Principal Reduction Debate: Focused Attention Needed

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Mar 11, 2011 11:42AM Principal Reduction Debate: Focused Attention Needed Three Federal Reserve economists are out to debunk the theory that reducing principal balances on mortgage loans is a no-cost cure for the housing crisis. The three, Kris Gerardi, Federal Reserve Bank of Atlanta, Chris Foote, and Paul Willen, Federal Reserve Bank of Boston, recently published their paper, The Seductive but Flawed Logic of Principal Reduction , in the Atlanta Fed banks' Real Estate Research Blog. The idea that a reduction program would cure housing ills has been kicking around since... Mar 11, 2011 4:58PM MBS LEDGE: Room to Rally with Little Reward to Offer Lots of headlines to digest lately. What region is the market focused on again? North Africa, The Middle East, Spain, Portugal, Greece, China, Japan, the U.S.? What trade is the market working right now? Long Oil? Short Stocks? Long Gold? Short Bonds? Long the Dollar? Wait. What about economic fundamentals? Expansion? Contraction? Inflation? Deflation? Reflation? Rate Hike? QEIII? Certainly enough to make you wonder what's priced into asset valuations and what isn't priced into asset valuations.... FHA Commissioner David Stevens Resigns; Foreclosure Sale Horror Story; Another Originator Compensation Lawsuit; Credit Suisse Settles Housing Finance: Credit Policies Dictate Private Demand Mortgage Rates: Running into Resistance Fewer Default Notices in February. Home Repos Restricted Dealers Tender Aggressively for Long Bond. Rates Rallying Servicer Settlement Terms Released to Public View: Front Page | Headline Viewer Micro News 4:45 PM: FHFA Extends Refinance Program By One Year Washington, 4:11 PM: Next Week Bookended by Data-Free Days 3:23 PM: Loan Pricing Update: 3/11/2011 3:17 PM: Mortgage Rate Guidance: Steady Drip in Process 12:41 PM: Reprices for the Worse Continue as Bonds Drift Lower 12:19 PM: Ginnie Mae MBS Issuance Near $26 Billion in February 12:16 PM: BLS DATA: Job Openings and Labor Turnover 11:06 AM: MetLife Shares More Guidance on Originator Comp Plan »View All Micro News Around the Web Off the Charts: Borrowing Again, but Less on Credit Cards Obama vows to dampen fuel prices, calls for reform Real Estate News: Banks Push Back on Foreclosure Pact Consumer Sentiment declines sharply in March Dudley signals Fed won't tighten any time soon Credit Score Changes Befuddle Consumers »View More Around the Web Video News Gross Says U.S. to Keep AAA Credit Rating for Some Time Presidential News Conference Red Cross Responds »View More Video News Today's Comments "I wonder how the authors can make this statement: "One flaw in this is a misreading of the underlying economic theory". Kind of like this theory..." "One item not mentioned is the 'penalty' to borrowers who do pay their mortgage on time by diluting their property value with a reduction in mortgage..." "Adam, in reference to the 3/31 lock desk discussion from yesterday. I think that the increased locks are going to be originator driven. I have heard application..." »View More Comments Today's Q&A "How do i send extra payment to morgage towards principle only..." "If my agent is selling my home and showing me my new home how..." "What is the quickest and easiest way to transfer complete ownership..." »View More Q&A Today's Forum Discussions "Loan Scenario View All Post A Scenario Loan State: California Loan County: --- Loan Type: Cash Out Refinance Loan Amount: $230,000 Property Value: $340..." "I'm hearing some noise about 80/10's coming back in the market. Anyone know which investors are offering this? The only outlet we have for 2nds..." "I have a house foreclosure clean-up business in Nashville, TN. Free estimates, references & reliable. Our rates are the lowest possible and look forward..." »View  Forum Discussions jeffer90576 -view profile -edit profile Subscription Level: Non-Premium Manage Account Market Data Mortgage Rates 30YR 4.89 0.01 15YR 4.10 0.02 FHA30YR 4.71 0.02 Jumbo30YR 5.60 0.03 5/1ARM 3.52 0.00 MBS Quotes FNMA 3.5 94-02 -0-15 FNMA 4.0 98-15 -0-10 FNMA 4.5 101-28 -0-09 FNMA 5.0 104-23 -0-08 Treasuries 2 YR 0.6450 0.0120 3 YR 1.1411 0.0111 5 YR 2.0534 0.0234 7 YR 2.7623 0.0293 10 YR 3.4025 0.0405 30 YR 4.5480 0.0460 Recent Housing Data Visit our Market Data Center for all of the latest housing numbers, graphs, etc. New Home Prices 8.04% Homeownership -0.60% Home Vacancy 8.00% Forward Know someone who might be interested in this email? Forward it. Newsletter Archive Front Page | Headline Viewer | Video | Forums | Q&A | Market Data | Rates | Marketplace : Consumer - Industry © 2011 Brown House Media, Inc. All rights reserved. Brown House Media Inc. - 19706 One Norman Blvd - Cornelius, NC 28031