U.S. stocks rose on Wednesday, adding to the previous session's surge and lifting the Standard & Poor's 500 index by 1 percent, as investors bet the Federal Reserve's aggressive rate cut would help prevent an economic slowdown.
National City Corp said on Monday it expects a third-quarter mortgage banking loss of around $160 million, the high end of its forecast, hurt by slumping housing demand and tighter capital markets.
Countrywide Financial Corp, the largest U.S. mortgage lender, said on Thursday that it had lined up $12 billion of secured financing to help cope with a housing slowdown that has reduced loan demand and will lead to widespread layoffs.
Mortgage finance giants Fannie Mae and Freddie Mac are abiding by rules that require them to avoid buying risky subprime loans, the companies' regulator said on Monday.
Bush administration officials on Friday sought to ease fears the U.S. was tipping into recession after a government report showed the economy shed jobs for the first time in four years last month.
U.S. stocks surged on Friday as President Bush and Federal Reserve Chairman Ben Bernanke reassured investors they would do what was needed to shelter the economy from market turmoil. Banks and brokers, which have borne the brunt of the recent credit crisis, rose in thin trading before a long holiday weekend.
Prepared text of Federal Reserve Chairman Ben Bernanke's speech at Kansas City's Economic Symposium, Jackson Hole, Wyo.
Freddie Mac, the nation's second-largest source of home loan funding, said on Thursday its second-quarter net income fell 45 percent from a year earlier as more borrowers defaulted on their loans.
Former Treasury Secretary Lawrence Summers said on Sunday the risks of a recession are greater now than at anytime since the September 11 attacks due to real estate and mortgage market troubles.
Fannie Mae's mortgage portfolio swelled in July, when the largest U.S. home funding company bought up cheap mortgage-backed debt, leaving it scant room to grow under current limits set by its regulator.
The Federal Reserve's attempts to provide liquidity in the past few days are not reaching the players who need it since they cannot borrow directly from the central bank, leaving the $7.2 trillion U.S. mortgage bond market struggling to clear the volumes being offered.
Tightening global credit markets have taken a toll on U.S. mortgage-backed securities issued by Fannie Mae and Freddie Mac and it will take more than recent Federal Reserve measures to boost liquidity.
U.S. Treasury Secretary Henry Paulson said on Tuesday he was talking with housing finance giants Fannie Mae and Freddie Mac about policy options to ease strains in mortgage markets, including possible legislation that could expand their mortgage investment options.
Senate Finance Committee Chairman Christopher Dodd on Tuesday said he asked the Bush administration to lift the portfolio caps on housing finance giants Fannie Mae and Freddie Mac, but Treasury Secretary Henry Paulson expressed reluctance to do so.
Fannie Mae, the nation's largest source of home loan funding, increased its holdings of risky subprime loans in 2006 while its profits fell that year, the company said on Thursday in a long-delayed report.
In just eight words, the Federal Reserve waded deeper into a touchy debate over whether consumer spending can stand up to a housing market downturn.
Stocks rallied on Monday as investors snapped up beaten-down shares of financial companies after a sharp drop at the end of last week on mounting concerns about the stability of the credit markets.
The head of Freddie Mac, one of the biggest U.S. mortgage finance companies, dismissed suggestions that his company should step in to bolster sagging financial markets by buying distressed loans, the New York Times reported on Saturday.
A number of U.S. states are setting up funds to help homeowners with risky subprime mortgages refinance to more affordable loans in a bid to slow the rate of home foreclosures, The Wall Street Journal reported on its Web site.
Turbulence in the housing market remains largely restricted to the subprime sector, Timothy Bitsberger, treasurer and senior vice president at Freddie Mac, said on Tuesday.
A sustained push above 5 percent on the yield of the benchmark 10-year Treasury note could roil markets, deepen housing woes and slow the U.S. economy.
Freddie Mac, the second-largest U.S. home funding company, on Wednesday launched $3.0 billion in new five-year reference notes due Aug. 20, 2012, with pricing expected on Thursday, said joint lead manager JP Morgan.
