Monday, December 31, 2012

Tuesday January 1 Housing and Economic stories


TOP STORIES:

Illinois Outlook Cut to Negative by Moody’s on Pension Shortfall - (www.bloomberg.com)  Illinois had the outlook on about $28 billion of general-obligation bonds revised to negative from stable by Moody’s Investors Service, according to a statement from the ratings company. New York-based Moody’s, which already rates Illinois the lowest among U.S. states, cited its underfunded pension systems and said the shortfall is “likely to persist and perhaps worsen.” Illinois in January had its rating cut to A2, sixth- highest, after a legislative session that “took no steps to implement lasting solutions to its severe pension underfunding.” The state’s worst-funded retirement system has 43.4 percent of assets needed to cover its obligations, according to data compiled by Bloomberg. Illinois also has about $8 billion in unpaid bills.

Fed's Fisher worried about "Hotel California" monetary policy - (www.reuters.com) The Federal Reserve's latest moves to reduce borrowing costs and boost the economy could be hard to reverse, a top Fed official said on Friday. "I argued that basically we were at risk of what I call a 'Hotel California' monetary policy," Dallas Fed President Richard Fisher said in an interview on CNBC. Like the Eagles song of that name, he said, "You can check out any time you want, but you can never leave." Fed decided on Wednesday to maintain its monthly asset purchases of $45 billion of Treasury bonds and $40 billion of mortgage-backed securities, until it saw a substantial improvement in the outlook for the U.S. labor market.

Housing for extended families - (www.nytimes.com) Tom and Kristin Moser’s new house — nearly 3,000 square feet in a development outside Tucson — has all the modern amenities, including solar panels and an open kitchen. But their house also has a feature that the builders are betting will be a hit, like the dog showers and craft rooms that beckoned during the boom. Tucked inside is a one-bedroom apartment with its own garage and a discrete entrance around the side. The Mosers wanted the built-in apartment not to bring in a renter to help pay the mortgage, but rather as a home for Mr. Moser’s 82-year-old widowed father. “More than weekly visits and phone calls, he really needs to be around family,” Mr. Moser, an investment manager, said of his father, Lee. “It’s the way he was raised. I think as a society it’s a way we have to step back into.”

Six Reasons to Fear the Overhang of Unsold Houses - (www.businessweek.com) The huge “shadow inventory” of unsold homes doesn’t seem to scare people the way it used to. Home prices are rising and builders are ramping up production. The number of properties for sale is the smallest in a decade. In an excellent article on Nov. 29, Bloomberg’s John Gittelsohn and Prashant Gopal reported that some housing doomsayers are recanting their words. Real estate professor Susan Wachter is one of those erstwhile doomsayers. She thought that once the big banks resolved legal issues that had stalled foreclosures, a wave of homes owned by banks would hit the market, pushing down prices. “I was wrong,” Wachter, who teaches at the University of Pennsylvania’s Wharton School, told Gittelsohn and Gopal.

Tax Chill Blows Through Central London Property - (www.cnbc.com) But the government's clampdown on property tax avoidance is starting to gather steam in these mansion-flanked streets. In the central London boroughs of Kensington and Chelsea and the City of Westminster, there are as many as 3,000 homes, with a present value of 17.3 billion pounds held in offshore companies, according to new research from Savills, the property consultancy. As well as the 15 percent stamp duty applied to the sale of homes worth over 2 million pounds held by companies introduced in March, these properties will now also be subject to an annual levy of up to 140,000 pounds and capital gains tax.






