Big Banks Increasing Spread on Mortgage Profits, Not Funneling Cheaper Rates to Customers

By: Wednesday September 19, 2012 9:33 am

Banks are making more off mortgages than ever before, refusing to pass on lowered interest rates from federal policy, including the purchase of trillions in mortgage-backed securities by the Federal Reserve, to consumers. This isn’t really the enigma that the New York Times’ Dealbook makes it out to be. It’s simple collusion. Nobody offers 2.8% mortgage rates, so nobody gets them. As a result, the spread that banks capture on their mortgages widens.

 

Assessing the Impact of QE3

By: Friday September 14, 2012 4:00 pm

Stocks have leveled off after yesterday’s boost from the Federal Reserve’s resumption of quantitative easing, this time in a more modest but open-ended capacity.

Most analysts take for granted that this new QE3 will work, in fact, better than the first two rounds despite its smaller footprint. That stems from the use of the expectations channel, and the Fed communicating that they will continue to take steps at monetary easing even after the recovery takes hold and the labor market improves. This represents a kind of admission of guilt on the part of Ben Bernanke, whose Jackson Hole speech was full of defenses of his prior view of the monetary situation. Basically, Bernanke said “we didn’t do enough, we’re changing course.”

SUPPORT FIREDOGLAKE
Follow Firedoglake
TODAY’S TOP POSTS
CSM Ads advertisement
Advertisement
Upcoming FDL Book Salons

Saturday, August 30, 2014
2:00 pm Pacific
The Nixon Defense: What He Knew and When He Knew It
Chat with John Dean about his new book.

Sunday, August 31, 2014
2:00 pm Pacific
Imagine: Living In A Socialist USA
Chat with Pau LeBlanc, Debby Smith, and Michael Steven Smith about their new book. Hosted by Deena Stryker

GET UPDATES

Sign up to receive Firedoglake's headlines by email: