Jan. 7, 2008: a good website for the current status of the housing initiatives: all talk & no action

Jan. 7, 2008: a good website for the current status of the housing initiatives: all talk & no action Rob Chrisman

There was once a young man who, in his youth, professed his desire to become a great writer.  When asked to define “great”, he said, “I want to write stuff that the whole world will read, stuff that people will react to on a truly emotional level, stuff that will make them scream, cry, howl in pain and anger!”

He now works for Microsoft writing error messages.

What does “in a hurry” mean to you? Apparently my definition differs from that of a politician’s, as noted in a good article about where the various government ideas stand on helping the mortgage situation: http://money.cnn.com/2008/01/03/real_estate/bush_housing_Congress/  Speaking of this, the Mortgage Bankers Association has changed their stance and is now backing stand-alone legislation that would allow Fannie Mae and Freddie Mae to purchase jumbo loans of up to $625,000 nationwide on a temporary basis. “The increase should be in effect for no less than 12 months, and up to 24 months if market conditions warrant,” the MBA says in a letter to the Office of Federal Housing Enterprise Oversight. (The MBA previously opposed a temporary hike in the conforming lending limit unless it was part of a comprehensive bill to strengthen the regulation and supervision of the government-sponsored enterprises.)

• Federal Housing Finance Reform. The House voted 313-104 last May (!) to strengthen oversight of Fannie Mae and Freddie Mac, quasi-governmental companies that buy mortgages from banks and bundle them into tradable securities. The Senate has not yet taken action.
• Expanding American Homeownership Act. The House voted 348-72 in September to give the FHA more flexibility to help financially struggling homeowners refinance their mortgages. In December, the Senate voted 93-1 in favor of its version of the bill, called the FHA Modernization Act. But the bills differ significantly, so House and Senate leaders will have to reconcile the competing versions to come up with final legislation.
• National Affordable Housing Trust Fund Act. The House voted 264-148 in October to establish a trust fund to build or preserve 1.5 million low-cost homes and apartments over 10 years, using fees paid by Fannie Mae and Freddie Mac. The Senate has not yet acted, and President Bush has threatened a veto.
• Mortgage Reform and Anti-Predatory Lending Act. The House voted 291-127 in November in favor of legislation to license mortgage originators and prohibit brokers from steering prime borrowers to more expensive subprime loans. In December Senate Banking Committee Chairman Dodd introduced a similar bill, the Homeownership and Preservation Act, and is expected to get it moving early in the year.

This week there a lack of relevant of economic data scheduled, and hopefully we will see a relatively calm week in mortgage rates & prices. Frankly no one is complaining about rates anyway – just finding qualified borrowers with equity in their homes is enough right now. The data that is scheduled for release this week is relatively minor, so there is a good possibility that mortgage rates will remain steady. Last week’s December jobs report has increased fears among investors that the US economy is closer to a recession than initially believed. The market now believes that there is a 67% chance of 50 bp rate cut at the FOMC meeting in three weeks. There is no news today, Pending Home Sales tomorrow, Jobless Claims Thursday, and then on Friday we have the Trade Balance figures. Fed Chairman Bernanke will speak in Washington on Thursday, and given the recent spate of economically weak data, the markets will pay careful attention to his focus on future Fed rate cuts.

The pace of defaults on privately insured mortgages soared almost 35%, reaching the highest level since the data was first collected in 2001, according to data from MCIC, PMI, AIG, Old Republic, and Triad. The association said 61,300 insured borrowers were at least 60 days late on payments in November. That’s up 35% from a year earlier and up 3% from October. The number had not exceeded 60,000 since data was first collected in 2001. Policy-wise, due to tougher underwriting guidelines, the number of policies issued in November totaled 153,865, up 67% from a year earlier, the association said. For the first nine months of 2007, the number of policies issued rose 42%.

Sean went to visit his dying friend, Kennedy, in Dublin. “Sean”, says Kennedy, “I’m not long for this world and I have a favor to be asking of you”

“Sure”, says Sean, “anything you need”.

Says Kennedy, “I want you to pour this here bottle of 100 year old whiskey over me grave when I am dead and gone.”

Sean responds, “It’s an honor you’re asking of me and I’m proud to do it. But…I’m wondering, would ye mind if I strained it through me kidneys first?”

Rob