Markets & Economy

The good news in finance this week was not what you might think

Few consumers will even notice changes in mortgage rules

Financial markets have stopped their hysterics for now, so let’s get some other things straight. Things about mortgage and other credit. Simple things. FDR’s first fireside chat in 1933 was devoted to simple explanations of banking. The next day Will Rogers said the president’s words were so simple that "even the bankers understood." This week, Mel Watt, the new head of the FHFA, conservator of Fannie and Freddie, announced a preliminary effort to restore 97 percent loans, and to ease Fannie and Freddie's demands for buyback of defaulted loans. That same day six federal agencies relaxed Dodd-Frank mortgage skin-in-game 5 percent retention, and dropped mandatory 20 percent down payments for some loans. Given headlines, you’d have thought something big happened. NAR yelled, “Dramatic Easing of Mortgage Standards.” The Economist snarled back, “Structurally Unsound,” joined by The Wall Street Journal and The New York Times, “Here-we-go-Bubble-again.” ...