cluba
10-31-2007, 03:21 PM
The Federal Reserve, faced with surging oil prices and a slumping housing market, today cut a key interest rate by a quarter-point
View Full Version : Just In...(Fed Cut)
cluba
10-31-2007, 03:30 PM
More info on the cut
Fed cuts rates to 4.5%
Citing turmoil in the housing market, Fed chair Ben Bernanke and Co. lower a key short-term rate by a quarter of a percentage point to keep the economy on track.
October 31 2007: 2:18 PM EDT
NEW YORK (CNNMoney.com) -- The Federal Reserve lowered the target for a critical short-term interest rate by a quarter of a point Wednesday, citing continued concerns about the housing market crunch.
The widely-expected move comes on the heels of a half-point rate cut by the central bank in September and leaves the federal funds rate at 4.5 percent, its lowest level since April 2001.
The federal funds rate, an overnight lending rate for banks, is important to the economy since it influences how much interest consumers pay on credit card debt, home equity lines of credit and auto loans. It also impacts how much it costs corporations to borrow money.
Weakness in the housing market and problems with subprime mortgages, loans made to those with less-than-perfect credit, have led to billions of dollars in writedowns at major financial institutions. For this reason, most investors believed the Fed would lower rates again in order to ensure that there is little spillover from the mortgage meltdown into the broader economy.
But some market observers have expressed concerns that with oil prices rising above $90, inflation may still be a threat. So the Fed could be making a mistake by lowering interest rates further, some maintain. Top of page
Fed cuts rates to 4.5%
Citing turmoil in the housing market, Fed chair Ben Bernanke and Co. lower a key short-term rate by a quarter of a percentage point to keep the economy on track.
October 31 2007: 2:18 PM EDT
NEW YORK (CNNMoney.com) -- The Federal Reserve lowered the target for a critical short-term interest rate by a quarter of a point Wednesday, citing continued concerns about the housing market crunch.
The widely-expected move comes on the heels of a half-point rate cut by the central bank in September and leaves the federal funds rate at 4.5 percent, its lowest level since April 2001.
The federal funds rate, an overnight lending rate for banks, is important to the economy since it influences how much interest consumers pay on credit card debt, home equity lines of credit and auto loans. It also impacts how much it costs corporations to borrow money.
Weakness in the housing market and problems with subprime mortgages, loans made to those with less-than-perfect credit, have led to billions of dollars in writedowns at major financial institutions. For this reason, most investors believed the Fed would lower rates again in order to ensure that there is little spillover from the mortgage meltdown into the broader economy.
But some market observers have expressed concerns that with oil prices rising above $90, inflation may still be a threat. So the Fed could be making a mistake by lowering interest rates further, some maintain. Top of page
cluba
10-31-2007, 03:32 PM
The part I don't like to think about is this..
"leaves the federal funds rate at 4.5 percent, its lowest level since April 2001"
"leaves the federal funds rate at 4.5 percent, its lowest level since April 2001"
poppa pri
10-31-2007, 03:36 PM
i called it .25%
this does certainly make for an interesting next 6 months...
this does certainly make for an interesting next 6 months...
John Kennedy
10-31-2007, 03:37 PM
booooooooooooooooooooo
cluba
10-31-2007, 03:41 PM
It's funny, it's one of those things that the majority of the people you talk to, articles you read, analysts you listen to etc were hoping they wouldn't cut it either but it seemed like everyone was predicting it would happen. I for one, did not want it to happen but felt strongly it would.
goat
10-31-2007, 04:30 PM
why though
my honost opinion is fuck people that buy things they cant afford there just bringing the rest of us down
my honost opinion is fuck people that buy things they cant afford there just bringing the rest of us down
=Lee=
10-31-2007, 05:08 PM
Short term solution. Its gonna hurt down the road.
goat
10-31-2007, 05:23 PM
Short term solution. Its gonna hurt down the road.
exactily
theres way to much money out there we def need to be in a contractionary period
exactily
theres way to much money out there we def need to be in a contractionary period
=Lee=
10-31-2007, 05:54 PM
exactily
theres way to much money out there we def need to be in a contractionary period
:agree Yeah well typical American way.....live for the moment.
theres way to much money out there we def need to be in a contractionary period
:agree Yeah well typical American way.....live for the moment.
James Maxx
10-31-2007, 06:13 PM
Ill be refinancing in a few months so this is good news for me.
johnpaul
10-31-2007, 06:24 PM
i called it .25%
this does certainly make for an interesting next 6 months...
