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NEW -> Contingent Buyer Assistance Program
The irony is delicious. . ..



<a href="http://www.cnbc.com/id/23995869">http://www.cnbc.com/id/23995869</a>



Mortgage Bankers Association Can't Pay The...Mortgage?

By Diana OlickCNBC Real Estate Reporter

cnbc.com

| 07 Apr 2008 | 11:44 AM ET

I?m sure there are plenty of troubled borrowers around the country who will do a bit more than chortle when they hear the story of how the Mortgage Bankers Association is having trouble paying the mortgage on its new building in downtown DC.



Due to the crisis in the credit market, the price of a loan these days is higher than ever. Folks at the MBA of course didn?t know that when they bought a 160,000 square foot, 12-story building in downtown DC. The association will now reportedly have to pay millions of dollars more than they would have just a year ago, when they signed the contract on the deal.



The Washington Post did an article on this over the weekend, of course including a quote from a liberal housing watcher who claims they?re getting what they deserve. But it's worse than just credit costs. Yes, the cost of money more expensive (the building?s price is $100 million and they now have to put down 10 percent more than planned), but on top of that revenue for the association is down 10-15 percent, thanks to some of their members going out of business, and the leasing market is slow, so they don?t have any tenants.





So the MBA is now cutting expenses, laying off some employees, and clearly hoping the housing market turns around soon. Yep, it?s easy to laugh at the irony, but I don?t find it funny. Of all the associations I talk to on a daily basis on this beat, they?ve been the most up-front publicly about what went wrong, right from the start.



They are actively supporting mortgage banking reform on the Hill and I see a representative at every one of those (seemingly constant) Treasury conferences on saving troubled borrowers. Most of their members aren?t thieves, even if some of them are. And no, I?m not related to any mortgage bankers.
 
Hmmm....perhaps this is why the market refuses to quit. The Wall Street brokerages have been tapping the FED for 30 BILLION A DAY! Wow.





Investment firms tap Fed for billions

By Jeannine Aversa





WASHINGTON ? Big Wall Street investment companies are stepping up their borrowing a bit from the Federal Reserve?s unprecedented emergency lending program.



The Federal Reserve reported Thursday that those firms averaged $38.1 billion in daily borrowing over the past week from the new lending program. That compared with $32.9 billion in the previous week and $13.4 billion in the first week the lending facility opened.



The program, which began on March 17, is part of the Fed?s effort to aid the financial system.



The Fed, for the first time, agreed to let big investment houses temporarily get emergency loans directly from the central bank. This mechanism, similar to one available for commercial banks for years, will continue for at least six months. It was the broadest use of the Fed?s lending authority since the 1930s.



Fed Chairman Ben Bernanke and his colleagues opened the facility as it raced to deal with the sudden crash of the venerable Wall Street firm Bear Stearns, which was on the brink of bankruptcy. Fearful that other investment firms could be in jeopardy given the intense fear that gripped the markets at that time, the Fed moved to give investment firms a place to go for overnight cash loans.



Doing this was ?a very substantial step,? Bernanke told lawmakers at a Senate Banking Committee hearing on Thursday. ?We didn?t take it lightly.?



The lending facility is seen as similar to the Fed?s ?discount window? for commercial banks, where the Fed acts as a lender of last resort. Commercial banks and investment companies pay 2.5 percent in interest for overnight loans from the Fed.



Banks also stepped up their borrowing from the Fed?s discount window. Banks averaged $7 billion in daily borrowing for the week ending April 2. That compared with $550 million in average daily borrowing for the previous week.



The identities of commercial banks and investment houses borrowing from the Fed?s emergency lending facilities are not released.



The Fed?s decision to extend emergency lending to investment houses ? along with another controversial move ? backing a multibillion lifeline as part of JP Morgan?s deal to take over the troubled Bear Stearns ? were under scrutiny by the Senate Banking Committee on Thursday. Some Democrats and others worry that the moves could put billions of taxpayer dollars at potential risk.



Bernanke, however, defended the actions, saying they were necessary to avert a meltdown of the entire financial system, which would have dire consequences for the economy and for millions of Americans.



?Our ultimate concern is the health of the American economy and the average person,? he said.



Also Thursday, the Fed, in the second operation of its kind, auctioned another $25 billion of much-in-demand Treasury securities to investment firms. Bidders paid an interest rate of 0.160 percent. The Fed received bids of $46.9 billion worth of the securities. Bidders, who are not identified, can put up risky home loan packages as collateral.



That program is intended to help financial institutions and the troubled mortgage market. The Fed said it would make as much as $200 billion worth of Treasuries available through weekly auctions that started last Thursday.



The goal is to make investment houses more inclined to lend to each other. It also is aimed at providing relief to the distressed market for mortgage-linked securities. Questions about their value and dumping of these securities have driven up mortgage rates, aggravating the housing crisis.
 
Bad news on the economic front. UPS lowers earnings guidance.



<a href="http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080408006573&newsLang=en">UPS</a>
 
<a href="http://online.wsj.com/article/SB120769075480499305.html?mod=googlenews_wsj">WSJ: Citi looking to dump loans</a>

<blockquote>Citigroup Inc., taking a big step to reduce its holdings of troubled corporate debt, is close to a deal to unload about $12 billion of leveraged loans and bonds to a group of private-equity firms, according to people familiar with the matter.



