Wednesday, July 20, 2011
Ben “bolsters the housing market”
"The proposal is aimed at promoting modifications of delinquent or defaulted home loans, including writedowns of principal, by bringing fresh private capital into the market. It would apply to mortgages that are bundled into mortgage-backed securities not issued by government agencies". "Helping homeowners avoid foreclosure would bolster the housing market, which Fed Chairman Ben Bernanke called â€œone of the major sources of the slow recoveryâ€ in testimony to Congress last week". Of the residential mortgage-backed securities outstanding, about $1.3 trn are so-called private label notes that were issued by banks and other financial institutions, according to data from the Securities Industry and Financial Markets Association. â€œThatâ€™s where a lot of the trouble is sitting,"