New US Economy Policy Message Board

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Strategies & Market Trends : New US Economy Policy

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From: Arthur Tang	8/10/2007 1:05:37 PM
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I just received a letter from Bank of America, on their No fee mortgage Plus. No application fee, No closing fee, No private mortgage Insurance, Close-On-time service guarantee, and best value Guarantee. The real mortgage situation is lack of interest by consumers to do re-mortgage. There is plenty of credit in bank reserve and Fannie Mae and Freddie Mac capacity to buy up mortgages. Homeloan bank is generally not used. Feds will be informed to quiet down the Wall street ignorance on mortgage and credit, in Fed's monetary policy at 5.25% overnight discount rate. Normal procedure is people remortgage, which is sold to banks for a few thousand dollars of profit. Then the banks in case of reserve shortage will sell the mortgage to Fannie Mae or Freddie Mac. This is the system in Fed's monetary policy, they also have the option to repo bills or bonds, and issue deposit coupons on bank reserve shortages.

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