Wednesday, October 22, 2014

America's housing policy: The definition of insanity

If the definition of insanity is "doing the same thing over and over again and expecting a different result," then clearly Albert Einstein is not responsible for America's housing policies.
Federal Housing Finance Agency director Mel Watt on Tuesday unveiled new regulations that would make it easier for Americans to buy a house with little or no money down. The rules are aimed at private lenders who opposed a proposal that borrowers make a 20% down payment.

“Finalizing this rule represents a major step forward to providing greater certainty to the housing finance market and paves the way for increased participation by the private sector,” Watt said Tuesday at the Mortgage Bankers Association's annual conference held at the Mandalay Bay in Las Vegas (A casino? Really? The optics couldn't be worse.)

In 2013, less than 2% of the $1.6 trillion of MBS issued were so-called private-label securities, meaning they did not have government backing.

In separate but related news, Watt earlier this week announced that Fannie and Freddie are planning to guarantee loans with down payments as little as 3%, down from 5% previously and back to pre-crisis levels.

5 Social Security changes coming in 2015

Social Security recipients will receive 1.7 percentbigger checks in 2015, the Social Security Administration announced today. And some groups of workers will begin receiving benefit statements in the mail with a list of taxes paid and an estimate of their future retirement benefit. Here's a look at the new Social Security benefits, taxes and services workers and retirees will experience in 2015:
Bigger payments. The 1.7 percent cost-of-living adjustment is expected to result in the typical retiree getting about $22 more per month. This change will increase the average monthly benefit for retired workers in January 2015 from $1,306 before the cost-of-living adjustment to $1,328 after. The average benefit for retired couples who are both receiving benefits is projected to increase by $36 to $2,176 per month.

Our Ebola Stocks Could Double Overnight

I  believe we are in the midst of one of the greatest profit opportunities you’re ever going to see in your lifetime.
Stop listening to what the government is telling you. Turn off CNN. Forget what you see on the news. And for God’s sake, forget about the market crashing.
Right now, we are in the early innings of the greatest profit opportunities of the 21st century. A biotech boom that’s about to hit epic proportions thanks to Ebola.
If I’m right, we are going to see Ebola in New York, Los Angeles, San Francisco and Miami. And when this happens, every single stock that has anything to do with Ebola is going to soar.

Slump in mortgage rates fails to rally home buyers

More proof that low mortgage rates are not the key to home ownership: Rates dropped to their lowest level in nearly 18 months last week, causing an 11.6 percent rise in applications, the Mortgage Bankers Association reported Wednesday. The gains, however, were driven entirely by refinances, just as they have been for several weeks.

Refinance applications jumped a whopping 23 percent week-to-week on a seasonally adjusted basis; volume was at the highest level since November. Mortgage applications to purchase a home saw no boost at all from lower rates, falling 5 percent from the previous week and 9 percent from a year ago.
"Continuing concerns about weak economic growth in Europe and a few U.S. economic indicators that came in below expectations caused a flight to quality into U.S. Treasurys last week, leading to sharp drops in interest rates," said Mike Fratantoni, the MBA's chief economist. "Mortgage rates have fallen close to 30 basis points over the last four weeks."