MBS RECAP: Out at Best Levels


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1:21PM  : 
REGULATORS ANNOUNCE SERVICER SANCTIONS
* U.S. BANK REGULATORS ANNOUNCE AGREEMENTS WITH MORTGAGE SERVICERS IN FORECLOSURE PROBE * FINES RELATED TO MORTGAGE SERVICING ABUSES STILL TO BE DETERMINED — U.S. REGULATORS * U.S. REGULATORS SAY FIND WIDESPREAD MORTGAGE SERVICING PROBLEMS * BANKS AGREE TO COMPENSATE BORROWERS WHO WERE WRONGLY FORECLOSED UPON AND TO OVERHAUL THEIR MORTGAGE OPERATIONS -REGULATORS * UNDER THE AGREEMENTS, SERVICERS HAVE 60 DAYS TO FILE ACTION PLAN WITH REGULATORS TO COMPLY WITH REQUIRED CHANGES -REGULATORS * SERVICERS MUST HIRE CONSULTANT WITHIN 45 DAYS TO REVIEW FORECLOSURE ACTIONS BETWEEN JAN 2009 AND DEC 2010 -REGULATORS * MORTGAGE SERVICERS REQUIRED TO PROVIDE A SINGLE POINT OF CONTACT FOR BORROWERS TO GET INFORMATION ON LOAN MODIFICATIONS AND FORECLOSURES -REGULATORS * SERVICERS WILL BE PROHIBITED FROM SO-CALLED “DUAL-TRACKING” OF STARTING A FORECLOSURE WHILE A LOAN MODIFICATION IS PENDING -REGULATORS * REGULATORS SAY SERVICERS WHO SIGNED AGREEMENT ARE BANK OF AMERICA, ALLY FINANCIAL, HSBC, JPMORGAN, METLIFE, PNC, SUNTRUST, US BANCORP, WELLS FARGO, AURORA BANK, EVERBANK, ONEWEST BANK, SOVEREIGN BANK, CITIGROUP

12:19PM  : 
Inflation and Deflation: Basic QAs
The St.Louis Fed has published educational content on inflation and deflation. Here are a few excerpts: Q. How is the inflation rate measured? A. Although the level of inflation can be measured in several ways, one of the most widely used measurements is the consumer price index (CPI). This index is a monthly measure of the average change over time in the prices paid by urban consumers for a “market basket” (80,000 items) of consumer goods and services. This urban consumer group represents about 87% of the total U.S. population. Q. Downward movement in the prices of goods and services (lower prices) sounds good. So why is deflation considered a problem? A. Deflation can have undesirable “snowball” effects on an economy. Although it may sound good, a general decreasing trend in prices discourages spending and investment because consumers delay purchases while waiting for prices to drop further. For example, if the price of electronics, such as computers, tablets, and the latest phones, consistently dropped every week, you would probably delay purchasing these items until the price was as low as possible. Delayed spending results in fewer sales and less revenue for businesses, which in turn reduces the need for employees and thereby increases unemployment. Another factor to consider is the cost of credit during deflationary times. Since the value of money increases in a deflationary environment (each dollar will buy more goods and services), debtors must repay their old loans with more-valuable dollars, to the benefit of their creditors. CHECK OUT ALL THE QA’s here: http://www.stlouisfed.org/publications/itv/articles/?id=2083

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