You sure as hell can say that again..
May/ June gonna be intresting..
They dont fix this housing market we are headed for
D E P R E S S I O N
this does certainly make for an interesting next 6 months...
You sure as hell can say that again..
May/ June gonna be intresting..
They dont fix this housing market we are headed for
D E P R E S S I O N
TheHipHopBillGates
10-31-2007, 06:32 PM
There has been talk about quarter point cut's right threw till February. Personally I'm against it because of the housing inflation which is and needs to happen, when you have a generation that can't afford good housing, one of 2 things needs to happen, either housing has to come back down to earth or wages need to go up, and we all know that wages are never going to go up, especially now that we're just a part of a global economy. 2nd there definitely shouldn't have been a cut with a GDP of 3.9% which is considered a healthy economy, further devaluation of the dollar is just going to increase the cost of oil and which is going to tax the average american and the economy equally. It's sad that the Fed caved to the pressure from the government & big banks instead of taking a more long term prospective on the situation.
TheHipHopBillGates
10-31-2007, 06:33 PM
You sure as hell can say that again..
May/ June gonna be intresting..
They dont fix this housing market we are headed for
D E P R E S S I O N
You maybe right, however I'm not sure rate cut's is a solution, I'd think maybe working with big bank and lender's to re-write certain mortgage's handed out and bail out the people in these situations and not neccessarily the banks, that until this corner were making record profits.
May/ June gonna be intresting..
They dont fix this housing market we are headed for
D E P R E S S I O N
You maybe right, however I'm not sure rate cut's is a solution, I'd think maybe working with big bank and lender's to re-write certain mortgage's handed out and bail out the people in these situations and not neccessarily the banks, that until this corner were making record profits.
DARKBEATS
10-31-2007, 11:15 PM
Jan 1st They Should have some new fannie mae guidelines that will hopefully ease things a bit.higher loan amounts higher dti etc.. The market asked for a ratecut and got it.. bernanke isnt in control of this sitiuation.. he has to be saying what a job i got.....scary part is they gonna keep printing money until its worth shit.. then the chinese pull out of there u.s. investments which they were basically getting 2 for 1 and were really screwed...
in other news long live the shortsales!
in other news long live the shortsales!
RICKY
10-31-2007, 11:24 PM
Jan 1st They Should have some new fannie mae guidelines that will hopefully ease things a bit.higher loan amounts higher dti etc.. The market asked for a ratecut and got it.. bernanke isnt in control of this sitiuation.. he has to be saying what a job i got.....scary part is they gonna keep printing money until its worth shit.. then the chinese pull out of there u.s. investments which they were basically getting 2 for 1 and were really screwed...
in other news long live the shortsales!
FHA guidelines are def changing. Higher loan amounts are a def. I just learned if you are in an adjustable and its fixed period is over, and starts adjusting and you have late mtg payments you can still get into an fha loan.
in other news long live the shortsales!
FHA guidelines are def changing. Higher loan amounts are a def. I just learned if you are in an adjustable and its fixed period is over, and starts adjusting and you have late mtg payments you can still get into an fha loan.
DARKBEATS
10-31-2007, 11:27 PM
very true
DARKBEATS
10-31-2007, 11:29 PM
fha is the way.. but i read soemthing online that said they going to try and cap the broker fee on the loans.. trying to ban the 7point deals which sucks.. im gonna do as many as i can while i can
RICKY
10-31-2007, 11:34 PM
fha is the way.. but i read soemthing online that said they going to try and cap the broker fee on the loans.. trying to ban the 7point deals which sucks.. im gonna do as many as i can while i can
I wonder how they are gonna do that. The only way you can get away with 7 points is if the loan goes through a bank. YSP doesnt count towards part 41 when banking. So you can get away with the 3 up front points. If you work for a broker then ysp and upfront points count towards part 41. If you have a minute could you find the link post it up so i can read.
I wonder how they are gonna do that. The only way you can get away with 7 points is if the loan goes through a bank. YSP doesnt count towards part 41 when banking. So you can get away with the 3 up front points. If you work for a broker then ysp and upfront points count towards part 41. If you have a minute could you find the link post it up so i can read.
DARKBEATS
10-31-2007, 11:36 PM
i work for a bank so were able to charge full boat on fha loans..
let me find this for you.
let me find this for you.
