Obama May Prohibit Home-Loan Foreclosures Without HAMP Review – Bloomberg
The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.
U.S. Economy Grew at 5.9% Annual Pace Last Quarter – Bloomberg
The rise in gross domestic product, which exceeded the median forecast of economists surveyed by Bloomberg News, marked the best performance in more than six years, the Commerce Department said today in Washington. Inventories added 3.88 percentage points to GDP, more than previously reported, and investment in software and equipment grew at the fastest pace in almost a decade.
GDP Contraction Coming In Second Quarter 2010? – Mish
Couple that with the fact that New Home Sales Unexpectedly Plunge to Record Low it should not be too hard to envision a flat to negative GDP decline in the second or third quarter unless things turn around right now.
Underwater Home-Owers: Demand Principal Reductions – The Big Picture
The FDIC is proposing a test program of principle reduction for negative equity homeowners.
But why is the FDIC required? An intriguing private sector solution would be a negotiated principle reduction between borrower and lender — no government intervention is needed.
FDIC to test principal reduction for underwater borrowers – The Washington Post
Under the FDIC program, borrowers would be eligible for a reduction in their mortgage balances if they kept up their payments on the mortgage over a long period. The performance of those borrowers would be compared with borrowers given more traditional mortgage relief packages, such as those that cut the interest rate on loans.
Better to Wait Until Home Buyer Tax Credit Expires? - The Wall Street Journal
The home builders and Realtors are jazzed for the home buyer tax credit’s remaining weeks. It’s tempting for home buyers to get caught up in the hype. But perhaps you’re better off waiting?
Housing Woes To Continue, More Losses Coming – HuffPo
While housing prices have temporarily stabilized, giving some homeowners some relief, Patrick Newport, an economist with IHS Global Insight, said he expects housing prices to decrease again later this year. He also said he expects a substantial number of home foreclosures (which would drive down housing prices) — perhaps as much if not more than last year’s record total of 2.8 million. More than 3 million homeowners could lose their homes this year, analysts predict.
Newport points out that while the high unemployment rate is largely behind borrowers increasingly falling behind on their mortgage payment, “the one wildcard that no one has a good handle on right now…is strategic defaults.” Those are also known as walkaways.
Hamp-lified, moral hazard outrage du jour – FT Alphaville
We’ve reached a stage in this crisis where lenders have no rights. The long-run distortions from such a heavy handed interventionist approach are too long to list right now, but suffice it to say, this will do more to exacerbate and prolong the deleveraging cycle than solve it.
