Saturday, November 29, 2008

Economics USA: New Fed move extends help to homeowners, both those already mortgage-foreclosed and those still-struggling to make payments


Bailout Shocker:

Fed Government's Move Works!

H o m e o w n e r s . . . H e l p e d !

Nov26,2k8 10:34am EST by Henry Blodget

refWrite: Joe Weisenthanl, editor of ClusterStock, wrote a spoof, the background story of which is Ayn Rand's Objectivism. The title of Joe W.'s piece "Atlas Hedged" (Nov26,2k8) plays with the title of Rand's sect-revered work, the last and thickest of her ideological novels, famously entitled Atlas Shrugged. Joe is alluding to the role of Hedge-Fund funk in The Crisis that continues to rage on, in real life, differently from than phantasmagoria in the imaginal world of libertarian or objectivist fictioneering.

Braced by Weisenthal's sanguine satire, Blodget has his own go at it, but in a more analytic way:
The latest Trash Asset Removal Plan, the $800 billion one the government announced yesterday, is actually making a difference, at least so far.

One of the goals of the plan is to reduce mortgage rates through government buying of mortgage-backed securities, and Fannie and Freddie debt. And it worked immediately. Yesterday saw the biggest mortgage refinancing activity in a year.

If this trend continues, it will allow some homeowners to get out from under onerous adjustable rate mortgages and into cheaper fixed-rate ones--possibly even ones they can afford (at least until they get laid off). This, in turn, will free up some debt-service payments to be used on other things.

Economy USA:
Homeowners and Mortgages

I shoud add that the orthographic semiotics of the bold typefaces, underlines, and bold italics in the foregoing are my own interpretive retexting of the delitefully provocative Wiesenthal. Brief, sweet & sour enuff.

But Blodget pursues the chase (no pun avoidable!) passing Wiesenthal on the road. Then Blodget's done, it seems ... but then again, at length he quotes Wall Street Journal, (is the quoted text another piece of his own?, I wonder...or not). But certainly quoted at length, about the immediate impact of the Fed Government's apparently savvy political-economic action luring banks to adjust mortgage rates downward. WSJ:

Some brokers said it was the most activity they've seen in at least one year, although there was no way to determine to volume of refinancing...

Rates on 30-year fixed-rate mortgages dropped by roughly half a percentage point to about 5.5%, for borrowers with good credit scores and substantial equity in their homes, say mortgage brokers and lenders.

While the initial flurry of calls came from people seeking to refinance, economists predicted lower rates also will spur some home buying among bargain-seekers. The surge in refinancing will help the overall economy by putting more cash in consumers' pockets and reducing the pressure on some borrowers struggling to make payments...

The government's latest plans won't fix all the problems bedeviling the housing and credit markets. And it's not clear whether the most recent initiative will keep mortgage interest rates down over the long run.
Yet, at this particular time, a ray of sunshine, a note of hope for the future of the least-of-all-to-be-pitied, the American economic system.


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