Fannie and Freddie - pay us back! - (www.nytimes.com) WHO says Democrats and Republicans can’t agree on anything? When it comes to fixing the government’s troubled and costly relationship with the private mortgage market, bipartisanship is very much alive. Politicians in both parties have reached consensus over the past four years to simply do nothing. Consider the elephant in the room: Fannie Mae and Freddie Mac owe American taxpayers nearly $140 billion — and there seems to be no plan on any front to pay it back. Though many Americans aren’t aware of it, the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) are publicly traded companies — like I.B.M. or General Electric. Except these two giant housing lenders were created by Congress and, as a result, have a relationship, albeit an awkward one, with Uncle Sam.
Sony, Panasonic Credit Rating Cut to Speculative Grade - (www.bloomberg.com) Sony Corp. (6758) and Panasonic Corp. (6752), the Japanese electronics makers reeling from record losses, had their credit ratings cut to junk for the first time by Fitch Ratings amid slumping demand for their televisions. Sony’s rating was cut by three levels to BB-, three steps below investment grade, and Panasonic by two levels to BB, with the outlook on both companies being negative, Fitch said in separate statements today. Both companies had their short-term ratings reduced to B from F3.
To Stem Losses, FHA Mortgages Get More Expensive - (www.cnbc.com) The federal agency that some credit with saving the housing market during the worst of the recent crash, may now be in need of taxpayer help itself. The Federal Housing Administration (FHA), which insures more than $1 trillion worth of home mortgages, is looking at $16.3 billion in losses, according to an annual audit released today. “This does not mean FHA has insufficient cash to pay insurance claims, a current operating deficit, or will need to immediately draw funds from the Treasury,” according to a release from the Department of Housing and Urban Development (HUD). “The need to draw on Treasury funds is determined not by the economic assumptions of this actuarial review but those used in the President’s FY 2014 budget proposal to be released in February, with a final determination on a potential draw made in September.”
Rising down payments and loan costs will hinder a housing recovery - (www.ochousingnews.com) Besides credit qualification barriers due to low FICO scores, there are two barriers to originating more loans and selling more houses to owner occupants: (1) insufficient down payment, and (2) increasing loan costs. The FHA still originates loans at 3.5% down, and the credit barriers are limited, despite realtor pleas and rhetoric to the contrary. However, since the FHA is losing a great deal of money and facing a bailout, they are continually raising their insurance fees as they become the replacement for subprime lending. These increasing costs are making houses less affordable and thereby reducing access to credit. As a result, many borrowers are opting for conventional mortgages with their higher down payment requirements. And since fewer potential buyers have the available cash saved for a down payment, the increasing costs of FHA loans which drives people to conventional mortgages is further reducing the buyer pool. This will inevitably lead to less demand.
Tiny houses in San Francisco at MacMansion prices - (www.sfgate.com) This week, San Francisco’s Planning Commission will vote on whether to cap the new micro-apartments allowed in the city at 375 units. Proponents of the tiny apartments — which cram living room, bathroom and kitchen into as little as 220 square feet of living space — say the city desperately needs more apartments with lower monthly rents. They also point out that 40 percent of San Franciscans live alone, making this type of unit ideal. But opponents worry that the units would not benefit neighborhoods where they would be built, and point out that, at a higher price per square foot than larger apartments, they are not truly affordable housing.
Exclusive: India's fiscal deficit could reach 5.5-5.6 percent of GDP in 2012/13 - source - (www.reuters.com)