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STORIES:
Banks
are still exposed to $1 trillion in unsecured mortgage debt - (www.ochousingnews.com) Loanowners across the country are deeply underwater, and they have been
offered numerous bailouts in the form of loan modifications and assistance
programs, refinance opportunities, and interest rate subsidies, plus plenty of
lip service from politicians who feel their pain. This has all been a ruse, a
diversion from the government’s real efforts to save the banks. Today’s
featured article is about the poor loan-owners who are still $1 trillion
underwater. Some are so hopelessly underwater that they won’t see equity again
in their lifetimes. They are renting from the bank with a feeble hope of equity
in some far off future that will never come to pass. This false hope is
important as it keeps the sheeple paying rather than strategically defaulting
and leaving the lender with another bad loan.
Why has Congress left housing to Fannie Mae and Freddie Mac?
- (www.washingtonpost.com) Here’s how strange things have gotten in the world of housing finance.
Fannie Mae and Freddie Mac, along with their regulator, are doing more to
dismantle themselves than Congress can be bothered to do. Monday their
regulator, Ed DeMarco of the Federal Housing Finance Agency, said that a new company will
be formed that will do much of the back-office work of both firms, setting the
stage for whatever Congress decides to do next to overhaul the mortgage sector.
The two government-sponsored mortgage finance companies are nearing the
five-year anniversary of when the feds took them over, a bailout that has cost
taxpayers $131 billion so far. They have been vilified, particularly by
conservatives, as representing the worst of crony capitalism (fairly) and as
being major drivers of the financial crisis (unfairly). For many Republicans, their
stated objection to the Dodd-Frank financial reform act (emphasis on stated)
was that it didn’t do anything to reform Fannie and Freddie.
Analysis: Growth stumble, jobs funk beg for new policy tilt
- (www.reuters.com) As western economies hit another pothole in their stuttering post-crisis
recoveries, pressure to step up economic policy intervention to tackle
entrenched unemployment may be building. Global business surveys showing a
second consecutive retreat in private sector growth last month, albeit from
nine-month highs in December, have refired investor doubts about whether policy
settings are adequate to protect recovery through 2013. Few have lost sight of
the fact that the country with the best growth performance so far, the United
States, has some of the loosest policy settings. And the Federal Reserve makes
no bones about its focus on joblessness.
Fannie,
Freddie to interbreed and produce monster - (www.reuters.com) Fannie Mae and Freddie Mac will form
a joint venture for securitizing home loans that could end up replacing the two
government-controlled mortgage finance giants,
their regulator said on Monday. "The overarching goal is to create
something of value that could either be sold or used by policymakers as a
foundational element of the mortgage market of the future," Edward
DeMarco, acting director of the Federal Housing Finance Agency, told the
National Association for Business Economics. Fannie Mae and Freddie Mac, which help
finance about two-thirds of new U.S. homes loans, were seized by the government
in 2008 as mortgage losses mounted. They have drawn nearly $190 billion from
the U.S. Treasury to stay afloat.
How the Student Loan
Crisis Drags Down House Prices - (www.cnbc.com)
Pity the college graduate, burdened with shocking levels of student-loan
debt and looking for a job in the worst employment market in two decades. But
save a little pity for the rest of us. The staggering amount of outstanding
student debt — nearly $1 trillion owed – is beginning to impede the U.S.
economy as a whole, a new report from the New York Federal Reserve suggests,
chiefly by robbing the housing market of its richest crop of new buyers: young
college graduates.
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