On Wednesday, March 18th, The Federal Reserve will meet for their FOMC meeting to discuss updates with the economy, the discount rate, and other economic variables. It is expected that The Fed will leave the discount rate at its current level, which is a range between 0-.25%. This means that, most likely, interest rates for homes will remain low, especially those that have good credit.
With the recent news of bank’s balance sheets shrinking 17%, The Fed has taken initiative to help inject liquidity into the credit markets. The Fed is considering a bailout structure in the amount of $600 billion, which would involve buying up bonds that are issued by US housing agencies, such as Fannie Mae and Freddie Mac. Other measures which are being discussed, are the possibilities of buying up US Treasuries and Corporate bonds to help bring stability to the equity markets. With the addition of these measures, the plan could amount to over a trillion dollars.
The Federal Reserve plans to make an announcement on Wednesday at 2:15pm Eastern to discuss the results of their meeting. Indeed such an announcement could have a huge impact on loan modification and mortgage refinance. With more help coming to housing agencies, it creates more incentive for lending institutions to work with your loan. We are still in the best of times to discuss ways to modify your loan, as banks are working more and more with their customers. Start now and CLICK HERE TO BEGIN THE PROCESS OF MODIFYING YOUR LOAN!
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For the first time since December of 2008, the DOW closed up four days consecutively. This rally in the stock market is being led by the financial institutions, as many of them saw their stock go up anywhere from 40-100% in just a week. This recent return of confidence in lending institutions is good news for your mortgage and loan modification. Both Bank of America and Citi Group announced this week that they are well capitalized and are actually yielding profits in the current quarter. Both feel that they will not need further government funding to keep them alive, as both have recieved tens of billions of dollars from the government.
On Wednesday, the Obama Administration gave more details on their plan to help consumers to modify their loan with their financial institution. With the national number being close to 10% of all houses are either in foreclosure or late on their payment, President Obama and his staff have been busy trying to find the best solution to help lower this number and find a fair way to help home owners.
On Wednesday, President Obama unveiled the mortgage relief program the government will be issuing, to help slow the massive trend of home foreclosures and help consumers in modifying their loan. On Wednesday, the Obama administration launched the $75 billion plan, which now includes the ability to help those who are behind on their payments and close to foreclosure to participate in loan modification. The new plan aims to reduce principal payments as well as interest rates for those who qualify for the mortgage help.
The government is requiring major US banks who are eligible for TARP funds to participate in frequent “stress tests” to show how stale the financial institution is in case of severe economic turmoil The tests will entail many scenarios of which is foreseeable in the near future if the economy continues on the trail it’s on, and show how well the bank will be able to perform in such an environment. Some aspects of the test include a scenario if:
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.
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, 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.