FEDS WANT TO UNFREEZE CREDIT -- HOME PRICES CONTINUE TO DECLINE

Fed Looks To Unfreeze Credit With Term ABS Loan Facility

On the same day as its announcement of a $600 billion program to buy the direct obligations and mortgage-backed securities of the housing-related government-sponsored enterprises, the Federal Reserve Board said it would create a facility that will help market participants meet the credit needs of households and small businesses by supporting the issuance of asset-backed securities (ABS) collateralized by student loans, auto loans, credit card loans and loans guaranteed by the Small Business Administration.

The facility, called the Term Asset-Backed Securities Loan Facility (TALF), aims to increase credit availability and support economic activity. Under the TALF, the Federal Reserve Bank of New York (FRBNY) will lend up to $200 billion on a nonrecourse basis to holders of certain AAA-rated ABS backed by newly and recently originated consumer and small business loans.

The FRBNY will lend an amount equal to the market value of the ABS less a haircut and will be secured at all times by the ABS. The U.S. Treasury Department, under the Troubled Assets Relief Program of the Emergency Economic Stabilization Act of 2008, will provide $20 billion of credit protection to the FRBNY in connection with the TALF.

SOURCE: Federal Reserve via MortgageOrb.com


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Home Price Declines Continue Through Third Quarter

Broad-based declines in the prices of existing single-family homes across the U.S. continued through September, according to Standard & Poor's S&P/Case-Shiller U.S. National Home Price Indices.

The decline in the index, which covers all nine U.S. census divisions, remained in double digits, posting a record 16.6% decline in the third quarter of 2008 versus the third quarter of 2007. This has increased from the annual declines of 14.0% and 15.1%, reported for the first and second quarters of the year, respectively.

The 10-City and 20-City Composites continue to set new records, S&P adds, with annual declines of 18.6% and 17.4%, respectively.

“The turmoil in the financial markets is placing further downward pressure on a housing market already weakened by its own fundamentals.” says David M. Blitzer, chairman of the Index Committee at S&P. “All three aggregate indices and 13 of the 20 metro areas are reporting new record rates of decline. Looking at the returns of the U.S. National Index, prices are back to where they were in early 2004.”

Phoenix was the weakest market, reporting an annual decline of 31.9%, followed by Las Vegas, down 31.3%, and San Francisco at -29.5%. Miami, Los Angeles, and San Diego did not fair much better, with annual declines of 28.4%, 27.6% and 26.3%, respectively.

SOURCE: S&P via MortgageOrb.com


Be blessed,
Wayne

www.Capstone-Ministries.org

Love all - Trust some - Harm none

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