Sunday, December 30, 2012

Monday December 31 Housing and Economic stories


TOP STORIES:

Study Shows a Pattern of Risky Loans by F.H.A. - (www.nytimes.com) A new and extensive analysis of 2.4 million loans insured by theFederal Housing Administration in recent years shows a pattern of risky lending that could generate $20 billion in losses and harm thousands of the nation’s most vulnerable borrowers. By ignoring risks in loans it insured in 2009 and 2010, the study concludes, the F.H.A. is imperiling both borrowers and taxpayers who stand behind the agency. The analysis emerged less than a month after the F.H.A.’s auditor submitted a troubling report on the financial soundness of its insurance fund. In mid-November, the auditor estimated that the fund, which backs $1.1 trillion in mortgages, has a value of negative $13.5 billion. In other words, if it were to stop insuring loans today, the F.H.A. fund could not cover the losses anticipated on loans it has already insured.

Home Seizures Rise as Banks Adjust to Foreclosure Flow - (www.bloomberg.com) Home seizures in the U.S. rose 5.4 percent last month, the first annual gain in two years, as lenders seek to manage the flow of distressed properties without disrupting the housing recovery, according to RealtyTrac. Banks repossessed 59,134 homes, up from 56,124 from November 2011, the Irvine, California-based data firm said today in a report. The increase was the first since October 2010, when foreclosures slowed after allegations that lenders were using faulty practices to take property from delinquent homeowners. Seizures climbed 11 percent from the previous month. “Lenders have figured out how to play the foreclosure game in this new world where they’re getting a lot more scrutiny,” Daren Blomquist, RealtyTrac vice president, said in a telephone interview. “Everybody involved in the foreclosure industry has finally got a good handle on how to manage these properties to create a more managed and stable flow.”

Greek Debt-Relief Debate Flares After Release of Fresh Aid - (www.bloomberg.com) European governments geared up to provide extra aid or debt relief for Greece after releasing the country’s first loan payment in six months, signaling renewed battles over how to stabilize the euro economy. Euro-area finance ministers approved the payout of 49.1 billion euros ($64 billion) of loans through March and committed to “additional measures” in case Greece’s debt reduction veers off track. While another cut in bailout-loan rates and an increase in infrastructure funding would top the list of extra measures, the policy makers hinted that outright debt relief -- still a taboo topic in creditor countries led by Germany -- would be on the table as well.

Sold for thirty million below initial asking price - (www.sfgate.com) While the sale price puts it in the record books, it doesn’t come close to the original asking price of $58 million, when it first came onto the market in 2006. Six years and several price deductions later, the 8-bed, 7.5-bath mansion is finally exchanging hands. The Italian Renaissance estate with panoramic views has been vacant for a while – even becoming the target of some graffiti vandals not too long ago. The property has also been in the same family for quite some time. Property tax records show only $7,900 was paid to the city last year. The city can expect to receive at least $300,000 more annually going forward.

If we're in a housing recovery WHY is Ink Jet Ben at it again ? - (www.forbes.com) Ben Bernanke continues to make history at the Federal Reserve.  On Wednesday, the FOMC announced more quantitative easing at a rate of $85 billion a month for an extended period of time.  The Bernanke Fed has also modified its guidance, noting its ultra-accommodative stance will remain in place until the unemployment rate falls below 6.5% and inflation projections remain no more than half a percentage point above 2% two years out. QE4 is here.  Only a few months after announcing what had been dubbed QE3, an open-ended $40 billion a month program to buy up mortgage backed securities (MBS), the FOMC decided to extend its asset purchases in 2013 as Operation Twist expires.





Thursday, December 27, 2012

Friday December 28 Housing and Economic stories


TOP STORIES:

California Psychiatrists Paid $400,000 Shows Bidding War - (www.bloomberg.com) Mohammad Safi, a graduate of a medical school in Afghanistan, began working as a psychiatrist at a California mental hospital in 2006, making $90,682 in his first six months. Last year, he took home $822,302, all of it paid by taxpayers. Safi benefited from what amounted to a bidding war after a federal court forced the state to improve inmate care. The prisons raised pay to lure psychiatrists, the mental health department followed suit to keep employees, and costs soared. Last year, 16 California psychiatrists, including Safi, made more than $400,000, while only one did in the other 11 most populous states, according to data compiled by Bloomberg.

