This paints a dark picture for those hoping that the fed interest rate cuts would stem a decline in the housing market Citigroup to Pare Mortgage Holdings by $45 Billion
Citigroup Inc., the fourth-largest U.S. home lender by new loan volume, plans to pare its U.S. residential unit's mortgage and home-equity holdings by about $45 billion, or 20 percent, over the next year.
...
Paring back mortgage holdings may help reduce Citigroup's capital needs by $4 billion to $6 billion
Plain and simple this is a sign that this staple of the American banking system is under dire pressure to ensure its survival. Combining these comments with rumors the other day that middle east investors are concerned for the bank's survival and the overall situation in the credit market, makes it seem like it will be quite some time before normal conditions return to the mortgage markets putting even more pressure on an already declining system.
This is unfortunate and sad news for homeowners looking to refinance or for those hoping to buy a home as contractions in the supply of capital will only make a dark situation worse.
Let's hope that this is enough to stave off disaster rather than the usual sign of worse things yet to come.
No comments:
Post a Comment