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elliemae
2009 Jun 7, 6:43am
:)
http://www.nytimes.com/2009/02/26/business/economy/26banks.html
I started to read this article but dozed off. Let me know what it says...
Economists are saying that with low interest rates, most should be able to refinance, and that banks should readily modify mortgages, some that are no doubt underwater. The Fed and Treasury are watching this closely, and will push and shove the banks as needed, which is why - i presume - they do not want anyone repaying TARP just yet. Repaying would take them out of the govt influence, and they will be back off to the races, but keeping them on the leash will provide the govt leverage as needed. I also think that's more about what the "stress tests" were for, so that the govt could ensure there was enough capital in each bank based on their mortgage holdings, to apply to modifying the many underwater mortgages that will need work shortly.
NO matter what, it still creates a bumpy ride it seems. But everyone is spinning as usual that the "worst is over". How many times did they say that in 1929/30?
Are the coming ALT-A/Option ARMs accounted for in the government bank "stress tests"? It seems many economist are forecasting housing and economic recovery next year, yet the next peak in ALT-A resets wont even happen until 2011 or later.
#housing