Gspot555
10-31-2007, 11:37 PM
There has been talk about quarter point cut's right threw till February. Personally I'm against it because of the housing inflation which is and needs to happen, when you have a generation that can't afford good housing, one of 2 things needs to happen, either housing has to come back down to earth or wages need to go up, and we all know that wages are never going to go up, especially now that we're just a part of a global economy. 2nd there definitely shouldn't have been a cut with a GDP of 3.9% which is considered a healthy economy, further devaluation of the dollar is just going to increase the cost of oil and which is going to tax the average american and the economy equally. It's sad that the Fed caved to the pressure from the government & big banks instead of taking a more long term prospective on the situation.
Housinig Market will come down sooner or later.... Returns go up Prices have to come down
Housinig Market will come down sooner or later.... Returns go up Prices have to come down
DARKBEATS
10-31-2007, 11:43 PM
yo ricky it may have been on aol .. but this could be the same case..
Federal Court Rejects Challenge To Loan Broker Fees
by Kenneth R. Harney
In a major victory for mortgage lenders and brokers, a federal district court has thrown out a class action suit challenging brokers' fees in connection with Federal Housing Administration (FHA) home loans. The decision was the first to specifically cite the Housing and Urban Development's (HUD's) policy statement of October 15 permitting mortgage brokers to charge borrowers so-called "yield-spread premiums" under certain circumstances. The district court also rejected claims that borrowers cannot be charged more than 1 percent for originating popular, low-downpayment FHA mortgages.
The decision, Bjustrom v. Trust One Mortgage (No C00-1166P), handed down in Seattle October 26 in the U.S. District Court for the Western District of Washington, confirmed trial lawyers' worst fears about the impact HUD's October 15 policy statement on broker fees might have on the more than 150 class action suits pending around the country.
District court Judge Marsha J. Pechman's decision granted "deference" to HUD's latest policy pronouncement on broker fees, despite her lack of complete agreement with that policy. HUD has principal federal regulatory authority over the Real Estate Settlement Procedures Act (RESPA), a consumer protection law governing most home mortgage settlements.
In its October 15 policy statement, HUD said that yield-spread premiums -- paid to brokers by lenders when they deliver loans above a "par" rate -- are not illegal in and of themselves.
Instead, they are legal under RESPA when disclosed to the borrower, represent payment for goods or services rendered in connection with the loan, and are "reasonable" in the context of the total loan transaction.HUD's policy statement angered some consumer groups and class action lawyers because it essentially requires courts to examine complaints over loan broker fees on an individual, case by case,, "facts and circumstances" basis.
To attain class action certification by a federal court, by contrast, plaintiffs must demonstrate that the alleged violation of law by the defendant affects large groups of victims in identical ways. A facts and circumstances approach makes certification of a class virtually impossible.
Judge Pechman noted that "by effectively closing off class action litigation (over broker fees), HUD forces potentially thousands of consumers to individually litigate their claims regarding a few thousand dollars, an unlikely proposition."
But at the bottom line, said Pechman, HUD interprets the laws for which it retains regulatory authority, and that under HUD's policy statement October 15, "yield-spread and service-release premiums may be paid by lenders." Moreover, she added, the plaintiffs were not convincing in arguing that HUD itself prohibits payment of mortgage brokerage fees above 1 percent in connection with FHA loans.
The decision involved a $140,542 FHA loan at 8 percent made in 1999. The borrower, Mary E. Bjustrom, paid a $1,374 origination fee to a broker. The broker also collected a yield-spread premium of $702.71 and a service release premium of $1,786.78 from Trust One Mortgage Corp. of Irvine, Calif. All the fees were disclosed on Bjustrom's settlement documents.
The plainfiff challenged all brokerage fees beyond the 1 percent limit that she claimed HUD requires on all FHA loans.The court summarily rejected that argument, however, ruling that the agency's own regulations clearly permit other fees to be paid to brokers, beyond the 1 percent FHA origination fee. In fact, the judge noted, the agency routinely insures large numbers of FHA home loans with total fees --paid by the borrower and the lender to brokers --well in excess of 1 percent. That practice, said the decision, clearly connotes consent.
t they were taking it to trial.. this might be it..
Federal Court Rejects Challenge To Loan Broker Fees
by Kenneth R. Harney
In a major victory for mortgage lenders and brokers, a federal district court has thrown out a class action suit challenging brokers' fees in connection with Federal Housing Administration (FHA) home loans. The decision was the first to specifically cite the Housing and Urban Development's (HUD's) policy statement of October 15 permitting mortgage brokers to charge borrowers so-called "yield-spread premiums" under certain circumstances. The district court also rejected claims that borrowers cannot be charged more than 1 percent for originating popular, low-downpayment FHA mortgages.
