US in Recession, Will Worsen; Dollar Sinks

February 25 2008 CNBC.com The United States economy is already in recession and is set for a further slowdown with the dollar expected to remain under pressure, investment guru Jim Rogers said on Monday. The housing and automobile sectors are in a situation worse than recession with soaring energy and food prices hitting consumer spending. Rogers said the central bank was making the same mistakes Japan did in the early 1990s before its credit-inflated bubble economy burst. As long as the U.S. central bank and the federal government keep making the mistakes, you will have a longer period of slowdown and it will be perhaps one of the worst recessions we have had in a long time in America. As the dollar goes down a great deal, countries such as Iran and Venezuela are already using alternative currencies to the dollar. Last week the U.S. central bank sharply lowered its forecast for U.S. economic growth in 2008 and said it was worried the economy could face further setbacks even after a series of aggressive interest rate cuts.

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Lenders oppose lawmakers plan to reduce mortgage balances for home owners

February 22 2008 Money.CNN.com Lenders are trying to derail legislation that would allow bankruptcy judges to reduce mortgage balances for home owners. Two bills before Congress would give bankruptcy court judges the authority to reduce mortgage debt, which could save thousands of borrowers from foreclosure. Lenders are furious at the prospect of having judges seize control of their mortgage portfolios. Community and consumer advocates argue that such a move makes sense amid the current mortgage crisis. Both the Emergency Home Ownership and Mortgage Equity Protection Act of 2007 and the Foreclosure Prevention Act of 2008 aim to provide relief for some home owners in bankruptcy. Only borrowers who live in their homes and hold subprime or non-traditional mortgages, like interest-only loans, would be eligible.

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Mortgage interest rates increase sharply

As most interest rates moved higher, mortgage application volume tumbled 22.6% during the week ending Feb. 15, according to the Mortgage Bankers Association's weekly application survey. Refinance volume dropped 27.9% during the week, while purchase volume fell 11.55%. Refinance applications accounted for 61.7% of total applications. The average interest rate for traditional, 30-year fixed-rate mortgages increased to 6.09% from 5.72%. The average interest rate for 15-year fixed-rate mortgages, a popular option for refinancing a home, increased to 5.55% from 5.18%.

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Countrywide says foreclosures and delinquencies continue rising

February 17 2008 Money.CNN.com Struggling lender Countrywide Financial Corp. reported Friday that both foreclosures and delinquencies rose in January. The combination of a slowing economy and nagging unemployment in some regions of the country have made it more difficult for borrowers to meet payments, especially those holding adjustable rate mortgages. That has led to a greater number of people either forestalling payments or walking away from their loans altogether. The up-tick of delinquencies and foreclosures was a visible sign of larger problems borrowers are facing nationwide. Industry research firm RealtyTrac said Jan. 30 that foreclosure filings were up 75% in 2007.

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Major mortgage lenders halt foreclosures

February 13 2008 Money.CNN.com Six of the nation's largest mortgage lenders, in a joint effort to cool the raging foreclosure crisis, have agreed to temporarily stop foreclosure proceedings on homeowners who have fallen seriously behind in their mortgage payments. Under a program unveiled Tuesday, legal efforts to oust seriously delinquent borrowers from their homes will be postponed for 30 days while lenders and borrowers try to work out payment options. The banks so far participating in the program are Citigroup, Countrywide, Bank of America, JP Morgan Chase, Washington Mutual and Wells Fargo.

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Countrywide expands scope of mortgage help

February 11 2008 Money.CNN.com Plan would offer loan modifications for both fixed and adjustable loans and to borrowers who've already fallen behind. Countrywide Financial says it will expand programs to help borrowers manage their mortgage payments regardless of the type of subprime loan they have or whether they have already fallen behind on payments. Countrywide, the nation's largest mortgage lender and home loan servicer, has sought to address the growing number of defaults on its books by modifying loan terms, working out long-term repayment plans and other actions. The company said last month it helped more than 81,000 borrowers keep their mortgage payments manageable in 2007.

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Government-Sponsored Enterprises' debt may pose risk to economy

February 07 2008 Money.CNN.com The housing slump has compelled Freddie Mac and Fannie Mae to buy up mortgages on the secondary market that banks are backing away from. But that could end badly, charges one regulator. The increased share of housing debt taken on by Freddie Mac and Fannie Mae during the housing slump has put the two government sponsored enterprises at risk. The two Government-Sponsored Enterprises are "reducing risks in the market, but concentrating mortgages risks on themselves. These risks are beginning to take their toll," said James Lockhart, director of the Office of Federal Housing Enterprise Oversight (OFHEO), which regulates Fannie and Freddie. He was speaking Thursday at a Senate Banking committee on regulatory reform.

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Mortgage rates fall again

February 07 2008 BusinessWeek.com Rates on 30-year mortgages dipped slightly this week, the fifth decline in the past six weeks. Freddie Mac, the mortgage company, reported Thursday that 30-year, fixed-rate mortgages averaged 5.67 percent this week, down from 5.68 percent last week. The 30-year mortgage , which ended last year at 6.17 percent, has been below 6 percent for five weeks, a stretch that has not been seen since 2005. Analysts attributed the declines in mortgage rates to growing fears that the country could be slipping into a recession.

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Senator Chris Dodd Puts New $20B subprime mortgage bailout on the table

February 1 2008 Money.CNN.com Senator Chris Dodd proposes setting up a fund that would buy defaulting subprime mortgages and restructure loans for borrowers. The proposal to bail out subprime mortgage borrowers who are at risk of foreclosure was floated at a Senate Banking Committee hearing Thursday. Senator Chris Dodd, the committee chair, said he is working to create a Home Ownership Preservation Corporation, which would purchase mortgage securities that are backed by at-risk, subprime loans from lenders and investors. This corporation would give these lenders and investors a better price for the securities than they would get if the properties backing them were put through foreclosure

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