Current Housing Indicators |
| CURRENT | PREVIOUS | ||
| Existing Home Sales | 4.49m | ▼ | 4.74m |
| New Home Sales | 309,000 | ▼ | 344,000 |
| Housing Starts | 583,000 | ▲ | 477,000 |
| Building Permits | 547,000 | ▲ | 531,000 |
| HMI | 9 | UNCH | 9 |
| Existing Home Prices | $170,300 | ▼ (annually) | $199,800 |
| New Home Prices | $201,100 | ▼ (annually) | $232,400 |
More Videos
#DIANAOLICK ON TWITTER
- Under Pressure, FHA Skews to Wealthier Home Buyers
- Huge Spike in Home Prices Is Not Real
- Investor Caution: Beware of Heat in Distressed Housing
- Foreclosures Move East as Hardest-Hit Markets Clear
- Foreclosures Fall...And That's a Bad Thing?
- After a Dip, Homebuilder Sentiment Surges Again
- Obama’s ‘Responsible’ Reno Homeowners: Are They?
- Mortgage Market Still Hampers Housing Recovery
- Bank of America Offers Principal Reductions to 200,000 Homeowners
- Short Sales: Necessary Compromise or Scamming the System?
MOST SHARED
- RIM May Cut at Least 2,000 Jobs in Restructuring: Report
- JPMorgan Trading Loss: Did Regulators Miss the Risk?
- How Nasdaq Lost Control of Facebook IPO, by the Minute
- Marc Faber: 100% Chance of Global Recession
- Bacon Tourism: From the Davos of Bacon to Bacon Mecca
- 5 Spots Where the Dollar Buys a Great Vacation
- Heard in More US States: See You in Tax Court!
- A New Look at the ‘New Poor’
- Six Pack: Beer Buzz of the Week
- Greek Exit Could Trigger 50% Fall in Euro Stocks: Analyst
- Under Pressure, FHA Skews to Wealthier Home Buyers
- Big Stock Upside for Hudson City Deal: Analyst
- 5 High-Yield Stocks Ready to Boost Dividends
- Yoshikami: Four Things You Need to Know About Gold Now
- Steinbock: The Euro Zone Endgame Begins
- Option Bulls Take Another Shot on Idenix
- How Nasdaq Lost Control of Facebook IPO, by the Minute
- Week Ahead: Europe Has Wall Street Bull on Short Leash
- Pro-Bailout Greeks Regain Lead in Polls Before Vote
- Citigroup Lost $20 Million on Facebook IPO Trades
- JPMorgan to Shake Up Risk Team After Big Loss: Report
- RIM May Cut at Least 2,000 Jobs in Restructuring: Report
- EU Finalizes Bank Reforms; Shifts Burden to Bondholders
- Spain's Bankia Eyes Stake Sales After Record Bailout
- EU Set to Launch Action Against China Over Telecom Aid
RSS FEED
Realty Check
Text Size 
Citi Jumps On Mortgage Modify Bandwagon: Does It Really Help?
 |
CNBC.com |
]and Bank of America [BAC
Loading...
()
](as part of a Countrywide settlement, since it bought Countrywide), saying that it will modify loans and save thousands of homeowners from foreclosure. Of course, it's only doing this for loans it owns, not loans that have been securitized and sold into the broader markets.
I’m all about the help, but I have some issues (I always have some issues). Citi [C
Loading...
()
]is targeting borrowers who are not yet delinquent but who could become delinquent due to any number of issues, like loan resets, loss of jobs or home price depreciation. So I have to ask about yet another moral hazard, like a whole bunch of borrowers who might not really need to stop paying their bills each month suddenly trying to jam onto the modification train.
Yes, there will be some vetting process, one would hope, but, as Fox, Pitt, Kelton’s Howard Shapiro told me this morning, “I think there will be a lot of people on the borderline and this could encourage them to become delinquent in hopes of a better deal.”
My next issue is why now? Borrowers have been swirling around the housing toilet for more than a year now, and only in the last few weeks have the big banks suddenly said, “Okeedoke, let’s have a looksee at that loan.” Could it be all that TARP money being used to pay for these modifications? I thought that TARP money was supposed to help banks to go forward in lending, not pay for past abuses.
Now Fannie[FNM
Loading...
()
] and Freddie [FRE
Loading...
()
]are jumping on the bandwagon, handily enough the day before a big hearing in the House Financial Services committee, entitled, “Private Sector Cooperation with Mortgage Modifications—Ensuring That Investors, Servicers and Lenders Provide Real Help for Troubled Homeowners.” Please define, “Real Help” Mr. and Ms. Member of Congress!
I just have to wonder, with all these programs to help the borrowers, all these banks pledging to save the homeowners, a) given the sheer number, how are they going to have the manpower to process all these individuals and b) since many of these plans are only temporary modifications, aren’t we just pushing the problem out a few years??
CitiMortgage’s announcement that it could lower the interest rate on loans to 1-2 percent temporarily is essentially offering the same temporary teaser rate that the subprime lenders offered at the height of the housing boom. “It’s sad when the only way to ‘save’ housing and get borrowers out of default is keep them terribly leveraged by cutting their rates to 1-2 percent,” says Mark Hanson, aka Mr. Mortgage. “Exotic loans with teaser rates is what got us here in the first place,” he adds.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes
