Sauros
Posts: 502
Join date: 2009-05-14
Age: 37
Location: London
 |  Subject: RMBS: Traders tend to doubt the new White House plan Thu Apr 01, 2010 5:18 pm | |
| Received this from Informa, the guys are just totally crazy. Looks like they didn't learn the lessons from 1929 | US STRUCTURED FINANCE MARKET COMMENTARY - ALL | | | 01-Apr 14:35GMT MBS: Traders tend to doubt the new White House plan | (04/01) A prominent mortgage desk put out a commentary casting doubt on the latest White House plan to stem forclosures.
"We're supposed to believe that this latest effort to build an artificial floor under home prices will perform better than the Hope Now Alliance announced by President Bush in October 2007; better than the revised Hope Now program announced two months later; better than Hope for Homeowners, which was passed by Congress and signed by Mr. Bush in 2008; better than the foreclosure moratoriums promoted by Fannie Mae, Freddie Mac and Representative Barney Frank into early 2009; better than the $127 billion that taxpayers have thus far poured into Fan and Fred, much of it for foreclosure relief; better than the Federal Reserve's purchase of $1.25 trillion in mortgage-backed securities; better than last year's expansion of the 2008 First-Time Home Buyer Tax Credit to up to $8,000; better than the billions in stimulus dollars that have been spent "to restore neighborhoods hardest hit by concentrated foreclosures," according to the White House; better than the $1.5 billion announced earlier this year to state housing finance agencies in the electorally hard-hit areas of Arizona, California, Florida, Michigan and Nevada, and $600 million more this week for other states certified as political disaster areas; and certainly better than Mr. Obama's year-old Home Affordable Modification Program to offer mortgage modifications to troubled borrowers or his companion program to offer generous refinancing. We could go on, but you get the joke, even if the housing market hasn't."
In the commentary, the desk suggests that if Washington had just let housing prices fall on their own, while painful, they would have found a natural bottom. In that scenario, pain would have been very severe for quickly for some homeowners who bought more expensive homes than they could afford, but the pain might actually be over by now.
"Instead we are heading toward year five of the housing recession, with Washington proposing even more ideas to prolong the agony. One senior banking regulator" calls it "extending and pretending," the trader wrote |
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