Sunday, January 13, 2013

Monday January 14 Housing and Economic stories


Bernanke Determined To Make Mortgate Rates Go Lower - (  Record-low mortgage rates aren't cheap enough for Federal Reserve Chairman Ben S. Bernanke as he tries to spur economic growth and create jobs. Policymakers are disappointed that lower yields on mortgage-backed securities haven't led to more savings on home loans after the Fed expanded its balance sheet to an all-time high of almost $3 trillion through bond purchases. Bernanke this month called the trend "unfortunate," and the Federal Reserve Bank of New York held a workshop to examine the issue. The gap between the bond yields and home-loan rates is blunting the economic benefits of the Fed's record accommodation, New York Fed President William C. Dudley said in a speech in New York this month. Among the reasons for the spread: banks are reluctant to take on the expensive fixed costs of new staff to process the paperwork and tougher capital requirements are making it less attractive to service loans.

Jobless benefits running out - ( 2 million jobless will get their last unemployment checks this week unless Congress acts to resolve the fiscal cliff.  Some 2.1 million jobless Americans are receiving their last federal unemployment checks this week if Congress doesn't extend the deadline to file for extended benefits. And another 1 million who exhaust their state benefits in the first quarter of 2013 will never see a federal unemployment payment, according to the National Employment Law Project, an advocacy group. Lawmakers are down to the wire to extend federal jobless benefits -- of up to 47 weeks -- that Americans can receive after exhausting their six months of state payments. The law expires on Wednesday.

The Rise And Fall Of Phantom Housing Collateral - (  
How much phantom housing collateral is still on the books? Nobody knows, and that in itself renders the housing/mortgage sector fragile. Mortgage debt doubled in a mere decade. If we go back to pre-bubble 1997, residential mortgages totaled $5.1 trillion. (Source: mortgage debt outstanding, 1959-2003). This was roughly 50% of real GDP of $10 trillion (source: Real U.S. GDP). At the top of the bubble, residential mortgage debt was $10.57 trillion, more than double the total of 1997. (Source:Balance Sheet of Households, Federal Reserve). This was 79.3% of real GDP--a rise of 30%. As a percentage of disposable personal income, mortgage debt rose from 53% in 1960 to 113% in 2003. Income rose over those 43 years, of course, but mortgage debt rose much faster. Mortgage debt has declined as lenders have written off losses. Mortgage debt has declined from $10.56 trillion in 2007 to $9.48 Trillion in 2012. Is it coincidence that this $1.1 trillion decline equals the Fed's purchases of mortgages since 2009?The World's Largest Money-Laundering Machine: The Federal Reserve (October 8, 2012) "The Fed is now where mortgages go to die" -- Catherine Austin Fitts

Countrywide Loan Probe Ended by House Panel with No Action Taken - ( The investigation was sought by Representative Darrell Issa, the California Republican who leads the House Oversight and Government Reform Committee. Issa said in a July report that Countrywide gave discount loans to lawmakers and Fannie Mae executives from 1996 to 2008 as the government-sponsored mortgage-finance company lobbied to block legislation that would've diminished its sale of subprime loans.''

Michigan Supreme Court Rules $3.75 Billion Of JPM Chase Held Mortgages Are Voidable - ( The Michigan Supreme Court ruled 4-3 that nearly $3.75 billion of former WamU mortgages held by JPMorgan chase are voidable. On the Friday before Christmas, while the media was focused on the funerals of the victims of the Sandy Hook massacre and pre-Christmas retail sales figures, the Michigan Supreme Court quietly handed down a significant ruling that will affect nearly $3.75 billion worth of mortgages former Washington Mutual mortgages that JPMorgan Chase acquired from the FDIC after Washington Mutual went into FDIC receivership in 2008.
The Michigan Supreme Court upheld a Michigan Court of Appeals ruling from January that calls for a strict interpretation of a Michigan law that states that if a foreclosing party is not the originating note holder they must be able to show a record chain of the mortgage.

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