The decision, Bjustrom v. Trust One Mortgage (No C00-1166P), handed down in Seattle October 26 in the U.S. District Court for the Western District of Washington, confirmed trial lawyers' worst fears about the impact HUD's October 15 policy statement on broker fees might have on the more than 150 class action suits pending around the country.
District court Judge Marsha J. Pechman's decision granted "deference" to HUD's latest policy pronouncement on broker fees, despite her lack of complete agreement with that policy. HUD has principal federal regulatory authority over the Real Estate Settlement Procedures Act (RESPA), a consumer protection law governing most home mortgage settlements.
In its October 15 policy statement, HUD said that yield-spread premiums -- paid to brokers by lenders when they deliver loans above a "par" rate -- are not illegal in and of themselves.
Instead, they are legal under RESPA when disclosed to the borrower, represent payment for goods or services rendered in connection with the loan, and are "reasonable" in the context of the total loan transaction.HUD's policy statement angered some consumer groups and class action lawyers because it essentially requires courts to examine complaints over loan broker fees on an individual, case by case,, "facts and circumstances" basis.
To attain class action certification by a federal court, by contrast, plaintiffs must demonstrate that the alleged violation of law by the defendant affects large groups of victims in identical ways. A facts and circumstances approach makes certification of a class virtually impossible.
Judge Pechman noted that "by effectively closing off class action litigation (over broker fees), HUD forces potentially thousands of consumers to individually litigate their claims regarding a few thousand dollars, an unlikely proposition."
But at the bottom line, said Pechman, HUD interprets the laws for which it retains regulatory authority, and that under HUD's policy statement October 15, "yield-spread and service-release premiums may be paid by lenders." Moreover, she added, the plaintiffs were not convincing in arguing that HUD itself prohibits payment of mortgage brokerage fees above 1 percent in connection with FHA loans.
The decision involved a $140,542 FHA loan at 8 percent made in 1999. The borrower, Mary E. Bjustrom, paid a $1,374 origination fee to a broker. The broker also collected a yield-spread premium of $702.71 and a service release premium of $1,786.78 from Trust One Mortgage Corp. of Irvine, Calif. All the fees were disclosed on Bjustrom's settlement documents.
The plainfiff challenged all brokerage fees beyond the 1 percent limit that she claimed HUD requires on all FHA loans.The court summarily rejected that argument, however, ruling that the agency's own regulations clearly permit other fees to be paid to brokers, beyond the 1 percent FHA origination fee. In fact, the judge noted, the agency routinely insures large numbers of FHA home loans with total fees --paid by the borrower and the lender to brokers --well in excess of 1 percent. That practice, said the decision, clearly connotes consent.
t they were taking it to trial.. this might be it..
RICKY
10-31-2007, 11:46 PM
Housinig Market will come down sooner or later.... Returns go up Prices have to come down
They def are. My boy just bought a house for 925,000 and it was valued at 1.2 million. I see prices dropping all the time now.
They def are. My boy just bought a house for 925,000 and it was valued at 1.2 million. I see prices dropping all the time now.
DARKBEATS
10-31-2007, 11:50 PM
good time to sell your house IF you have a substantial amount of equity and have excess to foreclosed homes that you could buy.
I HAVE LISTS OF FORCLOSURES IN THE TRISTATE AREA ALL PROPERTIES HAVE MINIMUM 100-150K EQUITY IN THEM ANYONE WHO IS INTERESTED PM FOR THE LIST
I HAVE LISTS OF FORCLOSURES IN THE TRISTATE AREA ALL PROPERTIES HAVE MINIMUM 100-150K EQUITY IN THEM ANYONE WHO IS INTERESTED PM FOR THE LIST
TheHipHopBillGates
11-01-2007, 12:49 AM
good time to sell your house IF you have a substantial amount of equity and have excess to foreclosed homes that you could buy.
I HAVE LISTS OF FORCLOSURES IN THE TRISTATE AREA ALL PROPERTIES HAVE MINIMUM 100-150K EQUITY IN THEM ANYONE WHO IS INTERESTED PM FOR THE LIST
It's a tough market to sell though with such a surplus on the market..............as far as the Fed Cut, it seems there's been an update and maybe today's cut might be the last, hopefully, we'll see:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKrtVlepFjRQ
Oct. 31 (Bloomberg) -- The Federal Reserve cut its benchmark interest rate by a quarter point to 4.5 percent and signaled it's reluctant to lower borrowing costs further.
