Housingwire.com, April 30th, 2012
HousingWire’s Morning Radar provides a look at what’s trending across media outlets nationwide.
Tracing housing failures to politics
Guess why more homeowners haven’t been helped? According to Neel Kashkari, head of global equities at the investment management firm PIMCO, in a Washington Post op-ed, the answer is political.
Kashkari, who served as an assistant Treasury secretary during the George W. Bush administration, said political constraints forced government housing programs to target limited numbers of homeowners. The danger with these programs, he adds, is that people who qualify anger those who don’t. Politicians are unwilling to anger either group of voters and opt to stay cautious.
“Unless as a nation we are willing to spend substantial taxpayer dollars to help those who need a lot of housing assistance, any new foreclosure program, even the latest silver bullet of principal write-downs, is likely to have only limited reach,” he writes.
Low down payment, hold the insurance
A new mortgage program out of Massachusetts sounds a bit risky, at least on the surface.
MassHousing, a state-sponsored not-for-profit, offers mortgages without insurance and with down payments as low as 3%, according to the Boston Globe. The agency tacks on a slightly higher interest rate to make up the difference.
Unsurprisingly, with that kind of savings, borrowers are biting. After MassHousing introduced the program in January, lending at the agency has quadrupled so far this year.
But the program has its caveats. Applicants must have a minimum credit score of 680, among other stringent requirements, and only households below 125% of the area’s median income can qualify.
The agency, according to its website, doesn’t use tax dollars but rather sells bonds to raise program funds. Those loans go to Fannie Mae, Jay Fitzgerald writes, though MassHousing guarantees it for the first six months.
Why can’t we be friends?
It seems Paul Krugman, the Nobel Prize-winning, New York Times column-writing economist, has found a new favorite target in Federal Reserve Chairman Ben Bernanke.
Krugman, in an appearance on ABC News’ “This Week,” said Bernanke should more actively try to address continued troubles in unemployment, but rather “he’s become more concerned, probably unconsciously, with defending the Fed’s institutional safety.”
“I think what’s happened to Bernanke, as they say, he’s been assimilated by the Borg,” Krugman said on the Sunday morning program.
(It’s safe to assume it’s the Borg of the Star Trek, not tennis, persuasion.)
That assessment follows Krugman’s “Earth to Ben Bernanke” column last week, in which he wrote that Bernanke’s opinions have changed since he became Fed chief.
Bernanke, for his part, said any assertions of the sort are “absolutely incorrect” during a Wednesday press conference.
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