US fed will inject $200 billion in cash in an effort to end the credit crunch

The United States Federal Reserve have announced that they will give a $200 billion dollar cash injection to ease the tensions in the credit market that are threatening to stall the wider US economy. They will buy mortgage backed security in return for cash and that will hopefully free up the credit markets and lending. Does that mean the Fed is taking on the risk the banks created? In a nutshell, yes, it does mean that, they are going to accept mortgage backed bonds from banks that were finding it hard to raise cash through the normal channels. So these institutions are not good enough for the market but they’ll do for the Fed.

The banks and financial institutions have taken a beating due to the credit crunch but it seems now that the fed is willing to stand up and be hit on behalf of the banks, so its like a guy who steps in to break up a fight and he turns out to be …

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Michael Lynn’s house to go on sale today.

The home of Michael Lynn the ‘disgraced’ Solicitor is to go on sale today. The interesting thing is that if you rip off the banks you are ‘disgraced’ if you rip off the Public you are a ‘Taoiseach’ or something along those lines. Any auctions coming soon in Drumcondra? I think not.

In a post several months back I did a piece that said ‘You can’t catch me, I’m the Lynngerbread Man’ and thus far it has proven true, sightings of Michael Lynn are becoming almost as popular as sightings of Elvis and the Lough Ness Monster, Michael if you are reading this drop me an email, I’d love to chew the cud with you for an hour or two. Anyways, his house is going to be sold today, I almost want to place a bid on the place just to say I put a bid on the house once owned by our countries greatest ever con-man, rephrase: our countries greatest ever non-governmental con-man.

An article on breakingnews.ie states …

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Michael Lynn's house to go on sale today.

The home of Michael Lynn the ‘disgraced’ Solicitor is to go on sale today. The interesting thing is that if you rip off the banks you are ‘disgraced’ if you rip off the Public you are a ‘Taoiseach’ or something along those lines. Any auctions coming soon in Drumcondra? I think not.

In a post several months back I did a piece that said ‘You can’t catch me, I’m the Lynngerbread Man’ and thus far it has proven true, sightings of Michael Lynn are becoming almost as popular as sightings of Elvis and the Lough Ness Monster, Michael if you are reading this drop me an email, I’d love to chew the cud with you for an hour or two. Anyways, his house is going to be sold today, I almost want to place a bid on the place just to say I put a bid on the house once owned by our countries greatest ever con-man, rephrase: our countries greatest ever non-governmental con-man.

An article on breakingnews.ie states …

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Missed mortgage payment? bad debt? How a bad debt caused a crisis

That’s whats behind the worldwide sub-prime crisis, millions of people missing payments, albeit on loans that may have been mis-advised or even extortionate but it doesn’t gloss over the fact that one guy in Ohio who decides he’s not going to pay his mortgage any more is not an isolated event when its correlated with all the other homes in the state who also decided to do the same. When you put all of these loans together (this is a simplified view just to make the point) then the Bank of ‘Wherever’ will suffer because of it.

Eventually the securitization process will start to feel the pressure, securitisation is where banks take all of their loans and then they put them into a ‘book’ of loans. So (I’m going to do this blog in layman-speak) basically all of the pages that are mortgages are put together into a folder, this is called a ‘mortgage book’ and then a thing called ‘gap maturity’ is worked out by risk analysts and this will tell you how much cash flow you can expect …

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Oil Hostages & European oil dependence

Oil prices are at record highs, not record highs for the last year or decade, but ever. And what we are starting to see now is a realisation by countriees with oil that they hold the cards that in the past they never had, they were at the table and holding a royal flush but didn’t know how to play the game. Up until recently the flow of oil was largely influenced by the USA and the EU but that seems to be diminishing quickly as Arab Nations and Russia grow into the big oil boots they have had for so long but failed to notice.

