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Posts Tagged ‘mortgage meltdown’

Only Half a Bailout

A week into the big bailout, banks are beginning to charge each other less for loans and companies are finding it easier to borrow short term. The Dow has been up and down, but so far this week, it is back above 9,000.

So has the worst passed? Probably not.

The unfortunate reality is that as long as millions of Americans continue to default on their mortgages and housing prices continue to slide, banks will continue to suffer big losses. Unless something is done quickly to help American homeowners avoid foreclosure and stay in their homes, those losses could swamp the bailout effort by exceeding the sums being spent to rescue the banks.

Despite the danger posed by foreclosures — to the bailout, homeowners, taxpayers and the economy — the Bush administration and Congress are still depending on banks and other participants in the mortgage industry to voluntarily modify troubled loans, say, by giving borrowers more time to pay or by reducing interest rates.

Mandatory modifications, bankruptcy, lawsuits — no one likes them, but they are tough tools for a tough problem. The bailout has dealt with only half of the problem: the credit freeze. Unless the government deals as aggressively with foreclosures, the system will likely face the abyss again.

90 Year Old Ohio Woman Attempts Suicide as Sheriffs Attempt to Evict Her

CINCINNATI (Reuters) – A 90-year-old Ohio woman, facing eviction from the home she has lived in for 38 years, shot and wounded herself this week, becoming a grim symbol of the U.S. home mortgage crisis.

Addie Polk was found lying on the floor of her home with what appeared to be a self-inflicted gunshot wound to her shoulder when police came to the home on Wednesday to serve an eviction notice, Akron police spokesman Lt. Rick Edwards said on Friday.

Home foreclosure rates are at record highs in the United States, in many cases because buyers with adjustable interest rates could not keep up with sharp increases in monthly payments. The foreclosure crisis has sparked a wider housing market downturn and is at the heart of the U.S. financial crisis.

Worst Housing Crisis Since the Great Depression

Sept. 5 (Bloomberg) — Silver State Bank of Henderson, Nevada was closed by U.S. regulators today, the 11th bank to collapse this year amid a surge in soured real-estate loans stemming from the worst housing slump since the Depression.

Silver State, with $2 billion in assets and $1.7 billion in deposits, was shut by the Nevada Financial Institutions Division and the Federal Deposit Insurance Corp., the FDIC said today in a statement.

Mortgage Giants Fannie Mae and Freddie Mac to be Placed Under Federal Control

The government has formulated a plan to put troubled mortgage giants Fannie Mae and Freddie Mac under federal control, dismiss their top executives, and use government funds to prop them up, government officials told the two companies yesterday, according to sources familiar with the conversations.

This is an ominous sign of the fragile state of the U.S. Mortgage Industry and housing markets. Many Americans are simply walking away from their homes after being unable to sell or refinance due to the current credit crunch and falling home values.

Many homeowners with adjustable rate mortgages are simply choosing to walk away and start over. It doesn’t seem to make much sense to try and save a depreciating asset while monthly payments and interest rates rise to unreasonable levels.

Housing Prices Are Falling With No End in Sight

Does it Make Financial Sense to Try and Save Your Home?

These days many homeowners are justifiably very nervous about their homes.

Mortgage pillars Fannie Mae and Freddie Mac are on the verge of financial meltdown and Federal Bailout.

Transportation, energy, food costs, and unemployment are rising.

More people out of work is going to put even more pressure on people being able to pay their mortgages. That will lead to lead to more foreclosures, and More People Walking Away From Their Homes!

Many experts believe housing prices are not even close to reaching their bottom, including Alan Greenspan Former Federal Reserve Chairman.

While it is a gut wrenching decision, sometimes the best thing to do is walk away and start over.

Mortgage Giants Stocks Plunge on News of Federal Bailout

NEW YORK (CNNMoney.com) — Shares of mortgage finance giants Fannie Mae and Freddie Mac, suffering their worst day since a mid-July free fall, plunged Monday to their lowest points in nearly two decades.

U.S. Treasury and Federal Reserve Announce Mortgage Banking Bailout Plans

WASHINGTON (Reuters) – The U.S. Treasury and Federal Reserve on Sunday unveiled sweeping steps to support Fannie Mae and Freddie Mac if needed to bolster confidence in the troubled mortgage financing giants and head off a potential meltdown in global financial markets.

The move by the Fed echoed its emergency action to help rescue investment bank Bear Stearns in March, when it opened the discount window to investment banks for the first time since the Great Depression.