Upside-Down Barney Frank’s subprime debt-relief plan is chock-full of perverse incentives- bad …  the plan would give up-to-date borrowers a powerful incentive go delinquent on their loans, perhaps on a massive scale. This is supposed to help fix the problem?  – Tom Brown – bankstocks.com  

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Wachovia Tightens Standards for Home Loans Nationally -  Wachovia Corp., the fourth-largest U.S. bank, will require minimum credit scores for mortgage borrowers and will reduce loan-to-value ratios because of the weak U.S. housing market. Beginning April 26, the bank will rate markets as either “stable”, “watch” or “distressed” … -   Bloomberg 
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Fannie Working on Mortgage Plan – Fannie Mae will allow more struggling homeowners to sell their homes for less than they owe on their mortgages in a gambit that could hit the mortgage finance company with upfront losses but stave off massive hemorrhage from foreclosures.  The program by the largest U.S. financier and guarantor of home mortgages addresses homeowners with “upside-down” loans who owe more than their homes are worth. There are now an estimated 9 million U.S. homeowners in that predicament, according to Moody’s Economy.com.  – MARCY GORDON – AP Google
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The Next Unsustainable Asset Bubble - Chuck Saletta -  Motley Fool

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1.  Builder Bailout Recap – … Be aware that if this provision becomes law, it will incentivize builders to dump assets at levels and prices that were previously imprudent and economically unfeasible in an attempt to reclaim cash in the form of back taxes. This will exacerbate the strain on the financial sector since it is the devalution of real assets that triggered much of this mess in the first place.  … – Reggie Middleton -  BoomBustBlog 

2.  Homebuilder bailout – updated analysis – Reggie Middleton -  BoomBustBlog 

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Getting Ready: First Quarter Statement 157 Disclosures – If I haven’t mentioned it lately, I’ll say it again: Statement 157 is nothing new under the sun. … With all the misguided bashing of Statement 157 going on , it’s hard to remember that it hasn’t even become effective yet . Not until this quarter. …  – Jack Ciesielski  -  AccountingObserver.com 

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On Robert Shiller – I want to thank one of my former students from Boston College, Harry Markopolos, for sending me his notes from a talk delivered last month by Robert Shiller to members of the Boston Security Analyts Society. … Interestingly, Shiller said that in every market he examined, lower-priced homes exhibited the greatest price increases during the recent housing bubble. He attributes this to the widespread availability of sub-prime mortgages … MoneyMasters with Vahan Janjigian

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interesting chart – Postal Service Again Vexes Penny Pinchers – PHYLLIS KORKKI – NY Times

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Site seeks to level field for loan settlements – … Nearly a dozen settlement services are necessary to close on a home loan and the borrower pays for most, if not all, of them. … Fairclosingcosts.com intends to list contact information for providers of nine settlement services—closing or settlement agents, title insurance, appraisals, notaries, homeowners insurance, surveyors, home inspectors, warranty companies and termite inspectors … – LEW SICHELMAN -  Chicago Tribune

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1.  Jefferson County Alabama – you need to know about this - The Largest U.S. Municipal Bankruptcy Looms in Alabama. What caused this mess is an interest rate swap Jefferson County officials entered into when they financed a $3.2 billion sewer cleanup. -  globaleconomicanalysis

2.  JOE MYSAK – Largest U.S. Municipal Bankruptcy Looms in Alabama – They’re talking more about Chapter 9 municipal bankruptcy in Jefferson County, Alabama, the home of the largest city in the state, Birmingham. – Bloomberg 

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Chart of the Day – Today, the price of a barrel of crude oil closed just shy of the $110 level as geopolitical tensions continue and oil suppliers struggle to keep up with demand. With oil prices rising, it is not all that surprising to find that gasoline prices are following suit. Over the past six months, the average US price for a gallon of unleaded has risen 51 cents per gallon. When adjusted for inflation, gasoline prices are at 27-year highs and within 2% of the inflation-adjusted peak of 1981.  – Chart of the Day 

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Illegal immigrants pay taxes, too – … Illegal immigrants are paying taxes to Uncle Sam, experts agree. Just how much they pay is hard to determine because the federal government doesn’t fully tally it. But the latest figures available indicate it will amount to billions of dollars in federal income … – AZ Central 

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1.  It’s a Long, Cold, Cashless Siege – about auction rate securities -  GRETCHEN MORGENSON – NY Times

2.  Auction Market Shrinks by $51 Billion, With Failure Rate at 71% – Bloomberg  

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You Thought You Had an Equity Line – GRETCHEN MORGENSON -  NY Times

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LT2 Callable Notes – Another Flavor of Bonds Threatens to Turn Sour – … another market threatens to go sour, potentially leaving investors holding the bag for more than $9 billion of tarnished European bank debt.  … -  Mark Gilbert -  Bloomberg

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Steered Wrong: Brokers, Borrowers, and Subprime Loans – 52 page paper – In this report, we analzyed broker pricing patterns by comparing the cost of loans provided by mortgage brokers to those provided by retail lenders, such as banks, credit unions, and mortgage bankers.  We analyzed more than 1.7 million mortgages originated between 2004 and 2006 and compared “matched pairs” of loans with similar risks to contrast the experience of borrowers who received loans from brokers and retail lenders.  -  Center for Responsible Lending

posted by Bill Coppedge