By jared.folkins
Filed in Database, bend, economics, housing, oregon
Tagged with bend, Estate, fannie, freddie, housing, oregon, Real, tarp
February 5th, 2010 @ 7:00 am
There is a lot of speculation that mortgage rates will rise above 6% once the Government’s different programs run their course (TARP, $8000 New Home Buyer Credit, etc) and financial institutions stop their foolish purchasing. Believe me, this is a good thing. Especially if you have been saving cash to buy a home. High interest rates make everyone’s cash in the transaction more valuable. And reading articles like the one below are indicating exactly that. Now, whether or not the Government steps in with something new to prop things up is anyone’s guess. But if they don’t…watch out. Housing prices would have no where else to go.
LINK
MORTGAGE FINANCING
FHFA reducing Fannie, Freddie portfolios
The federal regulator in charge of Fannie Mae and Freddie Mac said Tuesday that the mortgage finance giants would not be taking on additional measures to bring down interest rates on home loans as other government programs to stimulate the housing market expire.
The Federal Housing Finance Agency said it is committed to reducing the companies’ mortgage portfolios and does not expect the firms “to be substantial buyers or sellers of mortgages.” The agency said it expects private investors will step in as other government initiatives, such as the Federal Reserve’s trillion-dollar mortgage-acquisition program, wind down.
– Zachary A. Goldfarb
The scary part is that more and more of my friends are walking away from their homes. And this downward pressure on home prices will incite more debt slaves home owners to do just that. Walk away. So where does it stop?
What the brains are reporting
LINK
BR Capital Markets analysts on Thursday upgraded Wells Fargo & Co.(WFC 27.88, -0.13, -0.45%) to market perform from underperform and raised its target price to $26 from $21, saying earnings continue to surprise on the upside. “The big takeaways from the quarter are flat revenues and stabilizing total credit losses,” FBR said in a note. Wells Fargo on Wednesday said it swung to a fourth-quarter profit that beat analyst expectations. The stock was up about 1% in early trading Thursday.
LINK
Fourth-quarter earnings at the four major commercial banks show a divide between those that achieved profitability (JPMorgan Chase(NYSE: JPM) and Wells Fargo (NYSE: WFC)) and those that didn’t (Bank of America (NYSE: BAC) and Citigroup (NYSE: C)). Nevertheless, even in the “lead pack,” loan loss rates continued to rise across virtually every loan category. Should Wells Fargo shareholders be concerned?
Shares look cheap
The risk of further credit losses at quality banking institutions is offset by share valuations, which look pretty cheap … on the basis of “normalized” earnings that are probably a couple of years down the road (see table). Last week, for example, value guru Bill Miller of Legg Mason (NYSE: LM)spoke approvingly of the shares of JPMorgan Chase and Bank of America. As far as Wells Fargo is concerned, I continue to believe the acquisition of Wachovia will add enormous value to the franchise over the long term.
What the mouth is saying
(Video) Wells Fargo on repaying TARP funds.
What the hand is doing
Wells Fargo Postit Note
Believe me, once that “normalization” process starts. Meaning that Wells Fargo actually has to value its crap-tastic assets at market value, we should see some pretty painful news again.
