A recent press release from HUD stated:

“From September 2007 to February 2008, FHA insured 100,000 refinanced mortgages. As more homeowners continued to learn about the benefits of FHA’s traditional 30-year fixed, prime-rate financing, FHA-backed another 100,000 loans in half the time.”

The FHASecure program will soon allow eligible borrowers with subprime loans to refinance into FHASecure mortgage loans as well.

What are your thoughts on the FHASecure program? Is this just a bandaid for today’s mortgage crisis
or is it a long term solution to helping homeowners and families?

The first whiff of Wells Fargo’s home equity woes surfaced last month when the bank reported it lost $153 million on the portfolio in the third quarter, up from $27 million at the same last year.

Wells Fargo’s chief executive, John Stumpf, spooked investors even further two weeks ago when he described the current real estate slump as the worst since the Great Depression and reiterated earlier projections that the bank’s home equity losses would continue to rise next year.

Given that so many other banks had disclosed plans to write off huge losses in the fourth quarter, Wells Fargo might have decided it was an opportune time to clean its financial house too, Morford said.

Of course, the news could have been worse. The losses are still much less than those experienced by fellow lenders. The company expects more write-offs as the months progress and the mortgage crisis deepens.

The gains came after a speech from Bernanke on housing and monetary policy in Jackson Hole, Wyo., and remarks from President Bush encouraging the use of Federal Housing Administration insurance.

In his speech, Bush noted that the subprime crisis is relatively modest compared with the entire U.S. economy, but he urged mortgage holders to refinance if they become delinquent on adjustable-rate loans.

The president, however, emphasized that it is not the government’s position to provide a wholesale bailout to all borrowers. He also promised to penalize predatory lenders.

Both Bush and Bernanke made it clear that they don’t plan on bailing anyone out over their financial decisions, but that they are at least sympathetic to the idea of lending a hand to people who need it most in the form of interest rate cuts and a chance to re-finance.

“Consequently, we will pay particularly close attention to the timeliest indicators, as well as information gleaned from our business and banking contacts around the country,” he said. “Inevitably, the uncertainty surrounding the outlook will be greater than normal, presenting a challenge to policymakers to manage the risks to their growth and price stability objectives.”

From Bernanke’s comments, it’s fair to say that no one is sure exactly what moves to expect next from the Fed. Most investors hope for an easing of interest rates, but Bernanke’s decision will be based on the most current data he possesses. All in all, the interest rate decision still remains a mystery.