The second reduction in as many months should help the U.S. economy withstand the fallout from August's credit collapse, the Federal Open Market Committee said in a statement after meeting today in Washington. ``After this action, the upside risks to inflation roughly balance the downside risks to growth.''
The language ``has all the subtlety of a sledgehammer,'' said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut. ``The FOMC has just stated unequivocally that `we think we are done easing.' Whether they are or not remains to be seen, but the message is loud and clear.''
Hours earlier, the Commerce Department said economic growth accelerated to an annual pace of 3.9 percent in the third quarter, the fastest in more than a year. The Fed statement also warned that higher energy and commodity prices may spur faster inflation.
Stocks fell in the minutes after the Fed announcement, before resuming their rally. Treasury notes declined and the dollar weakened.
The Fed acknowledged that ``economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance.'' At the same time, ``the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction.''
Hoenig Dissents
Today's decision wasn't unanimous. Kansas City Fed President Thomas Hoenig preferred no change, the first dissent since December.
The Fed also lowered the discount rate, the cost of direct loans to banks, by 25 basis points to 5 percent, from 5.25 percent. A basis point is 0.01 percentage point.
``Unless the incoming data signal a net increase in downside growth risk, they think they are done,'' said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York. ``Inflation worries -- oil and commodities -- just won't go away.''
Policy makers have now lowered their target rate for overnight loans between banks by 0.75 percentage point in six weeks, the most aggressive easing since the economy was emerging from its last recession in 2001.
Odds of a quarter-point cut in the benchmark rate at the Dec. 11 meeting receded to 40 percent, from 66 percent yesterday, according to futures contracts quoted on the Chicago Board of Trade.
Economists and former officials said before the meeting that the central bank would want to preserve leeway to take back the rate cuts should the economy weather the risks from credit and housing markets. Vice Chairman Donald Kohn said Oct. 5 the Fed must be ``nimble in adjusting policy to promote'' both growth and price stability.
Insurance
Chairman Ben S. Bernanke, 53, and other officials in speeches this month have described the importance of taking out insurance to protect the economy from risks when the outlook is difficult to judge.
``Intuition suggests that stronger action by the central bank may be warranted to prevent particularly costly outcomes,'' Bernanke said in an Oct. 19 speech on recent economic research. Chicago Fed President Charles Evans said Oct. 22 that ``at times we may need to adopt a risk management approach to policy'' to guard against threats to growth or inflation.
Consumer-price increases have slowed, while a falling dollar and rising oil costs threaten a renewed acceleration. The Fed's preferred gauge, the personal consumption expenditures price index excluding food and energy, probably rose 1.8 percent in September from a year ago, according to the median forecast. The Commerce Department reports the figures tomorrow.
The index remained below 2 percent from June to August. Bernanke, before taking the Fed's helm, said his ``comfort'' range for the measure was 1 percent to 2 percent.
Faster Expansion
The Commerce Department said today that the expansion picked up in the third quarter, though economists surveyed by Bloomberg predict a slowing this quarter. A private report showed companies hired 106,000 this month after creating 61,000 jobs in September.
The economy grew at a 3.9 percent annual rate in July to September, up from 3.8 percent in the previous three months, Commerce figures showed. It will slow to a 1.8 percent pace in the current period, according to the median estimate in a survey published Oct. 10.
Housing Downturn
Housing figures this month showed the industry has yet to find a bottom. A private survey yesterday showed home values in 20 metropolitan areas slid the most in at least six years. Sales of previously owned homes fell to the lowest level since National Association of Realtors began keeping records in 1999, and government figures recorded a 14-year low for housing starts.
Continued stress in credit markets may lengthen the housing recession and temper business investment plans. The world's largest banks and securities firms announced more than $30 billion of third-quarter charges.
Citigroup Inc. the biggest U.S. bank, said Oct. 15 that earnings fell 57 percent as loan losses increased. Merrill Lynch & Co. last week wrote down the value of subprime mortgages, asset-backed debt and leveraged loans by $8.4 billion.
The benchmark rate is now at the lowest level since January 2006. Bernanke took office the following month, and continued a series of rate increases that lifted the federal funds rate to 5.25 percent by June last year.
