The S&P just downgraded a host of Alt-A securities. These are mainly mortgage backed securities that include subprime mortgages. Because of how behind the mortgage market is, about $41 billion in mortgage backed securities have been downgraded.

Alt-A loans

Alt-A loans are those that we often consider subprime mortgages. Due to credit requirements, those that get Alt-A loans don’t qualify for prime mortgage rates, and therefore pay a higher interest rate.

Mortgage rates could see some movement this week with all the economic data set to be released. Tomorrow, the Fed is expected to cut interest rates another 25 basis points. While this may not directly affect traditional fixed-rate first mortgages, second mortgages could be affected, along with ARMs.

Additionally, there will be inflation numbers released on Thursday and jobs data released on Friday. All of this information will provide a snapshot of the economy and possible affect mortgage rates this week.

Mortgage rates could see some movement this week with all the economic data set to be released. Tomorrow, the Fed is expected to cut interest rates another 25 basis points. While this may not directly affect traditional fixed-rate first mortgages, second mortgages could be affected, along with ARMs.

Additionally, there will be inflation numbers released on Thursday and jobs data released on Friday. All of this information will provide a snapshot of the economy and possible affect mortgage rates this week.

One of the Big Items of news lately has been the incidence of almost-daily record high oil prices. And today oil prices did the same thing as an oil pipeline shutdown in the North Sea threatens to put further strain on already strained prices.

In practical terms, though, household finances are being affected by oil prices as well. Not only are gas prices going up (forcing changes to family transportation budgets), but transport costs of food are going up as well. Between "economic stimulus" measures and gas prices, food prices inflation is also becoming an issue in household finances.

So, what will you do with your tax rebate? The first checks are supposed to be out today. The government may have originally wanted you to go on a spending spree, but that is probably no longer an option for most people.

Okay. I couldn’t resist. Enjoy this explanation of a capitalism. Widgets are also involved.

Happy Friday!

Okay. I couldn’t resist. Enjoy this explanation of a capitalism. Widgets are also involved.

Happy Friday!

Despite assurances by some that the global credit crisis is coming to a close, there are still concerns about the economy. And here in the US, there are worries that the fallout is just beginning. Foreclosure forecasts by Credit Suisse are right in line with that worry.

Credit Suisse predicts that there will be 6.5 million foreclosures in the US through 2012. However, the bank does think that this year (2008) will be the peak year, and that 6.5 million number includes the 1.2 million homes already in some stage of foreclosure.

Earlier this month, Fed chair Ben Bernanke testified before Congress about the state of the US economy. He mentioned that it is likely to have problems, especially the housing market, but that he expects things to start turning around by the end of 2008 or early 2009.

This, however, does not square with general trends in house prices. Down cycles in housing generally last 5-7 years, and some think that house prices could decline as much as 30% in the relatively near future.

Prosper Lending polled US consumers in the run-up to Earth Day regarding environmental attitudes. The poll found that 91 percent cared about conserving natural resources, but 75 percent factor cost into the fact that they are slow to implement solutions in terms of home improvement.

One thing that may help is the green mortgage. This product is still being offered by some lenders for home improvements, and also for first-time homebuyers that want an energy efficient home. And don’t forget that there are state and federal tax breaks for going green with your home improvement projects.

One of the big pieces of news that has to do with the fallout from the subprime mortgage market crash is that the Bank of England just introduced its own bailout plan for banks in trouble.

It just goes to show that the US isn’t the only country struggling with housing market problems right now. Indeed, the British housing market is down. And it doesn’t help that many British borrowers had subprime loans.

Not only that, but many of the banks having problems due to the subprime mortgage market crash  are banks that had invested in US subprime mortgage-backed securities. Double whammy.

At any rate, many in Britain are as unsure about how helpful the BOE plan will be, just as there is skepticism over Federal Reserve efforts here.