Spanish Repossessed Property Prices Tumble 65% in Credit Crunch - (www.bloomberg.com) Prices of repossessed Spanish homes offloaded by lenders this year tumbled 65 percent as a million new properties remain unsold and buyers find it more difficult to get mortgages, according to Fitch Ratings. The price decline is relative to the value of the property when the loans were made and is more than double the drop in real estate values recorded in government data. That compares with a 45 percent slump in Portuguese repossessed house values. Spain’s property market is hampered by the country falling into its second recession in three years and struggling with Europe’s highest unemployment rate of 25 percent. Fitch published its latest study five years after a decade-long real estate bubble burst and just as Spain sets up its so-called bad bank to purge toxic assets from the books of troubled lenders.

Fed Expands Asset Buying, Links Rates to Joblessness, Prices - (www.bloomberg.com) The Federal Reserve said it will buy $45 billion a month of Treasury securities starting in January, expanding its asset-purchase program, and it linked the outlook for its main interest rate to unemployment and inflation. “The committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor-market conditions,” the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. The Fed said interest rates will stay low “at least as long” as the unemployment rate remains above 6.5 percent and if inflation “between one and two years ahead” is projected to be no more than 2.5 percent. The committee “views these thresholds as consistent with its earlier date-based guidance.”

NFIB small-business optimism index plunges - (www.marketwatch.com)  Small-business optimism plunged in November in the wake of President Barack Obama's re-election, according to data released Tuesday. An index from the National Federation of Independent Business that tracks sentiment among small firms fell 5.6 points at 87.5. The survey found that 49% of small-business owners expect future business conditions to be worse than current conditions. In October, a record percentage of owners were uncertain about the outlook, and it appears that many became decidedly negative in November. "Washington does not have the needs of small business in mind, said NFIB chief economist Bill Dunkelberg.

Head of GSEs Edward DeMarco faces replacement, unfortunately  - (www.ochousingnews.com)  Edward DeMarco is a thorn in the side of the Obama administration. He has consistently resisted calls to pander to loan-owners by forgiving principal on GSE loans. Many on the political left are calling for his head, and the Obama administration is poised to oblige them — and that’s not appropriate. DeMarco has proven to be a thoughtful administrator who protects the interests of the US taxpayer. Of course, that’s the problem many politicians have with him. They want to raid the coffers of the treasure to buy more votes. If DeMarco is replaced by someone who will allow politicians to steal from the treasury to buy votes, it would be a travesty. Unfortunately, I am not hopeful that Conservatives have the will or the power to stop them. This is one more step toward becoming a banana republic.






Wednesday, December 26, 2012

Thursday December 27 Housing and Economic stories


TOP STORIES:

$822,000 Worker Shows California Leads U.S. Pay Giveaway - (www.bloomberg.com) The numbers are even larger in California, where a state psychiatrist was paid $822,000, a highway patrol officer collected $484,000 in pay and pension benefits and 17 employees got checks of more than $200,000 for unused vacation and leave. The best-paid staff in other states earned far less for the same work, according to the data. Rising employee expenses are crowding out other priorities for state and local governments and draining resources for college tuition, health care, public safety, schools and other services, Schwarzenegger said in an e-mailed response to questions. “California spends most of its money on salaries, retirement payments, health care benefits for government workers, and other compensation,” said Schwarzenegger, 65, who replaced Davis as governor. “State revenues are up more than 50 percent over the past 10 years, but still we’ve had to cut spending on services because so much of that revenue increase went to increases in compensation and benefits.”

