Mortgage Rates Hit 3-Month High

So why haven't homeowners been bailed out?

(NEWSER) - If you were trying to get a loan in southern Florida in 2007, bankers like James Theckston were there to help. "If you had some old bag lady walking down the street and she had a decent credit score, she got a loan," Chase's then-regional VP of Home Finance tells Nicholas Kristof. And Theckston says there's no doubt that though borrowers bear some responsibility for what Kristof describes as their "harebrained decisions," the bankers "were far more culpable," writes the New York Times columnist. More»

Obama administration wants to get out of the mortgage market

(NEWSER) - The Obama administration will propose dissolving Fannie Mae and Freddie Mac and reducing the federal government’s role in the mortgage market, sources tell the Wall Street Journal . The White House is set to release three plans for moving forward without the government-owned mortgage giants, which originated nine out of every 10 loans last year. Advancing all three plans might prevent an all-out partisan brawl between conservatives, who blame Fannie and Freddie for the financial crisis, and liberals, who say borrowing costs will skyrocket without government help, according to one former Obama treasury official. More»

Felix Salmon isn't thrilled with Fed chief's op-ed

(NEWSER) - The Fed's controversial plan to buy $600 billion worth of Treasuries to stimulate growth has brought the phrase "quantitative easing" out from the obscurity of financial blogs. Will it work? Two columns today on the subject from Ben Bernanke himself in the Washington Post and Felix Salmon at Reuters :

• Bernanke: The Fed chief offers three examples of how the move will help: It will lower mortgage rates and thus help prospective homebuyers or those who want to refinance; it will encourage business investment by lowering corporate bond rates; and it will raise stock prices, which will in turn boost consumer wealth, confidence, and spending "in a virtuous circle."

Mass abandonment of mortgages could trigger new economic plunge

(NEWSER) - A quarter of American homeowners now owe more on their mortgages than their homes are worth and millions of them are thinking about just walking away. "Strategic defaults" on so-called underwater mortgages are on the rise, although abandoning mortgages is controversial and, to some, immoral. "We made a bad investment," one California homeowner tells NPR , but "I'm from a finance background. It makes no economic sense for us to hold on to this asset." More»

Banks ignored warning signs, hired 'Burger King kids'

(NEWSER) - As the foreclosure crisis continues, the stories of clueless employees just get worse. Swamped with delinquent customers, banks hired inexperienced walk-ins one former executive called “Burger King kids,” who, for years, processed mortgages at an astonishing rate. Overwhelmed employees not only signed papers without reading them—they sometimes tossed paperwork into the trash. Some banks even outsourced foreclosure operations. That’s why, employees, executives, and regulators tell the New York Times , this crisis—shocking as it may be to the general public—was no surprise to insiders. More»