WASHINGTON (Reuters) – As many as 30 million homeowners would be able to refinance their mortgage at record low interest rates regardless of their income, credit history or loan-to-value ratio under a plan to be unveiled on Tuesday by a Democratic lawmaker.
The legislation would allow for blanket 30-year, fixed-rate mortgages at the prevailing market rate, now around 4.3 percent, for anyone seeking to refinance a government-backed loan, Representative Dennis Cardoza told Reuters on Tuesday.
The plan would help a wide swath of borrowers and is much more comprehensive than the narrowly targeted efforts President Barack Obama has tried to date.
(Reporting by Corbett B. Daly; Editing by Neil Stempleman)
BERLIN – The huge rescue fund that saved the euro this year should not be extended beyond 2013, German Chancellor Angela Merkel said Tuesday, as she called instead for tougher consequences for overspending by member states in the currency bloc.
Merkel's comments came as haggling over changes to the rules that underpin the euro heats up. On Wednesday, EU Monetary Affairs Commissioner Olli Rehn plans to issue a proposal for member states to be punished early for spending their way into trouble.
Germany has led the push for tougher rules to prevent a repeat of the debt crisis that started in Greece and then rippled across Europe.
That forced governments and the International Monetary Fund to put together a euro750 billion ($1 trillion) safety net for indebted governments, euro440 billion of that from European countries. The fund can issue bailouts until June 2013.
"I say here very clearly that there will not be an extension of the aid fund, rather we need treaty changes in Europe," Merkel said at a German industry group's conference in Berlin.
Those changes should "make clear that countries which do not keep to the stability and growth pact can be subjected to different procedures than the ones we have today," she said.
She did not elaborate, but added that "with Germany, there will not be a simple extension of such (rescue) funds as we now have."
Rehn said last week that, once it has gathered experience with the current rescue fund, the European Commission may next year come up with proposals for "what kind of a permanent mechanism for crisis resolution we should build" when the facility expires.
Under the European Union's stability and growth pact, governments are supposed to keep their budget deficits to a maximum 3 percent of gross domestic product.
On Monday, France rejected any idea of punishing EU nations with near-automatic sanctions if they fail to keep their debt and budget deficits within limits — putting Paris at odds with Germany and the European Central Bank.
Rehn insisted sanctions decisions could only be undone by a large majority of member states — but France insists that a simple majority should suffice to decide on sanctions.
Merkel said Tuesday she had been right to insist that countries put their budgets in order as a condition for this year's rescue packages.
"Europe must take great care that the countries which show weaknesses today become stronger," she said.
NEW YORK (Reuters) – September consumer confidence sagged to its lowest levels since February, driven by deteriorating labor market and business conditions, according to a private report released on Tuesday.
The Conference Board, an industry group, said its index of consumer attitudes fell to 48.5 in September from a revised 53.2 in August.
"September's pull-back in confidence was due to less favorable business and labor market conditions, coupled with a more pessimistic short-term outlook," said Lynn Franco, director of The Conference Board Consumer Research Center.
After the report's release, safe haven Treasury debt prices securities gained, with the 30-year bond rising more than a point in price. The dollar and stocks extended losses.
"Overall, consumers' confidence in the state of the economy remains quite grim," Franco said.
The median of forecasts from analysts polled by Reuters was for a main September reading of 52.5. Forecasts ranged from 48.0 to 55.0.
The August reading was revised down slightly from an original 53.5.
Consumers' labor market assessment worsened. The "jobs hard to get" index rose to 46.1 from 45.5, while the "jobs plentiful" index decreased to 3.8 from 4.0.
Inflation expectations eased slightly, even after the Federal Reserve has said it is ready to take action to keep yields down in an effort to stimulate growth. Consumers' oneyear inflation expectations edged down to 4.9 percent from 5.0 percent the previous month.
The expectations index slipped to 65.4 from 72.0 last month.
The present situation index slipped to 23.1 from 24.9 in August.
(Reporting by John Parry and Wanfeng Zhou; Editing by Chizu Nomiyama)