UBS to Charge Bank Clients for Franc Deposits Starting Next Week - (www.bloomberg.com) UBS AG (UBSN), Switzerland’s biggest bank, said it will start charging financial institutional clients for cash balances held in Swiss francs, adding to measures imposed last year to control inflows into clearing accounts. The charge, which will be communicated individually to clients within days, will be levied from Dec. 21, the Zurich- based lender said in a notice to bank clients via the Swift system yesterday and made available by UBS. The company cited “continued prevailing market situation affecting the Swiss franc” for the move. The franc weakened against the euro. UBS has been levying a “temporary excess balance fee” since August 2011 in cash clearing accounts where net inflows were above a certain undisclosed threshold. Credit Suisse Group AG, the second-biggest Swiss bank, said last week it would start imposing negative rates on cash clearing accounts in francs and other currencies above a certain threshold as of yesterday.

Spain’s Weakened Banks Shackle Builders’ Drive for Growth Abroad - (www.bloomberg.com)  Spanish builders find themselves increasingly dependent on foreign banks as they seek growth abroad to weather the worst property slump on record. “We are having more difficulties with access to credit,” said Susana Monje, chief executive officer of Grupo Essentium, a construction firm based near Madrid that turned to Germany’s Deutsche Bank AG for backing to win a contract in India this year. “There’s a label for Spanish companies and if you have that label, then you have it more difficult.” Spanish builders such as Essentium and Actividades de Construccion & Servicios SA are paying the price for the frail state of the country’s banking system as they seek to tap growth abroad to compensate for a collapsed market at home. While helping fuel a housing boom before the bubble burst in 2008, lenders have since become reluctant to support the construction industry’s growth ambitions, instead focusing on reducing domestic real estate losses and cutting lending risks.

Obama Prepares To Kick Out Fannie's Ed DeMarco - (www.zerohedge.com) The man who singlehandedly fought the administration over the idea of converting Fannie and Freddie into the latest taxpayer-funded handout machine, FHFA head Ed DeMarco, and refused to write down Fannie and Freddie home loans in yet another Geithner-conceived debt forgiveness scheme, whose cost like any other non-free lunch will simply end being footed again by yet more taxpayers (what little is left of them), appears to have lost the war, and with the second coming of Obama appears set to be replaced as head of the FHFA. The WSJ reports that "The White House has begun preparations to nominate a new director to lead the agency that oversees Fannie Mae and Freddie Mac as soon as early next year, according to people familiar with the discussions. This would pave the way for President Barack Obama to fill what has become one of the most important economic policy positions in Washington." And so the impetus for as many as possible to default on their mortgage in a wholesale scramble to obtain debt forgiveness, will soon take the nation by storm.

Berlusconi Calls Spread a ‘Scam,’ Says Monti Beholden to Germany - (www.bloomberg.com) Former Premier Silvio Berlusconi said Italy’s bond yield difference with Germany is a “scam” and Prime Minister Mario Monti’s policies have made the economy worse than when he was in power. “Monti’s government has followed the Germany-centric policy that Europe has tried to impose on other states and it has produced a crisis that is much worse than when we were in power,” the 76-year-old billionaire said in an interview today on Canale 5 television, controlled by his Mediaset SpA (MS) broadcast company. Berlusconi said the excessive focus on the difference between Italian bonds and comparable German bunds was used to bring down his government a year ago. That gap reached a euro- era record 575.6 basis points on Nov. 9, 2011, days before he resigned and Monti was appointed to lead an unelected government of non-politicians.




Tuesday, December 25, 2012

Wednesday December 26 Housing and Economic stories


TOP STORIES:

World risks fresh credit bubble, BIS warns - (www.telegraph.co.uk) Asset prices across the world have risen to heady levels not seen since the credit boom five years ago and may be losing touch with economic reality yet again, the Bank for International Settlements has warned. “Some asset prices appeared highly valued in a historical context relative to indicators of their riskiness,” said the bank in its quarterly report. Yields on morgtage bonds have fallen to the lowest level ever recorded. Spreads on corporate debt have narrowed to the wafer thin margins of 2007, even though default rates are currently three times higher than they were then for junk bonds and twice as high for investment-grade companies. The venerable Swiss-based institution – almost alone in warning of a global debt crisis in the build-up to the Great Recession – said it is rare for markets to gather steam at a time when the major forecasters are turning gloomy.

