Some Tax Day Must-Reads:
- Calculated Risk has a great post on second mortgages from housing economist Tom Lawler. The largest mortgage loan servicers provided some statistics meant to dispute the claim that second mortgages have "virtually no value" because borrowers with seconds have total mortgage balances that exceed the value of the home collateralizing the mortgages. For example, although 50% of Chase's second lien portfolio is underwater, 95% is performing. Even more shocking, 30% of its second lien mortgages have combined loan-to-value ratios over 125% and 94% of this portfolio is still performing. People are just incredibly optimistic about future home values or they just like paying their bills. Much more in the post, I urge you to read the whole thing here.
- The administration released its March HAMP report. As of March 2010, the program has performed just over 1 million in total modifications, with 227,922 of those permanent so far. Clearly, alot of folks still in mod limbo. Interestingly, debt-to-income ratios for those who received permanent mods were 45% on the front-end (this includes principal, taxes, insurance and homeowners associate fees) and 78% on the back-end (includes other stuff like payments on installment debt, junior liens, alimony, car lease payments and investment property payments,) before the modification. Clearly, people got overextended in every which way, not just on their mortgages. Why we're helping people service all of this other debt by reducing their mortgage payments is kind of a mystery to me. I mean really, if you're making payments on investment property, you should be forced to sell it before taxpayers pick up the tab on your mortgage. I'll cut you some slack on the child support. I'm not totally heartless. Just something to ponder as you walk to the mailbox with your tax returns.
Piles of domestic economic data released today including:
A few choice international headlines:
- Everyone in a panic about Greece again as there was "no strong interest in the US for Greek debt." Don't worry, this will likely change tomorrow as the Greek rally/Greek sell-off/Greek rally/Greek sell-off ping-pong match will continue until the entire European Union experiment collapses in a heap (maybe George Soros is exaggerating, but he's been known to be right before.)
- China GDP is exploding at a 11.9% annual rate. Don't worry, I'm sure that kind of growth is entirely sustainable without creating a bubble in something.
Dueling Fed interest rate policy speculation:
Don't forget to pay your taxes.
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