Mortgages and Housing: Fitch on Low Rates, PIMCO Levers MBS, FN Hates Writedowns, Renters Ignored, Ben B Speaks, Zandi Loves Writedowns, Taxpayers Bailout CA HELOCs, The Only Answer, NEW QRM Rule?, PIMCO on FC Deal, Tom Brown Hates It, Solution at Hand?, (Gunning for DeMarco) FHFA Fakes $100 Billion?

BillCoppedge_26Nov2011original content selection by MortgageNewsClips.com

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Fitch: Low Rates Providing Limited Help to Weakest U.S. Mortgage Borrowers – BUSINESS WIRE) – The Federal Open Market Committee’s (FOMC’s) expectation of low interest rates through 2014, while benefiting the U.S. Prime mortgage sector, will provide little direct help to Subprime mortgage borrowers, according to Fitch Ratings. … However, Prime borrowers have benefited more than weaker borrowers. Since 2009, approximately 40% of all Prime RMBS borrowers have been able to refinance into lower-rate loans. … In contrast, only 5% of Subprime RMBS borrowers have been able to voluntarily refinance since 2009. … – Marketwatch

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Pimco Borrows A Record $88 Billion To Bet On Fed’s Upcoming MBS Monetization – Submitted by Tyler Durden – … However, in absolute dollar terms, due to the growth of the fund’s AUM, the actual bet on MBS has never been bigger, and at $125 billion, represents the biggest notional bet ever made by PIMCO. Treasury holdings of just over $100 billion with an effective duration of 6.33 complete the epic bet that the fund has now put on QE3. … – Zero Hedge

and from Warren Buffett: Bonds: The Riskiest Investments of All - Surly Trader Blog – … Even in the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire. It takes no less than $7 today to buy what $1 did at that time. Consequently, a tax-free institution would have needed 4.3% interest annually from bond investments over that period to simply maintain its purchasing power. Its managers would have been kidding themselves if they thought of any portion of that interest as “income.” …

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Fannie Mae: Principal write-downs pose challenges – Reuters – Fannie Mae, the largest U.S. mortgage finance provider, on Thursday said a plan to reduce loan balances for troubled homeowners had proved too difficult to carry out on a broad scale when tested in pilot programs. … “Our initiatives have been based on a careful analysis of effectiveness and cost, not on ideology,” said Kelli Parsons, Fannie Mae’s chief communications officer. The company used small-scale pilots to assess “borrower behavior and whether the benefits of principal reduction outweigh the associated costs and risks,” she said. … – Chicago Tribune
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(renters: ignored but potentially huge lobbying force) Rental nation - Agnes T. Crane – (hattip NDP) … The 44-and-under crowd has been hard hit, with their homeownership rate falling by more than seven percentage points since 2005 to 62.3 percent, according to the U.S. Census Bureau. This matters since they will tell their tales for years to come, potentially undermining the belief that homeownership is part and parcel of American prosperity. … A rhetorical uprising of renters could refocus and reinvigorate this discussion. They lack the artificial aura of maturity and material success that seems to attach to owning a home in the United States. But that perception of renting could change. Just look at Germany. … – Breakingviews
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Speech – Chairman Ben S. Bernanke At the 2012 National Association of Homebuilders International Builders’ Show, Orlando, Florida – Housing Markets in TransitionFed Board of Governors – (NDP says this is a plug for the NAR)

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Zandi: If Only the GSEs Adopted a Principal Reduction Program… – Brian Collins – If the GSEs initiated a principal reduction program similar to the one outlined in the robo-signing settlement, roughly 650,000 borrowers could benefit, distressed sales would level off, and home values would “stabilize,” according to Moody’s Analytics chief economist Mark Zandi. – National Mortgage News
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(long and worth it) US taxpayers about bail out California HELOC abusers – … Let’s be honest about what this is. It’s theft, pure and simple. Loan owners and banks are reaching into the wallets of every American and taking money to cover the losses lenders and loan owners should endure. I was not a party to their transaction, yet I am paying their bill. And for what? What greater societal good comes from this? Instead of a long-term investment or other beneficial use, these dollars promote moral hazard and ensure long-term societal problems. … – OC Housing News
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No One Wants To Talk About The Only Thing That Will Solve The Mortgage Crisis – Dylan Ratigan, The Huffington Post – … For the last three years, the policy has been to impose a political solution to a math problem. It hasn’t worked. America simply has too much mortgage debt to pay back. … there is only one solution — writing down the enormous creaking mound of debt. This solution is currently off the table, because writing down these unsustainable debts could cost our fragile banks enormous sums of money and possibly lead to a restructuring of one or more of our major banks. 

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Regulators Expected to Pull QRM Rule and Issue Another – Brian Collins – … Sources told National Mortgage News the regulators are going to pull the QRM proposal and issue a new proposed rule for public comment. "There are signs the QRM rule may go back to the drawing board," Stevens told reporters last week. Meanwhile, the Consumer Financial Protection Bureau is working on the "ability to repay" standard which is called the “qualified mortgage” or QM rule. …
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Pimco Says Foreclosure Deal Cheaper for Banks Than Pensions – (Bloomberg) — The government’s deal with banks over their foreclosure practices after 16 months of investigations is cheap for the loan servicers while costly for bond investors including pension funds, according to Pacific Investment Management Co.’s Scott Simon.

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Unfair All Around – Thomas Brown  – The AGs’ mortgage settlement with the banks gives rewards to people who don’t deserve them, and will end up being counterproducitveBankstocks.com    
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A Solution to the Housing Crisis Could Be at Hand - By Peter Coy and Prashant Gopal - Short sales and other measures are starting to clear the backlog – Bloomberg Businessweek

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FHFA’s Fake $100 Billion Number – posted by Alan White – The critical point made in the Democratic Congressmen’s letter to FHFA is this:  Director DeMarco’s widely reported claim that principal write-downs on Fannie and Freddie mortgages will cost taxpayers $100 billion is simply false.  There are two reasons the statement is a complete misrepresentation.  First, the $100 billion is simply the aggregate amount of underwater mortgage principal on all Fannie and Freddie loans, not just those at risk of foreclosure or where borrowers are seeking modifications.  Second, Fannie and Freddie will lose more than $100 billion on underwater loans in foreclosure sales, according to their own projections, if the loans aren’t given principal write-downs. – Credit Slips 

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