 15% used the funds to pay for home repair and maintenance. Another 8% obtained a reverse mortgage to pay for dependents or medical bills.” (Housing Wire, Apr. 2nd)

Want Subprime Loan? Must Get Counseling, Legislation Says. “The House of Delegates began debate yesterday on a bill to require people seeking subprime mortgages to meet with consumer counselors before signing on to risky loans. The legislation would mandate that consumers seeking subprime loans meet with independent financial counselors in the government or at nonprofit organizations to ensure they understand the terms of the loans. Proponents say the bill will prevent people from getting loans they do not understand, a factor in the tide of foreclosures.” (Washington Post, Apr. 2nd)

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Comments

[H2O]

Clinton: 'I Feel Like Paulette Revere'


And Why shouldn't she be ?????

THE SNIPERS ARE COMING - THE SNIPERS ARE COMING !!!!!!!!!!