Mortgage Meltdown
Mortgage loans March 13th, 2008Home Prices Falling Further
Already under pressure, U.S. home prices have much further to fall, the chief executive of major mortgage-buyer Freddie Mac said Wednesday. Speaking to analysts on a conference call, CEO Richard Syron estimated that housing prices, from peak to trough, have dropped only a third as far as he thinks they're going to. The McLean, Va.-based company's expecting a peak-to-trough decline of 15% in all. According to the purchase-only price index of the Office of Federal Housing Enterprise Oversight, or OFHEO, prices are down 2.5% from the peak. Meanwhile, according to the Case-Shiller national index, prices are down 10.2% from the peak. FRE 19.16, -0.63, -3.2%) reported a fourth-quarter loss of $2.5 billion, blaming the weakened U.S. housing market and credit-related expenses. Shares of Freddie Mac, a government-sponsored enterprise that supplies liquidity for lenders by funding the purchase of mortgage loans through securitization-based financing, rose nearly 5% in midday trading, to $21.13. Sister company Fannie Mae (FNM: Fannie Mae FNM 20.31, -0.73, -3.5%) also gained, its shares up more than 2% to $22.51. On Tuesday, Freddie Mac's shares gained nearly 16%, rallying after the Federal Reserve said it would make available to Wall Street institutions and major banks billions of dollars in a move to boost liquidity in the financial system. The U.S. housing market's been taking its worst beating in years. In 2007, U.S. home values posted the first yearly decline in 16 years, according to two home-price recent indexes. Home prices fell 8.9% last year, the largest decline in the Case-Shiller home price index in at least 20 years, Standard & Poor's reported Feb. 26. The same day, a separate measure of home values reported by OFHEO showed a 0.3% decline in home prices in 2007. It was the first annual decline recorded in the 16-year history of the OFHEO purchase-only price index.
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MORTGAGE MELTDOWN
Mortgage loans November 30th, 2007FRANKLIN MANAGEMENT CREDIT CORPORATION may have to change their current slogan "loan acquisition specialists" perhaps to "specialists in un acquired loans." They have officially gone into our expanding database of closed lenders. Well, technically they are not yet closed, but neither are any new loans under this company. They have announced that they have suspended all new loan applications. The company successfully sold over $282 million dollars worth of loans to the Marshall and Ilsley Corporation, however, both firms will be monitoring the credit crunch carefully as the have expectedly dissolved their business relationship.