Consumer sentiment nose-dives in December - (www.marketwatch.com) Consumer sentiment took a giant step back in December, as the looming fiscal cliff made its first measurable dent on the public’s psyche. The preliminary University of Michigan-Thomson Reuters consumer sentiment index fell to 74.5 from 82.7 in November. That’s far below the 82.0 expected in a MarketWatch-compiled economist poll, eliminating four months of gains and also representing the biggest one-month drop since March 2011. The report took some of the shine off a better-than-expected jobs report in November, as U.S. stocks pared their gains.

2 million could lose unemployment benefits this month - (www.washingtonpost.com) Hovering in the background of the “fiscal cliff” debate is the prospect of 2 million people losing their unemployment benefits four days after Christmas. “This is the real cliff,” said Sen. Jack Reed, D-R.I. He’s been leading the effort to include another extension of benefits for the long-term unemployed in any deal to avert looming tax increases and massive spending cuts in January.  “Many of these people are struggling to pay mortgages, to provide education for their children,” Reed said this past week as President Barack Obama and House Speaker John Boehner, R-Ohio, rejected each other’s opening offers for a deficit deal.

The Icelandic success story - (www.azizonomics.com) Iceland went after the people who caused the crisis — the bankers who created and sold the junk products — and tried to shield the general population. But what Iceland did is not just emotionally satisfying. Iceland is recovering, while the rest of the Western world — which bailed out the bankers and left the general population to pay for the bankers’ excess — is not. Bloomberg reports:
Few countries blew up more spectacularly than Iceland in the 2008 financial crisis. The local stock market plunged 90 percent; unemployment rose ninefold; inflation shot to more than 18 percent; the country’s biggest banks all failed. This was no post-Lehman Brothers recession: It was a depression. Since then, Iceland has turned in a pretty impressive performance. It has repaid International Monetary Fund rescue loans ahead of schedule. Growth this year will be about 2.5 percent, better than most developed economies. Unemployment has fallen by half. In February, Fitch Ratings restored the country’s investment-grade status, approvingly citing its “unorthodox crisis policy response.”

Big banks halt evictions for the holidays - (www.americanbanker.com) Some of the nation's biggest lenders will suspend foreclosure activity to help borrowers remain in their homes for the holidays. Wells Fargo (WFC), U.S. Bancorp (USB), PNC Financial Services Group (PNC), Bank of America (BCA), SunTrust (STI) and Citigroup (C) all said this week they plan to halt until after New Year's evictions of borrowers whose homes have been foreclosed on for loans the banks' own. U.S. Bank, PNC and Citigroup will offer the moratorium from Dec. 17 through Jan. 2. Wells Fargo and SunTrust will start their suspensions two days later. Wells Fargo and U.S. Bank will halt evictions and hold off on foreclosure sales nationwide, according to spokespeople for both banks, while PNC says it will suspend evictions.





Monday, December 24, 2012

Tuesday December 25 Housing and Economic stories


TOP STORIES:

Man refuses to sell house he couldn't afford, complains about foreclosure - (www.ochousingnews.com) Larry Faulks says his bank robbed him of over a quarter of a million dollars. By selling Faulks’ San Francisco house at a foreclosure auction, Wells Fargo wiped out all his equity, he said. Unlike most struggling homeowners, Faulks, 59, was not underwater on the home his family bought in 1962; it was worth considerably more than he owed on it. Wells Fargo did not rob him of his equity. Mr. Faulks was foolish and ignorant. He could have sold his home by choice as he didn’t require short sale approval. The fact that he chose not to sell doesn’t mean he was robbed; it means he was stupid. Wells Fargo says it tried to work with Faulks but couldn’t find a way to avoid foreclosure, as his income was too limited. Outside legal experts who reviewed his case said it highlights how California law doesn’t safeguard the rare homeowners with equity in a foreclosure. Foreclosure law isn’t designed to protect a homeowner with equity. It’s not supposed to. Foreclosure law is designed to force a sale so a lender can obtain their loaned capital. It’s supposed to be a threat to compel an owner with equity to sell on their own.

Federal agency asks to add big fee to mortgages - (www.timesunion.com) Foreclosures in New York typically take longer than in most states due to the protections and backstops that the courts and Legislature have put in place to try to keep people in their homes. That's the good news. But in what housing advocates say is a case of no good deed going unpunished, the federal agency that oversees mortgage giants Fannie Mae and Freddie Mac wants to add a special fee to its New York loans — precisely because of the long period of time it takes to complete a foreclosure here. The slow pace, which advocates view as a consumer protection, is viewed as a negative by lenders. "It's a real threat," said Kirsten Keefe, senior staff attorney at the Empire Justice Center, who notes that this increased fee could add more than $2,000 to the cost of a $200,000 mortgage over the life of a 30-year loan.

Fed Exit Plan May Be Redrawn as Assets Near $3 Trillion - (www.bloomberg.com)  A decision by the Federal Reserve to expand its bond buying next week is likely to prompt policy makers to rewrite their 18-month-old blueprint for an exit from record monetary stimulus. Under the exit strategy, the Fed would start selling bonds in mid-2015 in a bid to return its holdings to pre-crisis proportions in two to three years. An accelerated buildup of assets would also mean a faster pace of sales when the time comes to exit -- increasing the risk that a jump in interest rates would crush the economic recovery. “There is certainly an issue about unwinding the balance sheet” in a way that “is effective and continues to support the recovery without creating inflation,” St. Louis Fed Bank President James Bullard said in an interview in October. The central bank might have to “revisit” the 2011 strategy, he added.

Suppressed Inventory - (www.usawatchdog.com) Real estate expert Fabian Calvo says there’s more to the story about rising prices in the housing market than what’s reported by the mainstream media.  Calvo charges, “There’s a tremendous amount of manipulation . . . Yes, prices have gone up 3%.  I see it, but it’s because the inventory has been suppressed on purpose by big players . . . not foreclosing on properties.” Calvo should know because he runs a company called TheNoteHouse.us.  It buys and sells $100 million annually in distressed debt and real estate.  Calvo says, “Over 20 million houses, on any given night in America, are completely sitting vacant.”  According to Calvo, the economy is being helped by “shadow stimulus.”  It’s coming from millions of underwater homeowners who have stopped making mortgage payments.  Calvo says, “Money that would have been otherwise allocated towards a housing payment is going into consumer spending.” 

Right After The Election, New Home Sales Tumble From Downward Revised - (www.zerohedge.com) There are those who may be surprised that last month's number of Seasonally Adjusted New Home Sales, which was then reported at 389K, and which number hit the airwaves days before the Obama reelection, was the highest since April 2010. We are not among them, as we were fully expecting today's number to be a major revision of the September number lower - as just happened, with the whopper of a print revised far lower to 369K - but doubled down with the additional miss of expectations of Seasonally Adjusted annualized new home sales of 390K for October when in reality only 368K were sold. All these numbers are annualized. When observed on an as is basis, in October there was a grand total of 29,000 new homes sold in the entire USA, with the Northeast representing a whopping... 2,000 of this. 




