Here is some good news about home prices increasing.
http://online.wsj.com/article/SB123790736606125797.html#mod=todays_us_page_one
All posts in Economic News
Hedge Funds To Participate in TALF
The WSJ reported that Hedge funds of all sizes and strategies are expressing strong interest in the government’s plan to unclog consumer-lending pipelines. Now they and other investors need to decide Friday if they will participate in the first round of borrowing through the Term Asset-Backed Securities Loan Facility, or TALF.
Some of the biggest hedge funds in the business have participated in calls and meetings with other hedge-fund managers, lawyers and regulators about the program. They include Harbinger Capital Management, Highbridge Capital Management, Elliott Management Corp., Paulson & Co., Perry Capital, Citadel Investment Group, Cerberus Capital Management and D.E. Shaw Group.
http://online.wsj.com/article/SB123690363713413941.html#mod=todays_us_money_and_investing
Here’s everything that you wanted to know about TALF but was afraid to ask: http://www.newyorkfed.org/markets/talf_faq.html
And here’s everything you wanted to know about how the stimulus activity impacts your state: http://www.stimuluswatch.org/project/by_state
The FDIC Needs To Borrower $500 Billion
The Wall Street Journal reported that “The FDIC is looking to borrower $500 billion. The Wall Street Journal reported that Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.”
http://online.wsj.com/article/SB123630125365247061.html?mod=todays_us_page_one
Foreclosure Rates
The Wall Street Journal reported that “ore than a tenth of American households with home mortgages are overdue on payments or in foreclosure, according to a new survey.
The Mortgage Bankers Association’s latest survey, released Thursday, showed that about 11% of mortgages on one- to four-family homes were at least a month overdue or in the foreclosure process at the end of 2008. That seasonally adjusted figure is up from 10% three months before and 8% a year earlier. The current level is the highest since the trade group began such surveys nearly four decades ago.”
Also, A Mortgage Banker’s Association survey shows that Florida leads the nation with one in five (yes, that is 20%) home loans one month or more past due, the highest delinquency rate among the 50 states. Of those, almost 9% (320,000 homes) were in foreclosure, compared to a nationwide level of 12% delinquent and 3.3% in foreclosure, representing 1.9 million properties.
http://online.wsj.com/article/SB123630052006746901.html?mod=todays_us_page_one
Common Sense Answers About the Obama Plan
This article is from the Wall Street Journal.
http://online.wsj.com/article/SB123620094171232805.html?mod=todays_us_page_one
Here are 7 things to know from Yahoo Finance
More Information On Obama’s Financial Stability Plan
Here is what the site shows on Obama’s Home Affordable Refinance “Please be patient Lenders and servicers are just getting the detailed program requirements and it may take time before they are ready to accept applications.” Here is more information on this http://www.financialstability.gov/makinghomeaffordable/
Here are the “Home Affordable Modification Program Guidelines.” Here is the link http://www.treas.gov/press/releases/reports/modification_program_guidelines.pdf
This is some very interesting information on both of the programs. Here is a “Fact Sheet” that summaries both programs. http://www.treas.gov/press/releases/reports/housing_fact_sheet.pdf
Here is probably the most important part:
- Focusing on Homeowners At Risk: Homeowners at risk, such as those suffering serious hardships, decreases in income, increases in expenses, payment “shock,” high combined mortgage debt compared to income, who are “underwater” (with a combined mortgage balance higher than the current market value of the house), or who show other indications of being at risk of default may be eligible for a loan modification. Eligibility for the program will sunset at the end of three years.
..
- Reaching Homeowners Before They Have Missed Payments: Delinquency will not be a requirement for eligibility. Rather, because loan modifications are more likely to succeed if they are made before a borrower misses a payment, modifications for households at risk of imminent default despite being current on their mortgage payments are eligible to participate, in addition to those who have fallen behind.
When Will Banks Start Lending Again?
That is a great question and it seems that the government is trying to do too much at once. The #1 priority needs to be to fix the banking system. Here is another initiative the Fed has come out with from The Wall Street Journal. “The U.S. launched a program to finance up to $1 trillion in new lending to consumers and businesses, in an ambitious attempt to jump-start credit for everything from car loans to equipment leases. Much is riding on the initiative, known as TALF for Term Asset-Backed Securities Loan Facility. At the height of the credit boom, Wall Street issued more than $1 trillion a year of securities that were backed by consumer credit, and trillions more backed by mortgages. These markets — sometimes called “the shadow banking system” because they operate outside traditional bank activity — accounted for roughly 40% of all consumer lending before the financial crisis erupted last year. But the market dried up last year. Issuance of securities tied to consumer loans dropped to less than $8 billion in the final three months of last year.”
http://online.wsj.com/article/SB123609012856118765.html#mod=testMod
Obama’s Financial Stability Plan
I haven’t had a chance to read everything in its entirety. It seems as though the 2 most important links are “Making Home Affordable Refinance and Modification Options” and “Modification Program Guidelines.” I will communicate more information once my lenders start to implement it and send out communications on how everything will work. I will only be able to help on the refinancing end for borrowers not behind. This will not be able to help everyone but it is a step in the right direction. Although there will be many critics we need to start to be more positive about these changes. There is no cure all but if we instill confidence it will get our economy moving in the right direction again.
Here is what the AP said. “The Obama administration is kicking off a new program designed to help up to 9 million borrowers stay in their homes through refinanced mortgages or loans that are modified to lower monthly payments.
The Treasury Department on Wednesday released detailed guidelines designed to let the lending industry know how to enroll borrowers in the program announced last month.
To help borrowers determine if they are eligible, the government has put answers to common questions and assessment tools on the Web site http://www.FinancialStability.gov.
“It is imperative that we continue to move with speed to help make housing more affordable and help arrest the damaging spiral in our housing markets,” Treasury Secretary Timothy Geithner said in a statement.”
Here is a report from Fox Business on the package too.
New- Home Sales Tumble
The AP reported this morning that the government says new-home sales tumbled to a record-low annual pace of 309,000 in January as mounting damage from the collapsed housing market pushes the country deeper into recession.
http://finance.yahoo.com/news/Newhome-sales-tumble-to-apf-14478139.html
Jobless Claims Jump
The AP reported that new jobless claims rose more than expected last week and the number of laid-off Americans continuing to receive unemployment benefits topped 5.1 million, fresh evidence the recession is increasingly forcing employers to shed jobs. The Labor Department said Thursday that first-time requests for unemployment benefits jumped to 667,000 from the previous week’s figure of 631,000. Analysts had expected a slight drop in claims.
http://finance.yahoo.com/news/667K-new-jobless-claims-apf-14476793.html
Located in South Florida, Justin Miller has established himself as a leader in the mortgage community for his expert advice and understanding of the current real estate climate. 
Jonathon Becker (Coastal Credit Clinic): Justin- GREAT blog post! This is a HUGE questions many of my clients h...
Sean: Justin- Great article...would be great to understand the differences i...
Phil Himes: You are so correct! Many of my clients are currently looking at purch...
Stock quote: Good blog post, nice efforts. It couldn’t appear to have been penned a...
Upside Down Guy: This sounds like a great program for someone like me but my lending in...