FDIC suggest Americans need to save more.

That’s all good, but I was thinking about this during the open houses I held this weekend.


On the one hand you have the Fannie and Freddie who’s lending guidelines still allow DTIs (Debt to Income ratios) up to 45% . That means 45% of a household’s gross income can go toward housing payments, and then you have President Obmam’s loan modification plan which says if your DTi is greater than 31% you might qualify for a loan modification. Obviously, you can see the quagmire. Fannie and Freddie (two government agencies) are continuing to be aggressive in their underwriting standards, to support the housing market, but as soon as the loan are originated they are considered unaffordable according to the Obama’s loan mod program and good be modified as a result. That’s nuts!!!


Let’s do the right thing.





From: FDIC Subscriptions [mailto:subscriptions@fdic.gov]
Sent: Monday, February 22, 2010 2:20 PM
Subject: FDIC Subscriptions Press Releases Update


Press Release

FDIC Calls Upon Consumers to Save and Build Wealth
America Saves Week is February 21-28

February 22, 2010

Media Contact:
Greg Hernandez (202) 898-6984
Cell: (202) 340-4922
Email: ghernandez@fdic.gov

The Federal Deposit Insurance Corporation (FDIC) is calling upon consumers across the nation during America Saves Week to consider establishing a basic savings account or boosting existing savings. FDIC Chairman Sheila Bair said, "One fundamental lesson of the financial crisis is that savings can help families withstand sudden changes in their economic well being. Establishing a savings account in a federally insured institution is a great first step to build wealth and begin a savings habit that will last a lifetime."

The personal savings rate rose to 4.6 percent in 2009 from 2.7 percent in 2008, according to the U.S. Department of Commerce. "I am pleased to see that people are saving more of their hard-earned money and building wealth. Having personal savings for an emergency fund or saving for a future expenditure, such as a college education, can make a big difference in avoiding other costly alternatives. I've always been a big advocate of a back-to-basics approach to financial services; it's my hope that Americans' increase in savings is the beginning of a long-term trend," Bair said.

"Money saved by consumers also provides a stable source of funding for investments in the economy that benefit all Americans," said Bair. "In fact, a country with robust savings generally has more capital to fund investments and support economic growth over the long-term. As demonstrated recently, it is harmful to an economy when consumers spend beyond their means, financed by debt that they cannot afford to repay."

To learn more about America Saves Week and about savings-related resources from the FDIC, please visit http://www.fdic.gov/deposit/deposits/savings.html.

# # #

Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation's banking system. The FDIC insures deposits at the nation's 8,099 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars – insured financial institutions fund its operations.

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