KeNo's Housing and Economic Portal: Monday September 26 Housing and Economic stories

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TOP STORIES:

More Clues Of A Mega Mortgage Refinance Plan On The Way - (www.businessinsider.com) There were three important developments in mega mortgage refinancing story in the past week. Clearly there is something in the works. The questions are, “What?” and “How big?” This first sign came from the Presidents’ speech. He spoke of a ReFi. But he had not one word of detail. Still there are clues:

· My administration can and will take some steps to improve our competitiveness on our own.

· We’re going to work with federal housing agencies to help more people refinance their mortgages at interest rates that are now near 4 percent.

· I know you guys must be for this, because that’s a step that can put more than $2,000 a year in a family’s pocket, and give a lift to an economy still burdened by the drop in housing prices.

King of the road: The value of a vintage travel trailer - (www.sfgate.com) Not long after coming to terms with the fact that we couldn't afford to buy a home in the Bay Area, and struggling with the decision about whether to move elsewhere, my wife and I settled on a third option: We decided to buy an old camping trailer. A trailer, we reasoned, would be our unique foray into "home" ownership. It would also provide us with an economical way to explore places to live outside of the Bay Area while paying for campgrounds instead of hotel rooms. When we weren't camping, we planned to use the trailer as an office and a guestroom on the side of our house. And maybe, sometime in the future, we could even spend a few months on the road in the camper, exploring the country with our young daughter. Unbeknownst to us, we were part of a trend. A report presented at the Recreational Vehicle Industry Association conference in June found RV ownership in the U.S. at an all-time high with 8.5 percent of U.S. households owning RVs. By comparison, that figure was 6.8 percent in 1993. (The fastest growth in the most recent study was in travel trailers, versus motor homes and other types of RVs).

Generation of houseowners stuck in first houses - (www.sacbee.com) Poor families.... NOT!!! What the fuck did you think you were buying, a loaf of bread???

They're trapped, like so many members of their generation. Steve and Tasha McLaughlin have had two kids since they bought their two-bedroom "Brady Bunch"-style house in South Natomas seven years ago. They need more room, but they can't move: The house they bought for $256,000 is worth just $90,000, and an attempt to sell it failed. "We are literally stuck," said Tasha McLaughlin, 33. "There's no light ahead." The McLaughlins and tens of thousands of others like them in the Sacramento region are unable to take the traditional second step on the American home ownership ladder. They are captive to outsized mortgages born in a real estate bubble, which have balances much higher than the homes are now worth. During the boom years, young families could sell their first homes to buy larger ones, using the equity they built up in their starter models. But for those who bought at the height of the market, plunging prices have wiped out their equity and then some.

Housing refinance proposal unfair to most houseowners - (www.and renters!) - (www.thehill.com) The plan reportedly supported by the Obama administration to force Fannie Mae and Freddie Mac to reduce interest rates for millions of homeowners would mean that some homeowners get government help while their more responsible neighbors do not. It would in effect be a backdoor stimulus, one involving pushing taxpayer cash out the door without a vote of Congress. And there is little reason to think it would be much more effective than the fiscal stimulus to date. The proposal is to strong arm Fannie and Freddie’s independent regulator into allowing the two government-controlled mortgage insurance firms to weaken refinancing guidelines. Millions of homeowners who remain current on their mortgages but do not qualify for a loan under more rigorous post-bubble standards could see their interest rate reduced from, say, 6 percent down to 4 percent. This amounts to a $366 monthly saving on a $300,000 mortgage. Advocates of the idea note that taxpayers are already on the hook for losses because Fannie and Freddie back the mortgages in questions. But the suggestion that the policy is then “free” is off the mark because taxpayers will pay for part of the lower interest rates. The government doesn’t just guarantee mortgages; taxpayers actually own many of them through mortgage-backed securities purchased by the Federal Reserve, Fannie and Freddie.

The Fed’s Wall Street Rescue Missed Main Street - (www.nytimes.com) FOR the last three years we have been told repeatedly by government officials that funneling hundreds of billions of dollars to large and teetering banks during the credit crisis was necessary to save the financial system, and beneficial to Main Street. But this has been a hard sell to an increasingly skeptical public. As Henry M. Paulson Jr., the former Treasury secretary, told the Financial Crisis Inquiry Commission back in May 2010, “I was never able to explain to the American people in a way in which they understood it why these rescues were for them and for their benefit, not for Wall Street.” The American people were right to question Mr. Paulson’s pitch, as it turns out. And that became clearer than ever last week when Bloomberg News published fresh and disturbing details about the crisis-era bailouts.