This quote is from a May 7, 08 NYTimes article re: the 2 Major Mortgage Players in our market. This is a GIANT wake up call to investors and regulators, and I hope someone is listening!
"The companies are sitting on as much as $19 billion in additional losses that they have not yet fully acknowledged, analysts say. If either company stumbled, the mortgage business could lose its only lubricant, potentially causing the housing market to plummet and the credit markets to freeze up completely."
Here is a link to the complete article...
http://www.nytimes.com/2008/05/06/business/06fannie.html?_r=1&scp=1&sq=May+6%2C+2008+Fannie&st=nyt&oref=slogin
Wednesday, May 07, 2008
Tuesday, May 06, 2008
Bernanke tells Lenders to Get Hoppin'!
"Foreclosures Must Be Averted for Sake of Economy"
By Stephen Huebl and edited by Nancy Girgis
Fed Chairman Ben Bernanke said accelerating rates of foreclosures and delinquencies can have a significant impact on the economy and called for more to be done in order to prevent them.
Speaking Monday night at the Columbia Business School's 32nd annual dinner, Bernanke said the rate of foreclosures will likely increase in 2008 and that traditional anti-foreclosure steps may not be working to prevent them. He also said sharp declines in home prices can have a negative impact on the overall economy."High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets, and the broader economy," he said. "Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It's in everybody's interest."
He said government-sponsored enterprises Fannie Mae and Freddie Mac should raise more capital and "could do more" to help ease the crisis. He also called for clear disclosures of home-loan modifications.
"Additional government policies can help address problems in the mortgage markets," he said.
"The Congress can take an important step by moving quickly to reconcile and enact legislation permitting the Federal Housing Administration (FHA) to increase its scale and improve its management of risks."
Bernanke also said the best solution is sometimes a mortgage writedown.
Bernanke did not comment on the outlook for interest rates.
By Stephen Huebl and edited by Nancy Girgis
Fed Chairman Ben Bernanke said accelerating rates of foreclosures and delinquencies can have a significant impact on the economy and called for more to be done in order to prevent them.
Speaking Monday night at the Columbia Business School's 32nd annual dinner, Bernanke said the rate of foreclosures will likely increase in 2008 and that traditional anti-foreclosure steps may not be working to prevent them. He also said sharp declines in home prices can have a negative impact on the overall economy."High rates of delinquency and foreclosure can have substantial spillover effects on the housing market, the financial markets, and the broader economy," he said. "Therefore, doing what we can to avoid preventable foreclosures is not just in the interest of lenders and borrowers. It's in everybody's interest."
He said government-sponsored enterprises Fannie Mae and Freddie Mac should raise more capital and "could do more" to help ease the crisis. He also called for clear disclosures of home-loan modifications.
"Additional government policies can help address problems in the mortgage markets," he said.
"The Congress can take an important step by moving quickly to reconcile and enact legislation permitting the Federal Housing Administration (FHA) to increase its scale and improve its management of risks."
Bernanke also said the best solution is sometimes a mortgage writedown.
Bernanke did not comment on the outlook for interest rates.
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