home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map

www.loan-academy.com/
twitter linkedin
facebook google+
Search:

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

Political Mortgage News | Mortgage Laws
Mortgage people in politics. Political contributions by mortgage companies. Coverage of political support by lenders and executives. GSE lobbying and issues.



Bailout Deal Possible by Next Week

Update on congressional negotiations

September 26, 2008

By ANNE C. CANFIELD
Canfield & Associates Inc.


Lawmakers' discussions on the housing bailout package remain fluid, and all sides are now negotiating and making public statements indicating that they are working together. So, it appears that some sort of agreement will eventually be reached and passed -- possibly by this Sunday.

Of course, the "devil is always in the details," but here is where it stands now.

A Treasury plan, as modified by the House and Senate Democrat and Republican negotiators today, will be the basis from which any agreement will emerge. While it is not clear what changes will be made, the changes could range from adding another element to the plan -- such as a new loan insurance component -- to reducing the scope of the troubled asset purchase program.

But congressional policymakers continue to view the package as a financing plan and not an asset purchase plan. As a result, they continue to include provisions that will likely make the program unworkable.

For example, it does not appear that warrants or executive compensation provisions would work.

If these provisions remain in the bill, either nothing will happen because no one will participate or taxpayers will lose money because companies will factor in the cost of warrants and compensation into their asset sale decisions. Another possible outcome is that only companies with worthless assets or warrants will participate.

Legislators also need to realize that the mark-to-market accounting requirement is coming under significant criticism because it created an unncessary crisis. This flawed accounting rule has failed miserably by creating unstable markets which have only benefitted short-sellers and vulture funds taking advantage of the volatility and artificially depressed asset prices.

Essentially, bad mortgages were at the bottom of this debacle. But the rule took a bad situation and needlessly created a disaster out it.

Policymakers should first suspend the mark-to-market rule and, ideally, shelve it permanently.

On a longer-term basis, lawmakers should improve financial industry regulation and replace substance over form. They should also place absolute leverage limitations on financial institutions at much lower levels than the 30:1 levels (60:1 in the case of Fannie and Freddie) that led to this crisis.

Other possible enhancements include the outlawing of off-balance sheet entities, a complete restructure of the government sponsored enterprise model after they emerge from conservatorship and changing incentives so that securitizations are not favored over holding assets on the balance sheet.


Related:

800 Pound Gorilla Entering Secondary Market
As the U.S. government positions itself to become the biggest secondary mortgage market player in the history of the universe, recent entrants to the market who had hoped to capitalize on bargain basement prices may find the game more expensive to play. But at least one private equity firm sees opportunity in the government's participation.

Paulson Sees Bank Failures Ballooning Without Plan Approval
The secretary of the U.S. Department of the Treasury warned Congress today that if his mortgage bailout plain isn't passed -- the credit markets will freeze up and the country will see a stream of bank failures.

Paulson Sees Bank Failures Ballooning Without Plan Approval

Bailout Legislation Bogged Down
House Democrats have drafted their own mortgage bailout plan that calls for more oversight of the Treasury in its purchase of mortgage assets. As Congress grapples with the legislation, Republican presidential nominee John McCain is suspending his campaign to return to Washington, D.C., to deal with the crisis.

Mortgage Bankers Warn of Cramdown Consequences
Mortgage bankers have sent a letter to Congress warning that a proposal to allow bankruptcy judges the ability to modify mortgages could raise the cost of mortgages and stifle the recovery effort.

Bailout Goals Clouded
There is a significant controversy ensuing between the administration and various factions in Congress over warrants and related issues such as executive compensation.

More Details Emerge on Mortgage Bailout
More details have emerged on the Bush administration's legislative proposal to acquire mortgage assets and prevent a full-scale collapse of the U.S. financial system. The latest move is the biggest yet among a host of historical actions by the government this year.

Plan calls for U.S. purchase of up to $700 billion in mortgage assets

Paulson Announces Major Steps to Restore Mortgage Liquidity
The Bush administration announced major steps in unclogging mortgage securities in the U.S. financial system and said legislation may be passed as early as next week to relieve financial institutions of illiquid mortgage assets.

Paulson says GSEs, Treasury to step up MBS purchases


Anne Canfield is Executive Director of the Consumer Mortgage Coalition, a trade association representing national mortgage lenders, servicers and service providers. As the Executive Director of the CMC, Ms. Canfield has appeared publicly on nationally televised programs, at industry conferences, and testified on Capitol Hill to advocate proposals to streamline the mortgage process along with other initiatives that would benefit the industry and consumers alike. Ms. Canfield received degrees from Northwestern University and the University of Paris, Paris, France.

e-mail Anne at [email protected]



SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders