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The hits just keep on coming!   From today’s Dow Jones Newswires:

WASHINGTON (Dow Jones)–The Obama administration is working on regulatory changes to allow the Federal Housing Administration to assist homeowners faced with “more than just temporary” losses in income, a senior U.S. housing official testified Tuesday to a U.S. House panel.   The Department of Housing and Urban Development is also requesting authority to allow the FHA to buy down balances of troubled mortgage loans, according to written testimony by HUD Director for Single Family Asset Management Vance T. Morris.   The remarks reveal fresh details of the administration’s strategy to assist homeowners at risk of foreclosure.

FHA = America’s lender. They’re slipping everything they can into an FHA-something.

NEW YORK (Dow Jones)–Fannie Mae (FNM) on Wednesday announced a two-year, benchmark-size bond issue.   This is the second bond deal this month from the mortgage finance company, and it is offered in a favorable environment.   The voracious investor demand for these issues have driven up the sizes of the handful of previous debt offerings by both Fannie and Freddie Mac (FRE) this year.   Earlier this month, Fannie sold a larger-than-expected $7 billion of five-year benchmark note. The Fed’s support of this market through its purchase of debt securities issued by Fannie, Freddie and FHLB, and the perceived tightening of ties between the government and the two mortgage enterprises have boosted investor interest.   Previously, concerns over the extent of government backing of the two mortgage giants, which were taken over by their regulator last fall, had kept investors at bay.    The central bank to date has bought $35.7 billion of these debt securities from investors, and is expected to buy $100 billion worth, or more, if necessary.

The Fed buying Fannie paper is boosting investor interest? 

WASHINGTON (Dow Jones)–Strapped borrowers would have to provide mortgage servicers some basic financial information before having their mortgage debts reduced by a bankruptcy judge, under an amendment to so-called “cram-down” legislation offered by its chief U.S. House sponsor.   The amendment could dampen slightly the impact of the legislation, by ensuring that fewer people qualify to have the principal balance of their mortgage loan reduced by a judge – known as a cram down.   Proponents say the bill will act like a stick, spurring mortgage servicers to modify more loans voluntarily, particularly once the newly announced Obama administration incentives for such modifications are in place.   The financial industry contends that it will raise mortgage rates for all borrowers. Current law allows mortgages backed by vacation properties to be crammed down in bankruptcy, but not primary residences.

Loan Servicer to Obama: “Fannie’s loan mods are defaulting at a 57% clip after six months, and you want to give me $1,000 to do one?  No thanks!”

Posted on Wednesday, February 25th, 2009 at 8:15 PM in Bailout | 2 Comments » |  Print You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.