Paul Krugman in The New York Times this morning on Freddie Mac and Fannie Mae:

[T]he storm over these particular lenders is overblown. Fannie and Freddie probably will need a government rescue. But since it’s already clear that that rescue will take place, their problems won’t take down the economy.

Furthermore, while Fannie and Freddie are problematic institutions, they aren’t responsible for the mess we’re in.

Still:

... Fannie and Freddie can’t be allowed to fail. With the collapse of subprime lending, they’re now more central than ever to the housing market, and the economy as a whole.

From the Wall Street Journal this morning:

American consumers, battered by falling home prices and soaring gasoline prices, are at their gloomiest in decades, raising fears they might cut back on spending later this year and tip the economy into a recession.

Housing gets a big part of the blame:

Consumer glumness is being fueled by an acceleration of home-price declines. Prices of single-family homes in 20 major cities dropped by 15.3% in April from the year before and are now back to 2004 levels, according to the Case-Shiller home price index released by Standard & Poor's.

Between 1996 and 2006, the median reported income for recipients of conventional home loans jumped 40 percent, from $86,000 to $120,000. That's according to the brand-new State of New York City's Housing & Neighborhoods from N.Y.U.'s Furman Center for Real Estate & Urban Policy.

More stats to come from the annual report, wherein the most recent numbers come from 2006, but that extend back to the early 1990's.

Starting in June, mortgage broker Jeff Appel will co-host a new hour-long program called NY Residential TV.

Airing Sundays at 9 a.m. on CW11, the show teaches New Yorkers about "preparing appetizers for open houses," real estate investment, and decorating.

In this week's Sit-Down, The Observer asked Mr. Appel's old boss, mortgage queen Melissa Cohn, about their relationship. It's safe to say she probably won't be preparing any cocktail weenies for the cameras:  read more »

Senator John McCain on the government's role in the unfolding foreclosure crisis:

"It is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers... Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates.”

The Bush administration's top economic people, including Treasury Secretary Henry Paulson, are expected today to propose new lending rules that are suppose to prevent a repeat of the current credit crisis, according to the Wall Street Journal.

Chief among the proposals will be those dealing with mortgage lenders and brokers. Mr. Paulson said that he would propose stronger federal and state oversight of mortgage brokers and lenders; and nationwide licensing for brokers.

The Wall Street Journal this morning goes to town on mortgage coverage. Absolutely none of it is good news for borrowers.

New data from NYU's Furman Center for Real Estate and Urban Policy shows (PDF) that the rate of new subprime mortgages in New York City declined from 2005 through 2006. The rate of subprime lending in the five boroughs dropped from 22.9 percent of conventional mortgages issued by subprime lenders to 19.8 percent in 2006.

But here's the bad news in two parts:

First, this annual decline wasn't as sharp as in other big cities, like Boston, Los Angeles and Chicago. (Washington, D.C., saw an increase.)

Second, the highest rates of subprime lending in the city are in poorer neighborhoods like East Flatbush, Brownsville, East New York and Bedford-Stuyvesant.

In fact, Manhattan continued to have virtually no subprime mortgages in 2006. The Observer earlier this year explained why the borough usually doesn't.

First he loses his TV show. Now this.

Crain's reports this morning (subscription required) that Trump Mortgage, launched with much fanfare in several states less than two years ago, has gone out of business. It wasn't the Donald's fault, however.  read more »

A Wall Street Journal piece this morning asks the increasingly relevant question: Is my mortgage broker really working for me?

New Yorkers, especially, should be asking that. State Attorney General Andrew Cuomo earlier this month subpoenaed information from Manhattan appraiser Mitchell Maxwell & Jackson and from mortgage broker Manhattan Mortgage Company, one of the city's top originators of mortgages. Mr. Cuomo's office then, shortly after these initial subpoenaes, extended its dragnet to include the real-estate appraisal unit of First American Corp., another appraiser that does work in the city.

The information sought? Whether or not mortgage brokers have been pressuring appraisers to inflate or otherwise change property values.

In a city where such values have jumped this decade, the pressure is understandably on for every side of a home sale--buyer, seller, broker, mortgage broker, bank. Each side has vested financial interests in a closed deal, and buyers who trust their mortgage brokers to work for them (rather than realizing up front that the mortgage broker works for him or herself) engage in a fickle lunacy.

"The mortgage broker does not represent the borrower," one mortgage broker in Colorado told the Journal. "We sell access to money."

Borrower, beware, indeed.