I HAVE LISTS OF FORCLOSURES IN THE TRISTATE AREA ALL PROPERTIES HAVE MINIMUM 100-150K EQUITY IN THEM ANYONE WHO IS INTERESTED PM FOR THE LIST
It's a tough market to sell though with such a surplus on the market..............as far as the Fed Cut, it seems there's been an update and maybe today's cut might be the last, hopefully, we'll see:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKrtVlepFjRQ
Oct. 31 (Bloomberg) -- The Federal Reserve cut its benchmark interest rate by a quarter point to 4.5 percent and signaled it's reluctant to lower borrowing costs further.
The second reduction in as many months should help the U.S. economy withstand the fallout from August's credit collapse, the Federal Open Market Committee said in a statement after meeting today in Washington. ``After this action, the upside risks to inflation roughly balance the downside risks to growth.''
The language ``has all the subtlety of a sledgehammer,'' said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut. ``The FOMC has just stated unequivocally that `we think we are done easing.' Whether they are or not remains to be seen, but the message is loud and clear.''
Hours earlier, the Commerce Department said economic growth accelerated to an annual pace of 3.9 percent in the third quarter, the fastest in more than a year. The Fed statement also warned that higher energy and commodity prices may spur faster inflation.
Stocks fell in the minutes after the Fed announcement, before resuming their rally. Treasury notes declined and the dollar weakened.
The Fed acknowledged that ``economic growth was solid in the third quarter, and strains in financial markets have eased somewhat on balance.'' At the same time, ``the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction.''
Hoenig Dissents
Today's decision wasn't unanimous. Kansas City Fed President Thomas Hoenig preferred no change, the first dissent since December.
The Fed also lowered the discount rate, the cost of direct loans to banks, by 25 basis points to 5 percent, from 5.25 percent. A basis point is 0.01 percentage point.
``Unless the incoming data signal a net increase in downside growth risk, they think they are done,'' said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York. ``Inflation worries -- oil and commodities -- just won't go away.''
Policy makers have now lowered their target rate for overnight loans between banks by 0.75 percentage point in six weeks, the most aggressive easing since the economy was emerging from its last recession in 2001.
Odds of a quarter-point cut in the benchmark rate at the Dec. 11 meeting receded to 40 percent, from 66 percent yesterday, according to futures contracts quoted on the Chicago Board of Trade.
Economists and former officials said before the meeting that the central bank would want to preserve leeway to take back the rate cuts should the economy weather the risks from credit and housing markets. Vice Chairman Donald Kohn said Oct. 5 the Fed must be ``nimble in adjusting policy to promote'' both growth and price stability.
Insurance
Chairman Ben S. Bernanke, 53, and other officials in speeches this month have described the importance of taking out insurance to protect the economy from risks when the outlook is difficult to judge.
``Intuition suggests that stronger action by the central bank may be warranted to prevent particularly costly outcomes,'' Bernanke said in an Oct. 19 speech on recent economic research. Chicago Fed President Charles Evans said Oct. 22 that ``at times we may need to adopt a risk management approach to policy'' to guard against threats to growth or inflation.
Consumer-price increases have slowed, while a falling dollar and rising oil costs threaten a renewed acceleration. The Fed's preferred gauge, the personal consumption expenditures price index excluding food and energy, probably rose 1.8 percent in September from a year ago, according to the median forecast. The Commerce Department reports the figures tomorrow.
The index remained below 2 percent from June to August. Bernanke, before taking the Fed's helm, said his ``comfort'' range for the measure was 1 percent to 2 percent.
Faster Expansion
The Commerce Department said today that the expansion picked up in the third quarter, though economists surveyed by Bloomberg predict a slowing this quarter. A private report showed companies hired 106,000 this month after creating 61,000 jobs in September.
The economy grew at a 3.9 percent annual rate in July to September, up from 3.8 percent in the previous three months, Commerce figures showed. It will slow to a 1.8 percent pace in the current period, according to the median estimate in a survey published Oct. 10.
Housing Downturn
Housing figures this month showed the industry has yet to find a bottom. A private survey yesterday showed home values in 20 metropolitan areas slid the most in at least six years. Sales of previously owned homes fell to the lowest level since National Association of Realtors began keeping records in 1999, and government figures recorded a 14-year low for housing starts.
Continued stress in credit markets may lengthen the housing recession and temper business investment plans. The world's largest banks and securities firms announced more than $30 billion of third-quarter charges.