Sunday, December 23, 2012

Monday December 24 Housing and Economic stories


TOP STORIES:

New York City Hits Sandy Victims With ‘Failure To Maintain' Property Citation - (www.cbslocal.com) Residents in one Queens neighborhood are crying foul after they were written up for failing to cleanhttp://images.intellitxt.com/ast/adTypes/icon1.png up the city’s own mess. It is yet another new complication in life after Superstorm Sandy. Rosanne and Joe Cavaliere are still trying to clean up from the hurricane. They have branches through their roof, busted front windows, and, to add insult to injury, they recently received a citation notice from the city. “It makes me angry, but it’s also ridiculous!” Rosanne Cavaliere told CBS 2’s Jessica Schneider. They got it on Nov. 9, cited with “failure to maintain” their property. But as they pointed out to CBS 2’s Schneider on Tuesday night, it’s a city tree that they were waiting for the city to remove. “It was over two weeks before someone came and removed it from the house, and we were patient enough with that, but then to just be slapped with a violation,” Joe Cavaliere said. The Department of Buildings said the citation is a mere formality. It’s a way to keep track of all downed trees.

Banks book record profits off Fannie and Freddie - (fortune.cnn.com) Bank executives ought to be picking out nice holiday gifts for Fannie Mae and Freddie Mac. Financial firms have made a mint this year offloading home loans on the giant government-backed mortgage insurers. In the third quarter, bank profits from that business hit an all-time high. The huge profit jump comes at a time when the government still needs to decide the fate of Fannie and Freddie, and when many think the companies, which were bailed out by the government in the financial crisis, should be doing more to avert foreclosures. But Ed DeMarco, the head of the government agency that oversees Fannie and Freddie, has resisted calls to lower the amount that underwater borrowers owe on their homes.

How foreclosure backlogs could hurt home buyers - (www.marketwatch.com) Backlogs in foreclosure processing are causing delays in home-price improvement and could wind up affecting the cost of a mortgage. The situation appears worst in New York, where it takes an average of nearly three years — 1,072 days, to be exact — for a home to go through the foreclosure process. It’s not much better in New Jersey, where it took an average of 931 days to foreclose on a home in the third quarter, according to statistics from RealtyTrac. Or in Florida, where it took about 858 days. Nationwide, the average time for homes to spend in the foreclosure process, meanwhile, was just 382 days. That may seem better, but it’s actually still an extended stretch compared with the average of 336 days in the third quarter of last year — and only 140 days in the third quarter of 2007.

Future FHA buyers to subsidize poor performing FHA loans of yesterday -- Will the FHA make mortgage insurance premiums permanent? - (www.doctorhousingbubble.com)  FHA insured loans are now a major part of the mortgage buffet available to home buyers.  This insured mortgage product has allowed many buyers to go in with 30x leverage when purchasing a new home.  So it should come as no surprise that the FHA is now inching closer to a bailout.  If we look at the actual FHA standing however, we begin to realize that the FHA is putting the screws around recent buyers for their lax products.  First, mortgage insurance premiums are soaring to make up for the capital reserve account that now finds itself $16 billion in the red.  Although on the surface you would think that over half a decade into thehousing crisis, some would realize that low down payment products were a problem here we are relying heavily on the one insured mortgage product that allows cash strapped Americans to once again go into massive debt with very little skin.  That game is however changing and this article will go into some more technical details regarding FHA insured loan products.

The Big Loan Backing Freeport’s Energy Deals - (www.nytimes.com) Freeport-McMoRan Copper & Gold‘s deals to buy two oil and gas exploration companies are a big — and controversial — move back into the energy sector. And they’re backed by another big loan underwritten by a single bank. JPMorgan Chase is the sole initial underwriter for a $9.5 billion loan facility to support the takeovers of Plains Exploration & Production and the McMoRan Exploration Company, together worth more than $9 billion. It’s a move that the firm has made something of a specialty. It agreed to provide an enormous $20 billion loan to AT&T last year for the since-scrapped $39 billion takeover of T-Mobile USA. It arranged an $8.6 billion facility to backCaterpillar‘s $7.6 billion purchase of Bucyrus two years ago. And earlier this week, the bank agreed to provide the initial $3.1 billion financing for Baxter International’s $2.8 billion takeover of Sweden’s Gambro.