Citigroup originally issued the debt to help finance the leveraged-buyout boom. It hoped at the time to pass much of it on to investors. But when the credit crunch hit last summer, demand for the risky bonds and loans dried up, leaving Wall Street firms including Citigroup holding tens of billions of dollars in unwanted debt.



Under the planned deal, Citigroup will sell the loans and bonds to buyout firms including Apollo Management, TPG and Blackstone Group, said the people briefed on the deal. The firms are expected to pay an average price of slightly less than 90 cents on the dollar.



</blockquote>


Ninety cents? I'm surprised they expect that much.
 
Credit to <a href="http://articles.moneycentral.msn.com/Commentary/ByAuthor/BillFleckenstein.aspx">Fleckenstein</a>, but some good anecdotes from this <a href="http://www.nytimes.com/2008/03/30/magazine/30wwln-lede-t.html?_r=1&ref=magazine&oref=slogin">NYT magazine article </a>regarding our Friend the Fed:



<em>"Notably, it announced it would accept mortgage securities as collateral for loans ? enlarging its role as lender of last resort. (Wall Street jesters had it that the Fed would also be accepting cereal box-tops.)"</em>



<em>"However pure of motive, Bernanke & Co. are underwriting overleveraged markets whose linkages, even today, are dimly understood. <u>The formula of laissez faire in advance and intervention in the aftermath has it exactly wrong</u>."</em>



Look out, or those internet types could really start banging the drum against a bailout... ;-P



SCHB
 
<span style="color: red;"><span style="font-size: 13px;">US mortgage crisis may cost $945 billion worldwide: IMF </span></span>



"The International Monetary Fund said Tuesday the worldwide losses stemming from the US subprime mortgage crisis could hit 945 billion dollars as the impact spreads in the global economy. The IMF, in a particularly stark report, said that falling US housing prices and rising delinquencies on the residential mortgage market could lead to losses of 565 billion dollars..." <a href="http://news.yahoo.com/s/afp/20080408/bs_afp/imfeconomyfinanceproperty">Linky</a>
 
[quote author="lendingmaestro" date=1207725321]Bad news on the economic front. UPS lowers earnings guidance.



<a href="http://www.businesswire.com/portal/site/google/?ndmViewId=news_view&newsId=20080408006573&newsLang=en">UPS</a></blockquote>


That should be good for another 30 points up in the Dow at opening.
 
Hmm-m-m-m, I do not understand why the market does not see that the miss by GE is good news, because it has to be the bottom.
 
GE is, however, a real company, and it is still making money. It

is making 44 cents a share rather than 48 cents a share.



Vested interest disclosed: this is one of the stocks I did NOT sel

last fall. Oh, well.



By the way, any hope of seeing all the threads at once?
 
<span style="font-size: 14px;">Hope Now's numbers add up to little</span>



<a href="http://money.cnn.com/2008/04/10/real_estate/Hope_Now_Feb_stats/index.htm?postversion=2008041016">Hope Now Stats</a>
 
<span style="font-size: 14px;">Pending home sales at all-time low</span>



"The slip in pending home sales implies we're not out of the woods yet," said Lawrence Yun, NAR chief economist, in a statement. <span style="color: orange;">Ya think ?!</span>



<a href="http://money.cnn.com/2008/04/08/real_estate/pending_home_sales/index.htm?postversion=2008040811">Slip Sliding Away</a>
 
Lawrence Yun, live and in the flesh...excited about the prospects in South Carolina.



<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>
 
I owe it all to you Nude. Thanks. (and yes, I am showing off a bit....heh heh....)



<object width="325" height="250"><embed src="http://www.youtube.com/v/youtube" type="application/x-shockwave-flash" width="325" height="250"></embed></object>
 
<strong><span style="color: green;">I'm not sure this is news to IHB, but a new poll is out:</span></strong>



"WASHINGTON - A growing majority say they won't buy a home anytime soon, the latest sign of increasing pessimism about the nation's housing crisis, a poll showed Monday.



In a vivid sketch of how the sputtering real estate market is causing distress throughout the country, the Associated Press-AOL Money & Finance poll found that more than a quarter of homeowners worry their home will lose value over the next two years. Fully one in seven mortgage holders fear they won't be able to make their monthly payments on time over the next six months...Sixty percent said they definitely won't buy a home in the next two years, up from 53 percent who said so in an AP-AOL poll in September 2006. At the same time, just 11 percent are certain or very likely to buy soon, down from 15 percent two years ago..."





<a href="http://news.yahoo.com/s/ap/20080414/ap_on_bi_ge/housing_crisis_ap_poll">MORE</a>
 
The affordable housing next door?



<a href="http://www.dailybulletin.com/ci_8915171">Cities pitch plan to buy foreclosed homes and turn them into affordable housing.</a>
 
[quote author="EvaLSeraphim" date=1208219557]The affordable housing next door?



<a href="http://www.dailybulletin.com/ci_8915171">Cities pitch plan to buy foreclosed homes and turn them into affordable housing.</a></blockquote>
That's a great plan. Especially if it means the homes get sold for cost. I say take it a step further and turn foreclosed condos into halfway houses for homeless and domestic abuse programs. <img src="http://home.comcast.net/~nudedj/NTS/thumbsup.png" alt="" />
 
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