Citigroup Inc. the biggest U.S. bank, said Oct. 15 that earnings fell 57 percent as loan losses increased. Merrill Lynch & Co. last week wrote down the value of subprime mortgages, asset-backed debt and leveraged loans by $8.4 billion.
The benchmark rate is now at the lowest level since January 2006. Bernanke took office the following month, and continued a series of rate increases that lifted the federal funds rate to 5.25 percent by June last year.
DARKBEATS
11-01-2007, 10:37 AM
i read the article this afternoon.. they have to do something.. lower rates right now will generate more business for right now.. but who knows about the long term effects later? it should be interesting to say the least to see how this plays out.. some economists are saying that it might not get back to normal till late 08 early 09..
plus on the news the other night they made mention that bk-qnz and nassau county could see another 10-15% drop in value before any stablization..
but while people are foreclosing shortsales are where its at.
plus on the news the other night they made mention that bk-qnz and nassau county could see another 10-15% drop in value before any stablization..
but while people are foreclosing shortsales are where its at.
DARKBEATS
11-02-2007, 11:43 AM
ricky this is the article
McLean, Va. – October 22, 2007 – The National Association of Mortgage Brokers (NAMB) today praised many of the consumer protection provisions of the mortgage industry reform legislation introduced by Representatives Frank, Miller and Watt, but again warned of the potential unintended harm consumers will face if the Yield Spread Premium (YSP) paid to mortgage brokers is eliminated.
With regard to the elimination of the YSP, NAMB President George Hanzimanolis voiced serious concern about the legislators’ decision to eliminate the originator’s ability to receive direct and indirect compensation. “The indirect compensation mortgage brokers receive from lenders is a defendable fee that actually lowers closing costs to consumers. It is an imperative tool for first time homebuyers, and critical to enable so many people to own a home and manage their finances.” The NAMB President said he hoped to work closely with legislators and consumer groups so that all parties understand the important role YSP plays in securing a home loan.
TITLE 1 (Mortgage Origination)
The NAMB president went on to applaud language in the bill mandating strict national standards for all loan originators, regardless of where they work within the mortgage industry. The bill would require criminal background checks, testing to demonstrate basic knowledge of loan products and continuing education and professional ethics training for all who originate mortgage loans.
“These provisions represent a huge victory for consumers and for NAMB, which has fought for years to make it easier for consumers to compare loan products offered in the different mortgage sources, such as banks, lenders, and mortgage brokers,” Hanzimanolis said. “The mortgage industry has changed dramatically in recent years, but the laws and regulations designed to protect consumers have lagged behind. These reforms will help modernize the regulatory system and drive bad actors from our industry.”
NAMB commended language that would require loan originators to provide a simple, straight-forward disclosure of their role in the mortgage transaction, including all fees and other sources of compensation, and to do so at the onset of the process. “Such disclosures will eliminate confusion on the part of the borrower, and even strengthen the borrower’s bargaining position when shopping for a mortgage,” Hanzimanolis said. “It will also help expose activities of unscrupulous originators who try to shield themselves from detection by keeping consumers uninformed.”
NAMB also endorsed the bill’s establishment of a national registry if it is governed by a federal agency such as the Federal Trade Commission, it includes every individual mortgage originator (including loan officers working for federal- and state-chartered banks and lenders, credit unions and mortgage brokers), and every individual pays a registry fee to cover operational costs of the registry and to create funds for enforcement and consumer financial literacy education programs.
Hanzimanolis praised the bill’s sponsors for applying new mandates even-handedly across the board to all originators. “The all-originator approach this bill envisions will be good for consumers and good for the mortgage industry,” he said.
TITLE II (Minimum Standards for ALL Mortgages)
Although full review of the bill is currently underway, NAMB expressed concern about putting into legislation the strict underwriting standards included in Title II.
“We need to have confidence in the market’s ability to correct itself,” Hanzimanolis said. “Further restrictions through legislation will cripple the industry, and will adversely affect the very people we’re trying to help.
“One measure NAMB strongly supports is the elimination of special incentives paid by lenders to mortgage originators who sell particular loan products. The function of the mortgage originator is to provide the consumer with choices. Since some programs are more profitable for lenders, we see lenders offer originators incentives for steering a consumer to a particular program. As brokers, NAMB members see this as a disservice to the consumer, and therefore believes the practice should be prohibited.”