Here’s a question: Is Russia’s Gazprom, a state sponsored strong arm? They have been holding the Ukraine to ransom lately by denying them oil. Don’t forget: the Japanese went to war with the USA for the same reason 60 years ago, natural resources are unfortunately geographically bound in a very global world. Cutting a nations gas supply during the winter – …

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Oil Hostages & European oil dependence

Oil prices are at record highs, not record highs for the last year or decade, but ever. And what we are starting to see now is a realisation by countriees with oil that they hold the cards that in the past they never had, they were at the table and holding a royal flush but didn’t know how to play the game. Up until recently the flow of oil was largely influenced by the USA and the EU but that seems to be diminishing quickly as Arab Nations and Russia grow into the big oil boots they have had for so long but failed to notice.

Here’s a question: Is Russia’s Gazprom, a state sponsored strong arm? They have been holding the Ukraine to ransom lately by denying them oil. Don’t forget: the Japanese went to war with the USA for the same reason 60 years ago, natural resources are unfortunately geographically bound in a very global world. Cutting a nations gas supply during the winter – …

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To buy or not to buy, that is the question.

I have a problem, and its kind of a big deal to me. You see, I have a vested interest in the property market in the respect that I am a mortgage broker, so if clients ask me ‘should I buy now’ and I tell them ‘no’ – which is what I have been doing in some cases for quite a while – then in turn it affects my livelihood.

estate agents are pulling a perpetual aceThe bigger issue is that other folks with a vested interest don’t seem to be doing the same, at every turn they interpret events as a ‘buying opportunity’, so the market is going up? Go buy, there is capital appreciation to be had. Its falling? Go buy, there is value out there. It seems every card dealt to the market is an Ace.

When is not a time to buy? Well… that’s the purpose of today’s post, I will do my best to spell it out for a two segments of the Irish property market namely: investors, first time buyers. Investors: I will start …

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Stepstone Mortgages, Another Irish Sub Prime lender bites the bullet.

When IIB launched their sub-prime lender ‘Stepstone’ the plan was for them to be the inverse of what The Monkeys sang about, they would be your ‘stepping stone’ towards financial stability, they looked specifically at clients who were recently self employed and therefore wouldn’t have 3 years of accounts, people who wanted to refinance who may have had arrears, and other standard specialist lending clients.

Now Stepstonehave joined the slowly (but disturbing) list of Irish Banks to close their doors for business. This means that the Irish financial industry will have to face up to the reality of unsteady world money markets in an ever more local perspective, it’s no longer happening ‘over there in the US’ or ‘across the water’ anywhere else, its up close and personal, especially for the people who were made redundant this week. I feel bad for them, they all did a great job and they were certainly not behind the decision to close up shop, it will also decrease competition in the industry as the number of …

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Online Mortgage, how to get a mortgage online or over the internet

We did an article on the 21st of February about online mortgages, this is just a very brief follow up because we got a few mails about it.

So far we don’t know of any brokerage or lender offering a purely 100% online mortgage, there is a good deal of work that can be done via the Internet but there is not a fully Internet based solution out there right now. By an online mortgage the assumption is that there are no phone calls or emails or anything done that require interaction with another human being. An Irish mortgage online will be a reality at some stage in the future, and hopefully we will be the group pioneering them but currently because of money laundering requirements and the complexity of mortgages a mortgage online is not possible, at least in the sense described above.

What is the closest thing to mortgages online? At the moment sending in documentation and then talking to a human at some point is the nearest working solution. In an ideal world you could automate almost …

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100% Mortgages, how to get a 100% mortgage

100% Mortgages became quite popular in Ireland recently and up until the credit crunch they were proving to be the answer for many young buyers, the reason for requiring a 100% mortgage is normally because a person has been renting and paying off college debt etc. and for that reason they were not able to save up a deposit of 8-10% or more. Given that Irish property prices (at least in Dublin) were – and still are – above c. €350,000 it means you would have to save up the guts of €35,000, no easy feat even if you didn’t have college debt and lived at home.

The issue currently though is that the Irish property market is in a declining phase, so lenders have pulled back for the most part from 100% mortgages for the simple reason that they could be in a situation of inverse equity. When you get a mortgage normally you have at least some stake in the transaction, a down-payment or deposit and that portion ensures that you are committed to the transaction, call it …

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