On Topic: Housing finance system overhaul

[Diego Mamani]

I’ve seen a lot of noise in the news lately about the govnernment overhauling the FHA/Fannie/Freddie system. This will have the effect of higher mortgage interest rates, simply because no private party will lend you at 5% fixed for 30 years unless the taxpayers guarantee the loan.

The plan being discussed by the administration calls for substantially reducing the level of government intervention in the mortage market.

Reuters piece (although I saw other articles over the last 2-4 days):

http://www.reuters.com/article/2011/02/08/us-usa-housing-idUSTRE70R80420110208

[briansd1]

From the article:

As part of its proposal, the administration is considering backing a scheduled decrease in the so-called conforming loan limit, a cap on the size of mortgages that FHA, Fannie Mae and Freddie Mac can guarantee, the sources said.

The loan limits are set to fall from $729,500 to $625,500 at the end of September. The sources added that the administration may take further steps to reduce the loan limit.

That will affect the high end.

I see a long period of stagnation in house prices as the government steps away from mortgage guarantee.

[briansd1]

From the article:

As part of its proposal, the administration is considering backing a scheduled decrease in the so-called conforming loan limit, a cap on the size of mortgages that FHA, Fannie Mae and Freddie Mac can guarantee, the sources said.

The loan limits are set to fall from $729,500 to $625,500 at the end of September. The sources added that the administration may take further steps to reduce the loan limit.

That will affect the high end.

I see a long period of stagnation in house prices as the government steps away from mortgage guarantee.

[briansd1]

From the article:

As part of its proposal, the administration is considering backing a scheduled decrease in the so-called conforming loan limit, a cap on the size of mortgages that FHA, Fannie Mae and Freddie Mac can guarantee, the sources said.

The loan limits are set to fall from $729,500 to $625,500 at the end of September. The sources added that the administration may take further steps to reduce the loan limit.

That will affect the high end.

I see a long period of stagnation in house prices as the government steps away from mortgage guarantee.

[briansd1]

From the article:

As part of its proposal, the administration is considering backing a scheduled decrease in the so-called conforming loan limit, a cap on the size of mortgages that FHA, Fannie Mae and Freddie Mac can guarantee, the sources said.

The loan limits are set to fall from $729,500 to $625,500 at the end of September. The sources added that the administration may take further steps to reduce the loan limit.

That will affect the high end.

I see a long period of stagnation in house prices as the government steps away from mortgage guarantee.

[briansd1]

From the article:

As part of its proposal, the administration is considering backing a scheduled decrease in the so-called conforming loan limit, a cap on the size of mortgages that FHA, Fannie Mae and Freddie Mac can guarantee, the sources said.

The loan limits are set to fall from $729,500 to $625,500 at the end of September. The sources added that the administration may take further steps to reduce the loan limit.

That will affect the high end.

I see a long period of stagnation in house prices as the government steps away from mortgage guarantee.

[briansd1]

As was mentioned on another thread, mortgage rates are up substantiall from the lows.

Let’s see what the Administration proposes on Friday.

The headwind poses a Catch-22 for the Obama administration, which is due to release proposals on Friday for reducing the government’s involvement in the housing market.

Doing nothing would leave taxpayers exposed to potential further bailouts, but acting too aggressively could drive interest rates higher, strangle demand and freeze lending.

“Everyone agrees there needs to be sustained and meaningful change, it’s just that the shock-and-awe treatment is probably not the best solution because it’s going to have unintended consequences,” said Cameron Findlay, chief economist at Lending Tree in Irvine, California.

Signs of strength in other areas of the economy have already pushed up interest rates as investors worry the Federal Reserve will be forced to hike its benchmark interest rate sooner than had been anticipated

http://www.reuters.com/article/2011/02/09/usa-economy-mortgages-idUSN0915805320110209

[briansd1]

As was mentioned on another thread, mortgage rates are up substantiall from the lows.

Let’s see what the Administration proposes on Friday.

The headwind poses a Catch-22 for the Obama administration, which is due to release proposals on Friday for reducing the government’s involvement in the housing market.

Doing nothing would leave taxpayers exposed to potential further bailouts, but acting too aggressively could drive interest rates higher, strangle demand and freeze lending.

“Everyone agrees there needs to be sustained and meaningful change, it’s just that the shock-and-awe treatment is probably not the best solution because it’s going to have unintended consequences,” said Cameron Findlay, chief economist at Lending Tree in Irvine, California.

Signs of strength in other areas of the economy have already pushed up interest rates as investors worry the Federal Reserve will be forced to hike its benchmark interest rate sooner than had been anticipated

http://www.reuters.com/article/2011/02/09/usa-economy-mortgages-idUSN0915805320110209

[briansd1]

As was mentioned on another thread, mortgage rates are up substantiall from the lows.

Let’s see what the Administration proposes on Friday.

The headwind poses a Catch-22 for the Obama administration, which is due to release proposals on Friday for reducing the government’s involvement in the housing market.

Doing nothing would leave taxpayers exposed to potential further bailouts, but acting too aggressively could drive interest rates higher, strangle demand and freeze lending.

“Everyone agrees there needs to be sustained and meaningful change, it’s just that the shock-and-awe treatment is probably not the best solution because it’s going to have unintended consequences,” said Cameron Findlay, chief economist at Lending Tree in Irvine, California.

Signs of strength in other areas of the economy have already pushed up interest rates as investors worry the Federal Reserve will be forced to hike its benchmark interest rate sooner than had been anticipated

http://www.reuters.com/article/2011/02/09/usa-economy-mortgages-idUSN0915805320110209

[briansd1]

As was mentioned on another thread, mortgage rates are up substantiall from the lows.

Let’s see what the Administration proposes on Friday.

The headwind poses a Catch-22 for the Obama administration, which is due to release proposals on Friday for reducing the government’s involvement in the housing market.

Doing nothing would leave taxpayers exposed to potential further bailouts, but acting too aggressively could drive interest rates higher, strangle demand and freeze lending.

“Everyone agrees there needs to be sustained and meaningful change, it’s just that the shock-and-awe treatment is probably not the best solution because it’s going to have unintended consequences,” said Cameron Findlay, chief economist at Lending Tree in Irvine, California.

Signs of strength in other areas of the economy have already pushed up interest rates as investors worry the Federal Reserve will be forced to hike its benchmark interest rate sooner than had been anticipated

http://www.reuters.com/article/2011/02/09/usa-economy-mortgages-idUSN0915805320110209

[briansd1]

As was mentioned on another thread, mortgage rates are up substantiall from the lows.

Let’s see what the Administration proposes on Friday.

The headwind poses a Catch-22 for the Obama administration, which is due to release proposals on Friday for reducing the government’s involvement in the housing market.

Doing nothing would leave taxpayers exposed to potential further bailouts, but acting too aggressively could drive interest rates higher, strangle demand and freeze lending.

“Everyone agrees there needs to be sustained and meaningful change, it’s just that the shock-and-awe treatment is probably not the best solution because it’s going to have unintended consequences,” said Cameron Findlay, chief economist at Lending Tree in Irvine, California.

Signs of strength in other areas of the economy have already pushed up interest rates as investors worry the Federal Reserve will be forced to hike its benchmark interest rate sooner than had been anticipated

http://www.reuters.com/article/2011/02/09/usa-economy-mortgages-idUSN0915805320110209

[Diego Mamani]

And now this:

http://finance.yahoo.com/news/Era-of-superlow-mortgage-apf-971054509.html?x=0&sec=topStories&pos=7&asset=&ccode#mwpphu-container

The mainstream media is reporting that mortgage rates are 100 basis points (bps) higher than some months ago. Our friend SD-R alerted us yesterday:

http://piggington.com/tnx_up_100bps

The Yahoo Finance article mistakenly attributes the increase to a stronger economy. IMHO, rates are up due to inflation expectations. I’m not talking Weimar-style hyperinflation, but the possibility of 1970s-style inflation approaching or even surpassing 10%.

Of course, I’m not talking about next week or the next two quarters. Rather, I mean to say that inflation over the next 10 years will be substantially higher than over the previous 10. Whatever you do, don’t keep your assets in cash.

[Diego Mamani]

And now this:

http://finance.yahoo.com/news/Era-of-superlow-mortgage-apf-971054509.html?x=0&sec=topStories&pos=7&asset=&ccode#mwpphu-container

The mainstream media is reporting that mortgage rates are 100 basis points (bps) higher than some months ago. Our friend SD-R alerted us yesterday:

http://piggington.com/tnx_up_100bps

The Yahoo Finance article mistakenly attributes the increase to a stronger economy. IMHO, rates are up due to inflation expectations. I’m not talking Weimar-style hyperinflation, but the possibility of 1970s-style inflation approaching or even surpassing 10%.

Of course, I’m not talking about next week or the next two quarters. Rather, I mean to say that inflation over the next 10 years will be substantially higher than over the previous 10. Whatever you do, don’t keep your assets in cash.

[Diego Mamani]

And now this:

http://finance.yahoo.com/news/Era-of-superlow-mortgage-apf-971054509.html?x=0&sec=topStories&pos=7&asset=&ccode#mwpphu-container

The mainstream media is reporting that mortgage rates are 100 basis points (bps) higher than some months ago. Our friend SD-R alerted us yesterday:

http://piggington.com/tnx_up_100bps

The Yahoo Finance article mistakenly attributes the increase to a stronger economy. IMHO, rates are up due to inflation expectations. I’m not talking Weimar-style hyperinflation, but the possibility of 1970s-style inflation approaching or even surpassing 10%.

Of course, I’m not talking about next week or the next two quarters. Rather, I mean to say that inflation over the next 10 years will be substantially higher than over the previous 10. Whatever you do, don’t keep your assets in cash.

[Diego Mamani]

And now this:

http://finance.yahoo.com/news/Era-of-superlow-mortgage-apf-971054509.html?x=0&sec=topStories&pos=7&asset=&ccode#mwpphu-container

The mainstream media is reporting that mortgage rates are 100 basis points (bps) higher than some months ago. Our friend SD-R alerted us yesterday:

http://piggington.com/tnx_up_100bps

The Yahoo Finance article mistakenly attributes the increase to a stronger economy. IMHO, rates are up due to inflation expectations. I’m not talking Weimar-style hyperinflation, but the possibility of 1970s-style inflation approaching or even surpassing 10%.

Of course, I’m not talking about next week or the next two quarters. Rather, I mean to say that inflation over the next 10 years will be substantially higher than over the previous 10. Whatever you do, don’t keep your assets in cash.

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