Bank stocks experienced a strong rebound in Tuesday’s trading as the The Fed Chairman Bernanke addressed the nation and assured investors that though the recession would linger longer, banks were going to survive. In response to the remarks, Bank of America and Citi Bank’s stock shot up over 20%. This rise in stocks puts an end to the 6 day selling streak the Dow experienced as well as the slaughtering of financials we have seen the past week.
This confidence boost was sorely needed in the financial sectors as rumors of bank nationalization and bankruptcy began to make their way around investors and analysts. President Obama and his staff continue to work on their plan to help slow foreclosures and to help consumers in modfiying their loan. We are expecting a more detailed plan to come out the next few weeks, as well as more financial institutions to come a board with Obama’s plan to work with consumers with loan modification. Having the discount rate at 0%, today provides a very unique time to have the opportunity to lock in a loan under 5%. This is crucial as many analysts believe that following the recession, we could experience rapid inflation, which could possibly send interest rates back into the teens. Talk to a professional today and begin the process of modifying or refinancing your loan!
The past week, a lot of changes have been made in Washington and it looks like many more are to come in helping consumers to modify their loans. Last week, President Obama announced his initiative to get all commercial banks to work with customers and their mortgages to find a result that is fair to both the lending institution and the consumer. Considering many of the banks are receiving government aid (or will be shortly), a lot of the banks are already required by the government to work with customers in loan modification. Also, it is rumored that the recent decision for Citi bank to allow bankruptcy judges to modify loans may spread over to other lending institutions in the near future.
During another downward trading day for Wall Street on Friday due to more speculation of the commercialization of banks, President Obama’s press secretary held a media conference in which he said that the best option for commercial banks was to remain under private ownership and that bank commercialization was not being considered. Such an announcement caused a big turn around for several of the commercal bank’s stock price as some nerves were put to rest.
On Wednesday, President Obama announced his new plan to spend up to $275 billion on a plan to help fight the disease of foreclosures, which has been spreading in every market of the US. It is estimated that by 2012, over 8.1 million homes, or 16% of all houses with mortgages, could be in foreclosure. You can see why this has been on Obama’s agenda from the very beginning. A failure to come to the rescue could be catastrophic for the US markets for years to come.
On Wednesday, February 18th, President Obama plans to outline his plan to help subsidize mortgages in his attempts to try and slow the massive foreclosure hitting the US. With the huge increase in housing foreclosures this past year and the expected amount for it to continue to increase, President Obama has been working with banks to try and find a resolve to the decaying real estate problem.
Big news from Washington hit media today as it seems the Obama administration is working to put together a plan to help subsidize mortgages to help reduce the foreclosure count for homes. Their theory is that by helping to insure certain mortgage back debt, they will instill more confidence in banks and help allow them to start lending more. Just as news hit the public, the stock market shot up in its remaining 45 minutes to almost eliminate an earlier 3% deficit in the Dow.
On Tuesday, February 10th, Secretary Geithner is set to unveil the new plan to help buy toxic assets from banks in order to build up the strength of their balance sheet. After a few weeks of consideration of different strategies, it seems like the treasury is going to introduce a program where they will encourage private equity to invest in troubled assets to help get them off bank’s books. To help encourage this, the government is offering protection of additional losses in the assets so that if they did continue to fall in price, the investor would be protected. Also, they are planning on allocating anywhere from $50-$100 billion of the remaining $350 billion in TARP funds to assets in foreclosure.
Recent news has been talking about the possibility of the Obama administration altering or doing away with the current “mark to market” accounting that is required to be used by banks at the current time. Mark to market accounting is the act of updating bank’s balance sheets with the present value of their assets, not compared to when it was first purchased, as what is usually done. Doing away with this, would most likely be a big boost for banks as their balance sheets would hold up in value much greater than they do now.
Welcome to Loan Modification Sites . Com! Due to the present economic crisis and large decrease in real estate value, many people have reached the point where they can no longer afford to pay their mortgage payment. If you are experiencing this problem, try not to panic, as you are not alone. Due to the huge increase in loan defaults, banks have begun to work with consumers in refinancing and restructuring their existing loans. Don’t be fooled by scam companies trying to cheat you out of a fee. Here we strive to list the best in the business who are qualified to help you in modifying your loan. We will also keep you up to date of what measures are being taken to help you restructure your debt and what new options become available for you to use. You do not have to give your house back to the bank. Don’t fear, Help Is On The Way!