Record-low mortgage rates aren't cheap enough for Federal Reserve Chairman Ben S. Bernanke as he tries to spur economic growth and create jobs.
Policymakers are disappointed that lower yields on mortgage-backed securities haven't led to more savings on home loans after the Fed expanded its balance sheet to an all-time high of almost $3 trillion through bond purchases. Bernanke this month called the trend "unfortunate," and the Federal Reserve Bank of New York held a workshop to examine the issue.
Read more: Federal Reserve frustrated in effort to lower mortgage rates - The Denver Post http://www.denverpost.com/business/ci_22258838/federal-reserve-frustrated-effort-lower-mortgage-rates#ixzz2GC0tvjwF
Comments 1-5 of 5 Last »
And, add that to this new proposal:
Refi Program Expansion Eyed
The Obama administration is considering expanding its mortgage-refinancing programs to include borrowers whose mortgages aren't backed by the government and who owe more than their homes are worth, according to people familiar with the discussions.
Such a move would benefit borrowers and provide a boost to the economy by unleashing cash that homeowners could spend elsewhere. But one proposal being considered would also transfer potentially riskier loans held by private investors into the taxpayer-supported mortgage giants Fannie Mae and Freddie Mac.
Because such a move would transfer billions of dollars of these mortgages to the government-backed mortgage companies, it would require congressional authorization to temporarily change Fannie's and Freddie's charters. Under the proposal, Fannie and Freddie would be allowed to charge higher rates to borrowers in order to compensate for the risk of guaranteeing refinanced loans that are underwater and more likely to result in default.
But industry officials say such a program would work only if banks were given immunity from having to buy back any loans they refinance that subsequently default, and that such a shield would boost the risk for the taxpayer-backed companies.
Fannie and Freddie "have already proved that they really weren't good at pricing higher-risk assets" during the housing bubble, said David Stevens, chief executive of the Mortgage Bankers Association. "What gives us the belief they can price it better today?" Allowing the firms to "reload up their balance sheets...will ultimately be a taxpayer expense," he said.
Yup! He's an idiot.
It will make no difference to starts.
There is no short, medium, long term confidence in property ownership.
Perhaps it has something to do with robo-signing or chain of ownership issues!
Bennie will end up buying every fraudulent security issued since the repeal of Glass-Steagall so he and his friends don't end up as being pariahs swinging from lamp posts. Then after quieting the titles on all the properties he'll resell them to the fresh crop of workers. Problem solved.
I bet he retires in France, where people this stupid are a national treasure.
What a load of intellectual dishonesty, to suggest that the feds actions are lowering interest rates, when they appear to be doing tho opposite, creating a floor for rates
Watch comments by email