How and why are big banks participating in mortgage relief programs? Here are four resources to better understand why mortgage relief is quickly becoming a hot topic.
1 – U.S. Backs Fannie, Freddie Stock
The Treasury Department reiterated that the U.S. stands behind a preferred-stock purchase agreement. The Wall Street Journal explains.
The agreement was unveiled Sunday to protect current and future investors in debt and mortgage-backed securities issued by the two mortgage-finance companies. Under the agreement, Treasury can inject up to $200 billion in the two companies. In return, it received $1 billion in preferred stock from each company, along with warrants to purchase almost 80% of each firm’s common stock. The Treasury hasn’t paid out anything to the firms, but would inject capital into the companies as needed to keep them solvent.
2 – U.S. Steps Up Help for Homeowners
Fannie Mae and Freddie Mac, which are under government control, said they would help streamline the modification of loans for potentially hundreds of thousands of homeowners who are 90 days or more behind on their mortgage payments. Again, The Wall Street Journal explains.
The potential reach of the program is constrained by the large number of mortgages, especially subprime, which have been bundled into packages of securities and sold to investors around the world. The practical and contractual complexities surrounding these securities renders the mortgages hard to change.
3 – New Mortgage Plan Just a Drop in the Bucket?
Was yesterday’s government move enough? Analysis by The Wall Street Journal.
In its statement on the program, the Federal Housing Finance Agency says its new plan can help “thousands†of borrowers stay in their homes, but the problem is much bigger than “thousands.†More than four million homeowners, or 9% of borrowers with a mortgage, were either behind on their payments or in foreclosure at the end of June, according to the most recent data from the Mortgage Bankers Association. There were 765,000 foreclosures in the third quarter alone.
And if that isn’t working? Try hypnosis to shrink your financial fears.
4 – A Hypnotic Answer to Financial Angst
After Gary Manouelian was laid off last year as a customer-service representative, he was anxious about his ability to pay off his mortgage and credit-card debt. So he sought help through hypnosis.
Thirty sessions and $1,500 later, Mr. Manouelian says he has since landed a government job and is working to pay off his debts. For this he thanks his hypnotist, Laura Ryan-Day in Austin, Texas.
Again, The Wall Street Journal reports.
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