Fed Is Poised for More Easing

WSJ ^ | OCTOBER 21, 2011 | JON HILSENRATH

[Qbert]

Federal Reserve officials are starting to build a case for a new program of buying mortgage-backed securities to boost the ailing economy, though they appear unlikely to move swiftly.

The idea would be to target any new efforts by the central bank at the parts of the economy that are most severely impeding a recovery—the housing and mortgage markets—by working to push down mortgage rates.

Lower mortgage rates, in turn, could encourage more home buying and mortgage-refinancing, and help the economy by freeing up cash for consumers to spend on other goods and services. Mortgage rates are already very low, ...

[Qbert]

"Fed Is Poised for More Easing"

The definition of insanity...

[ken21]

lucky us,

/s

[SunTzuWu]

They are doing everything they can to keep interest rates down. They know that if interest rates rise they cannot service the debt.

[FritzG]

'a new program of buying mortgage-backed securities'

Thanks again, 'banks'. They get to shovel their !@#$ off to the taxpayer.

[Tublecane]

“Federal Reserve officials are starting to build a case for a new program of buying mortgage-backed securities to boost the ailing economy”

Yesterday, upon reading an article about how Bernanke told Democratic congressmen that there wouldn’t be any more stimulations, I said, “I don’t believe him.” This I believe.

[Tublecane]

“They know that if interest rates rise they cannot service the debt.”

Actually, if interest rates rise we might have a chance at recovery (after a sharp downturn), which, along with slashing spending, is our best chance at managing bankruptcy.

[RicocheT]

“...a new program of buying mortgage-backed securities to boost the ailing economy...”

Another bad idea on top of prior bad ideas. The Fed, our government-we tax payers, buying up crap, worthless mortgage securities to again bail out banks and financial institutions which presently hold the securities will NOT boost the economy. It’s another huge increase in government borrowing, or issuing and then itself buying bonds (debt) and will cause inflation due to the paper dollar being more worthless.

Householders with problems paying mortgages can be dealt with in the private sector, without another dumb government intervention. Those who are current oar almost current on payments are already being offered refinancing at better rates and terms to bring down their monthly payments. Those who are badly in default should go through the bankruptcy process to wash out the debts. The latter seems harsh, but the property becomes available to other buyers who can afford it. The bank loses its money, but the debt already is booked as a loss and most banks will survive the write downs.

[bkopto]

Pick up your gold and silver now, while its still cheap.

[Buckeye McFrog]

Now would be a good time for Rick Perry to accuse Bernanke of treason again

[KarlInOhio]

Householders with problems paying mortgages can be dealt with in the private sector, without another dumb government intervention. Those who are current oar almost current on payments are already being offered refinancing at better rates and terms to bring down their monthly payments. Those who are badly in default should go through the bankruptcy process to wash out the debts. The latter seems harsh, but the property becomes available to other buyers who can afford it. The bank loses its money, but the debt already is booked as a loss and most banks will survive the write downs.

One big change is to for the banks to book the value of the underwater mortgages at market prices instead of the banks' make believe values. If they have to count that $200,000 mortgage on a $150,000 house as only being worth $150k instead of pretending that it will eventually be paid at the full $200k, they will be more willing to accept a refinance and or a short sale. Right now they have an incentive not to clear it from their books because they will have to take a financial hit upon doing so. They should have taken that hit years ago.

[afraidfortherepublic]

Why don’t they ease the rules for small business lending? We’ve been trying to re-fi our manufacturing company for over a year with no relief in sight.

[pfony1]

Anyone who has appplied for a mortgage recently knows that there is a BIG problem with all the new “paperwork”.

Lowering the interest rate won’t fix that.

For example, when I applied to reduce the rate on an existing mortgage, I was asked some goofy questions. Most amazing to me were questions about a one-room schoolhouse that had been built on a property that I had owned about 20 years ago. That schoolhouse had been demolished long before I bought the property and I had only owned that property for two years. Goofy, indeed....

Prior to these questions, I had provided my tax returns, earning statements, bank statements, brokerage account statements, a very strong credit rating and a 10-year history of prompt mortgage payments to the very same bank that held the mortgage, whose rate I wanted to modify.

Did I mention that, although the loan to value ratio was about 50%, no cash was to be taken out?

After two weeks of run-arounds, I stopped the process. I wasn’t saving enough money to justify the time I was wasting.

[killermosquito]

Economies expand and contract. If government doesn’t allow the contraction now then the consequence will be far worse later. Trust the invisible hand. Central planning never works.

[noprogs]

Yep. They are easing us right off the edge of a cliff.