Daily Archives: July 9, 2010

Pete the Banker: Geithner Sees Signs of Housing Market Stabilization, Experts See Bad News Ahead and a Housing Double Dip

More whoppers from Treasury Secretary Tim Geither as reported here recently:

“Treasury Secretary Timothy Geithner defended financial policies initiated under the Troubled Asset Relief Program (TARP), linking them to improved economic conditions over the past year. …. Geithner said delinquencies for many loan categories appear to have peaked, and home prices are showing signs of stabilization.”  

Nice timing Secretary, since most housing analysts are warning of a double dip in housing fueled by falling sales of new and existing homes and the failed Home Affordable Mortgage (Modification) Program (here).  
The recent Office of Comptroller Metrics report (page36), disclosed that approximately 41% of loan modifications made in the second quarter of 2009 were now more than 60 days delinquent.  Those for the first quarter of 2009 were over 50%. The failure rate on loans modified during the 4th quarter of 2008 was over 50% after nine months of aging and nearly 58% twelve months after modification (here).    Recidivism continues to be a problem in the Home Affordable Mortgage Modification Program (HAMP), increasing the inventory of homes on the market, placing downward pressure on home prices and dragging out the housing crisis.
This is just another case of those in Washington DC being out of touch with the American public.  Since the expiration of the First Time Homeowner Tax Credit on April 30 and despite record low mortgage interest rates, sales of homes and mortgage applications for home financing have plunged.  Meanwhile, the Secretary trumpets housing market stabilization. 
Resign Mr. Secretary.  You are out of touch with reality!!  



Tell ’em where you saw it. Http://www.victoriataft.com

Pete the Banker: Financial Reform: FAIL

by Pete the Banker
Judd Gregg, known as an independent Senate voice and the ranking Republican on the Senate Budget Committee and Senate Banking Committee member, suggests that the Financial Reform package is a failure, addressing none of major causes of the credit and capital market crisis of 2007 (here).
 “In an effort that should be geared toward correcting deficiencies in our regulatory structure, and during a time when we should be focused on economic recovery, this legislation is a failure on both counts.  It will not encourage much-needed stability and confidence in our financial markets.  It will not significantly reduce systemic risk in our financial sector.” 
And he says it won’t do anything to solve the fundamental problems:
“Ironically, the most remarkable feature of this supposedly comprehensive measure is its failure to substantively address the root causes of the 2008 crisis – shoddy underwriting practices and the government sponsored enterprises, Fannie Mae and Freddie Mac.  The legislation also includes extraneous provisions which have little to do with preventing another financial crisis…” 
Among extraneous items addressed by the bill include debit card fees, payday loans, and pawnbrokers.  And, of course, in the tradition of the Democrat drafted legislation of the past year, the bill contains subsidies inclusive of further mortgage relief funding. 
The House passed the reconciliation version of this Bill before recess last week.  The Senate is unlikely to pass it until they return from the Fourth of July recess.  Senators Scott Brown, Collins, Snowe, Grassley, and of all people Senator Feingold have not definitively indicated whether or not they will support the House reconciliation version of the Bill which removed further bank taxes instead relying on existing TARP funds to replace the taxes.
 
Tell ’em where you saw it. Http://www.victoriataft.com

Pete the Banker: Geithner Sees Signs of Housing Market Stabilization, Experts See Bad News Ahead and a Housing Double Dip

More whoppers from Treasury Secretary Tim Geither as reported here recently:

“Treasury Secretary Timothy Geithner defended financial policies initiated under the Troubled Asset Relief Program (TARP), linking them to improved economic conditions over the past year. …. Geithner said delinquencies for many loan categories appear to have peaked, and home prices are showing signs of stabilization.”  

Nice timing Secretary, since most housing analysts are warning of a double dip in housing fueled by falling sales of new and existing homes and the failed Home Affordable Mortgage (Modification) Program (here).  
The recent Office of Comptroller Metrics report (page36), disclosed that approximately 41% of loan modifications made in the second quarter of 2009 were now more than 60 days delinquent.  Those for the first quarter of 2009 were over 50%. The failure rate on loans modified during the 4th quarter of 2008 was over 50% after nine months of aging and nearly 58% twelve months after modification (here).    Recidivism continues to be a problem in the Home Affordable Mortgage Modification Program (HAMP), increasing the inventory of homes on the market, placing downward pressure on home prices and dragging out the housing crisis.
This is just another case of those in Washington DC being out of touch with the American public.  Since the expiration of the First Time Homeowner Tax Credit on April 30 and despite record low mortgage interest rates, sales of homes and mortgage applications for home financing have plunged.  Meanwhile, the Secretary trumpets housing market stabilization. 
Resign Mr. Secretary.  You are out of touch with reality!!  



Tell ’em where you saw it. Http://www.victoriataft.com

Pete the Banker: Financial Reform: FAIL

by Pete the Banker
Judd Gregg, known as an independent Senate voice and the ranking Republican on the Senate Budget Committee and Senate Banking Committee member, suggests that the Financial Reform package is a failure, addressing none of major causes of the credit and capital market crisis of 2007 (here).
 “In an effort that should be geared toward correcting deficiencies in our regulatory structure, and during a time when we should be focused on economic recovery, this legislation is a failure on both counts.  It will not encourage much-needed stability and confidence in our financial markets.  It will not significantly reduce systemic risk in our financial sector.” 
And he says it won’t do anything to solve the fundamental problems:
“Ironically, the most remarkable feature of this supposedly comprehensive measure is its failure to substantively address the root causes of the 2008 crisis – shoddy underwriting practices and the government sponsored enterprises, Fannie Mae and Freddie Mac.  The legislation also includes extraneous provisions which have little to do with preventing another financial crisis…” 
Among extraneous items addressed by the bill include debit card fees, payday loans, and pawnbrokers.  And, of course, in the tradition of the Democrat drafted legislation of the past year, the bill contains subsidies inclusive of further mortgage relief funding. 
The House passed the reconciliation version of this Bill before recess last week.  The Senate is unlikely to pass it until they return from the Fourth of July recess.  Senators Scott Brown, Collins, Snowe, Grassley, and of all people Senator Feingold have not definitively indicated whether or not they will support the House reconciliation version of the Bill which removed further bank taxes instead relying on existing TARP funds to replace the taxes.
 
Tell ’em where you saw it. Http://www.victoriataft.com