TITLE III (High-Cost Mortgages)
NAMB opposes a provision to reduce the “points and fees” trigger for “high-cost loans” under the Home Ownership and Equity Protection Act (HOEPA) from 8% to 5%, and include all costs and fees charged to the borrower. Hanzimanolis said NAMB is concerned many lenders will decide not to make loans that cross the proposed HOEPA threshold, which would make many consumers vulnerable as interest rates rise.
Hanzimanolis likened this provision to government sanctioned ‘red-lining.’ “These restrictions are going to cut off credit to people who are generally in lower economic areas who deserve and need credit,” he concluded.
McLean, Va. – October 22, 2007 – The National Association of Mortgage Brokers (NAMB) today praised many of the consumer protection provisions of the mortgage industry reform legislation introduced by Representatives Frank, Miller and Watt, but again warned of the potential unintended harm consumers will face if the Yield Spread Premium (YSP) paid to mortgage brokers is eliminated.
With regard to the elimination of the YSP, NAMB President George Hanzimanolis voiced serious concern about the legislators’ decision to eliminate the originator’s ability to receive direct and indirect compensation. “The indirect compensation mortgage brokers receive from lenders is a defendable fee that actually lowers closing costs to consumers. It is an imperative tool for first time homebuyers, and critical to enable so many people to own a home and manage their finances.” The NAMB President said he hoped to work closely with legislators and consumer groups so that all parties understand the important role YSP plays in securing a home loan.
TITLE 1 (Mortgage Origination)
The NAMB president went on to applaud language in the bill mandating strict national standards for all loan originators, regardless of where they work within the mortgage industry. The bill would require criminal background checks, testing to demonstrate basic knowledge of loan products and continuing education and professional ethics training for all who originate mortgage loans.
“These provisions represent a huge victory for consumers and for NAMB, which has fought for years to make it easier for consumers to compare loan products offered in the different mortgage sources, such as banks, lenders, and mortgage brokers,” Hanzimanolis said. “The mortgage industry has changed dramatically in recent years, but the laws and regulations designed to protect consumers have lagged behind. These reforms will help modernize the regulatory system and drive bad actors from our industry.”
NAMB commended language that would require loan originators to provide a simple, straight-forward disclosure of their role in the mortgage transaction, including all fees and other sources of compensation, and to do so at the onset of the process. “Such disclosures will eliminate confusion on the part of the borrower, and even strengthen the borrower’s bargaining position when shopping for a mortgage,” Hanzimanolis said. “It will also help expose activities of unscrupulous originators who try to shield themselves from detection by keeping consumers uninformed.”
NAMB also endorsed the bill’s establishment of a national registry if it is governed by a federal agency such as the Federal Trade Commission, it includes every individual mortgage originator (including loan officers working for federal- and state-chartered banks and lenders, credit unions and mortgage brokers), and every individual pays a registry fee to cover operational costs of the registry and to create funds for enforcement and consumer financial literacy education programs.
Hanzimanolis praised the bill’s sponsors for applying new mandates even-handedly across the board to all originators. “The all-originator approach this bill envisions will be good for consumers and good for the mortgage industry,” he said.
TITLE II (Minimum Standards for ALL Mortgages)
Although full review of the bill is currently underway, NAMB expressed concern about putting into legislation the strict underwriting standards included in Title II.
“We need to have confidence in the market’s ability to correct itself,” Hanzimanolis said. “Further restrictions through legislation will cripple the industry, and will adversely affect the very people we’re trying to help.
“One measure NAMB strongly supports is the elimination of special incentives paid by lenders to mortgage originators who sell particular loan products. The function of the mortgage originator is to provide the consumer with choices. Since some programs are more profitable for lenders, we see lenders offer originators incentives for steering a consumer to a particular program. As brokers, NAMB members see this as a disservice to the consumer, and therefore believes the practice should be prohibited.”
TITLE III (High-Cost Mortgages)
NAMB opposes a provision to reduce the “points and fees” trigger for “high-cost loans” under the Home Ownership and Equity Protection Act (HOEPA) from 8% to 5%, and include all costs and fees charged to the borrower. Hanzimanolis said NAMB is concerned many lenders will decide not to make loans that cross the proposed HOEPA threshold, which would make many consumers vulnerable as interest rates rise.
Hanzimanolis likened this provision to government sanctioned ‘red-lining.’ “These restrictions are going to cut off credit to people who are generally in lower economic areas who deserve and need credit,” he concluded.
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