Question: Banks like Wells Fargo and JP Morgan recently announced better-than-expected profits. The given reason is that they are making money on the refinancing of mortgages. Doesn’t mortgage refinancing imply lower rates of interest and repayment? How can they be … Continue reading
Question: Why does everyone avoid discussions about PMI (Personal Mortgage Insurance), which protects the lenders from loss and is required on all loans with less than 20 percent down (except VA & Federal Housing Administration loans)? How can there be … Continue reading
Question: If there is no way to currently value the mortgages on which the value of derivatives (collateralized mortgage obligations, etc.) depend, how are losses on those derivatives — such as AIG $62 billion loss — calculated? If you can’t … Continue reading
The Federal Reserve announced two new programs Tuesday aimed at unfreezing credit for homebuyers, small businesses and consumers. Continue reading
One week after the Bush administration changed the focus of the $700 billion rescue plan for Wall Street, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson defended the new strategy Tuesday when they testified before House members. Continue reading
- The government hopes the $700 billion bailout will get banks to lend again. Why not require them to do so?
Question/Comment: So the government hopes the $700 billion bailout will get banks to lend again. Why not require them to do so? According to the Wall Street Journal some of the banks are using the money for possible acquisitions, for … Continue reading
Lawmakers faced an intense round of negotiations Monday over a proposed $700 billion financial rescue plan as Congressional Democrats called for a cautious approach to stabilizing troubled financial markets and shoring up Wall Street’s balance sheet. Continue reading