NEW YORK–(BUSINESS WIRE)–Lerach Coughlin Stoia Geller Rudman & Robbins LLP (“Lerach Coughlin”) (http://www.lerachlaw.com/cases/americanhome/) today announced that a class action lawsuit has been commenced in the United States District Court for the Eastern District of New York on behalf of purchasers of the securities of American Home Mortgage Investment Corp. (“American Home Mortgage” or the “Company”) (NYSE:AHM) between July 26, 2006 and July 27, 2007, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934 (the “Exchange Act”).

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"Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years." ~ Warren Buffett

As we all know (or at least should know), the United States economy became imbalanced in the late-1990s as too much speculative capital surged into the Internet and Telecom sectors of the economy. As this speculative boom expanded, rising asset prices allowed the boom to move into the broader economy. Throughout the late-’90s, speculative funds and increased leverage played a primary role in the expansion of credit throughout the economy. If someone wanted cash and had a semi-viable story as to how he would pay it back, he could procure a loan or venture funds quite easily. This process played out throughout the economy, as consumers, businesses and every level of government piled into debt in order to finance projects for current consumption, with little or no concern given to having to pay it off. Our fiat monetary system, with limitless fractional reserve banking made possible by low reserve requirements and a general lack of prudence by our questionable Federal Reserve establishment, played a significant role in creating the initial imbalance.

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Posted by Brian R Barnes

WASHINGTON (Reuters) — Mortgage finance company Freddie Mac will no longer buy subprime mortgages that have a "high likelihood" of payment shock and foreclosure, the company announced Tuesday.

Freddie Mac has a public mission to promote home ownership and "some of these products" that fueled a five-year housing boom "don’t work going forward", Richard Syron, Freddie Mac’s CEO, said in an appearance on CNBC television.
  
Freddie Mac will invest only in mortgages that assume a borrower can make the highest possible mortgage payments and will introduce new products to help troubled mortgage borrowers, Syron said.

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There are only two economic reports worth watching this week that are likely to affect mortgage rates. Both of them are scheduled for release the same day, meaning we may see a relatively calm week for mortgage rates. The financial markets are closed tomorrow in observance of the President’s Day Holiday and will reopen Tuesday morning. You may find some lenders to be open for business tomorrow, but I would not expect to see new rates issued until Tuesday.

Wednesday morning brings us all of this week’s relevant news and data. The Labor Department will release January’s Consumer Price Index (CPI) at 8:30 AM ET, which measures inflationary pressures at the very important consumer level of the economy. With exception to maybe the Employment report, the CPI is the most important report that we see each month. Its results can have a huge impact on the financial markets, especially long-term securities such as mortgage-related bonds. It is expected to show a 0.1% increase in the overall index and a 0.2% rise in the more important core data. If we see weaker than expected readings, bond prices should rise and mortgage rates would likely fall.

The second and final relevant economic data of the week is the Leading Economic Indicators (LEI) for January. This Conference Board report attempts to predict economic activity over th e next three to six months. It is expected to show a 0.2% rise, meaning that economic activity may rise in the near future. A smaller than expected increase would be good news for the bond market and mortgage rates.

Also, Wednesday afternoon brings us the release of the minutes from the last FOMC meeting. Traders will be looking for any indication of the Fed’s next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading.

Overall, the most important day of the week is obviously Wednesday with the release of all of the week’s relevant news. The rest of the week will likely be fairly quiet, keeping mortgage near Wednesday’s afternoon levels. The recent bond rally has me concerned that traders may sell some holdings to capture the profits from the run in prices. We may see some selling ahead of Wednesday’s data while some traders may wait until after Wednesday’s news. I believe that favora ble news is already built into current bond prices. Accordingly, I have shifted to a lock recommendation for immediate and short-term periods.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

a la mode