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Countrywide deal could give modest boost to mortgage industry
WASHINGTON, D.C. -- Bank of America's $4.1 billion rescue of Countrywide Financial could help stem economic turmoil by giving global investors more confidence in the battered U.S. mortgage industry.It also bolsters arguments that government intervention isn't the only way to assist struggling companies and settle nervous credit markets.But experts say it's nowhere near a complete fix for the U.S. housing mess, as investors are still jittery about looming losses in mortgage-related investments. The threat to homeowners isn't over yet, either, analysts say, as 1.8 million subprime mortgages made to borrowers with poor credit are scheduled to reset to higher rates this year and in 2009.“Hopefully this is a signal that things are a little bit better," in the housing and mortgage sector, said Torsten Slok, senior economist with Deutsche Bank in New York.Still, investors weren't too reassured on Friday.
Scrutiny and Self-Scrutiny on Loans
A community college financial aid director was at a meeting a year ago with a group of colleagues from other institutions. Over lunch, one of the aid directors "brazenly admitted to pitting one lender against another so that he could get the best NBA playoff seats." The community college official, who asked not to be named, was horrified that an aid officer would be encouraging lenders to in essence bid on his good will. Others aren’t shocked. .
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