Fed economist calls for mortgage-backed security by governent

According to a Reuters report, a U.S. Federal Reserve economist called for the creation of a new federal institution to backstop losses on asset-backed securities to prevent any future collapse of mortgage finance giants Fannie Mae and Freddie Mac.

The government had to take over the mortgage finance companies in 2008 as a devastating financial crisis worsened. The two had been shareholder owned, but their congressional charters and Treasury lines of credit lent their debt securities a status just short of U.S. Treasuries in the eyes of investors.

Fannie Mae and Freddie Mac, even under government control, play a major role in U.S. mortgage finance, and President Barack Obama has promised to propose early in 2010 how the companies should be structured in the future, Reuters reported.

Gov't gets tougher on mortgage industry

According to a report by the Associated Press, the Obama administration will spend the coming weeks cracking down on mortgage companies that aren't doing enough to help borrowers at risk of losing their homes, as the progress in its foreclosure-prevention effort goes very slow.

Treasury Department officials said Monday they will step up pressure on the 71 companies participating in the government's $75 billion effort to stem the foreclosure crisis. Mortgage providers must now submit details on how they would decide which loans would be permanently modified. Banks that fall short of their agreement could face fines or sanctions.

However, some mortgage companies say they have had trouble getting borrowers to return their documents so they can complete the changes. Nearly 60 percent of the 375,000 borrowers who qualify to have their loan modifications completed by year-end have either submitted incomplete paperwork or none at all, AP reports.

Credit score - what does it mean

Credit scores are being used for everything these days, including mortgages, credit cards, insurance, and even employment decisions. Credit scores are used to predict how well you're likely to use credit in the future by how well you have used it in the past.

Credit scores allow lenders to quickly make on-the-spot credit decisions based on a 3-digit number that sums up your credit worthiness.


Credit scores are measured in points. The higher the number of points you have, the better your credit score is. Credit scores allow lenders to quickly make on-the-spot credit decisions based on a 3-digit number that sums up your credit worthiness. There are many credit scoring models in use today; all are designed to rate your likelihood to repay your debts.

What's my credit score?

Credit score ratings are based on the information that's available in your credit report. Some auto and home insurance companies will accept or reject you based on your credit score.


Information that's not included in your credit report, like your income, isn't used to calculate your credit score.

Credit scores are fluid numbers that change as the elements in your credit report change. You need to stay up-to-date with your credit report and score.

There are many credit scoring models in use today; all are designed to rate your likelihood to repay your debts.

Credit scores do not take into account somebody's income, their assets, or their personality. They measure only what the credit bureaus have deemed factors important to predicting future creditworthiness.


Credit scores are calculated based on data in your credit reports and, as fluid numbers, change over time, sometimes on a daily basis! That's why it is so important to stay on top of your credit reports for changes that could affect your credit scores.

Credit scores typically range from about 300 to 850. Consumers with high credit scores are more likely to obtain lower interest rates and better terms on loans, including mortgages, and credit cards (higher credit scores can also result in lower insurance rates).

Credit score: what does it mean

There has been some change on new version of FICO score. You need know some important criteria of FICO 08 to keep your credit score from plummeting:

FICO 08 is sensitive to how much of your available credit you are using at any given time. If you are maxed out on a credit card, you're using 100percent of your available credit. That is bad. You never should use more than 30percent, even if you pay your
balance in full each month.

You should not close credit card accounts. If you were to close one, you would reduce the total amount of your available credit, which could seriously damage your credit score.

While it pains me to suggest such a thing, if you want an excellent credit score these days, then the accounts you have need to be active. That means using each one for a tiny purchase every month or so, followed by an immediate payment that brings it right back to $0.