My Financial Healthcheck

This week the yield on the 10 year Treasury Bond came down from the previous week’s yearly high of 3.40% to 3.13%, when yields on the longer term bonds rise so to do longer term mortgage rates.  The Treasury has been trying to keep the yield under 3.00% as a means of helping the mortgage market interest rates.  The Treasury had announced earlier this year that they would buy $300 billion in U.S. debt assets to help keep interest rates low for consumers and businesses.  The Fed has big task ahead with mixed economic results and risk of inflation coming back which erodes the value of bonds.  The Libor (London Interbank Offered Rate) hit its all time low of .85% which suggests that the credit crisis is getting better.  The Libor is one index which is used with many short and mid term arm mortgages. The lower the Libor is when a arm resets the better it is for the consumer. More than $350 trillion in assets are tied to this index.

It was announced that more than 55,000 troubled mortgages have modified this year under the administration’s foreclosure prevention program. The administration has estimated that its has plans to help up to $9 million house-holds avoid foreclosure.  There has been many complains reported from homeowners getting the runaround from servicers and record number of foreclosures have been reported recently.  If my math is correct it will take a long, long, long time to get close to the fuzzy math that Washington is using. They have offered different incentives for banks to offer these modification programs, it would seem they need to sweeten these incentives or it might be there is allot of mistrust with this administrative trying to control more of private businesses.