You may not be surprised to hear that the Treasury is offering US debt for sale again next week: the Treasury is offering $37 billion in 3 year notes Aug 11, and the Treasury is also offering another $23 billion in 10 year notes as well on Aug 12, and the Treasury is also offering another $15 billion in 30 year bonds available Aug 13. The Treasury is offering $75 billion in US Debt next week though some had expected the government to offer $77 billion.

The Treasury department of the government has offered record amounts of debt for sale in recent months in an effort to fund the huge budget deficit and continue the economic rescue efforts.

The treasury sold a record $200 billion in short term debt just last month, and the Treasury expects to reach $12.1 trillion debt ceiling by the fourth quarter. The Treasury Secretary Matt Rutherford says they will see that the debt ceiling is raised so they can continue to borrow once the ceiling is reached.

With the huge amounts of US debt and the growing deficit, it is very likely that investors like China will start asking for higher rates for lending us the money thus making it harder to fund our governments needs. The government says the amount of borrowing will be enough to fund current financial needs, yet the amount of debt sold will continue to rise in the short term to meet future needs.

The Treasury is happy with the demand for US debt and says the demand both locally and nationally is strong. The question is how long can we keep borrowing and maintain financial stability, how can we be financially strong and economically sound when the debt and deficit are growing so rapidly.

Once again with the huge amount of government spending, and the amount of debt the Treasury is selling or a regular basis “Precious Metals” are a very good place to invest as they are stable and strong and not tied to the value of the dollar which is some what unstable.

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You may have read some of my previous post showing precious metals are a very good and safe investment and that has clearly not changed, as gold hits two month high and gold futures rose for fourth session. The central banks are said to sell the lowest amount of gold in 15 years as the dollar is still on ten month low.

Financial news from London stated that the Central Bank Agreement states they will sell approximately 140 metric tons of gold this year, this is the lowest level of gold sales by the Central Bank since 1994. The news from Europe also stated a dramatic drop in the supply of scrap gold from the previous quarter by 40% from the 350 metric tons the previous quarter. The price of gold is high for a number of reasons ranging from the weak dollar, this has been a poor year for gold sales as they are at a 15 year low, combined with the greatly reduced supply of scrap gold. The purchases of gold are down tremendously from a year ago, 73% as a matter of fact to 39 metric tons for the first half the year of 2009.

Precious metals are a good investment in any economy as I have stated before, and an even better investment in unsure economic times like these. So be sure to balance your investment portfolio and buy into precious metals to help you reach your personal and economic goals.

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According to the Treasury Department Bank of America and Wells Fargo were the worst among the big banks for doing mortgage modifications for struggling home owners.

The Treasury Department states that Bank of America has to date only worked on 4% of eligible loan modifications or 27,985, and Wells Fargo has only worked on 6% of eligible loan modifications to date. The government program to aid with the home mortgage crisis, Making Home Affordable program started in March, yet Bank of America and Wells Fargo are slow out of the gate to help their customers with failing mortgages. However JPMorgan Chase and Company has help 20% of their customers with failing mortgages, and Citigroup Inc has helped 15% of their customers with failing mortgages to looking to refinancing their homes under the Making Home Affordable program started in March.

The Treasury Secretary Michael Barr, says some of the financial institutions should have and could have done more to help their customers with their troubled mortgages so far and we expect more from them in the future.

The government is currently working with around 235,000 or the targeted 4 million of those with troubled mortgages. The director of the Economic Council Lawrence Summers said the report showing the performance of the banking institutions is to make clear who is helping the troubled mortgage customers and helping to achieve the goal of the governments anti-foreclosure program.

The larger lenders like Bank of America and Wells Fargo have many more troubled mortgages to deal with and it will certainly take more effort than some of the smaller lending institutions, but none the less it needs to be done to help the customers and the country to stabilize the mortgage crisis.

The Making Home Affordable program started in March and has $75 billion available for loan modification, and the goal is to have at least 500,000 trial modifications in place by Nov 1 according to President Obama.

According to David Sisko the head of default management services for Deloitte and Touch, many companies can’t handle the volume of loans being demanded by the government program. According to David Sisko normally lending institutions handle 50-100 home loans a month and the government is asking then to do is to handle 200-300 home loans a month. You would think with the high unemployment rate and the amount of money at stake the banks could find people to process the additional loans and meet the governments request. Some of the smaller banks are managing to get the job done for example: California Based Wescom Central Credit Union has done 28%, Morgan Stanleys / Saxon Mortgage has done 25%, Aurora Loan Services has done 21%, and GMAC has done 20%. You would think if the small banks could get the job done, the large banks could follow suit and do the same when the stability of the country is at stake.

To be eligible for the program the house must be owner occupied and at least 60 days past due, and either in foreclosure or bankruptcy. The house and mortgage in question also must conform to Fannie Mae and Freddie Mac loan limits, some of which are as high as $730,000 in some areas, and the loan must have been started before 2009. The government program Making Home Affordable program demands banks that were given federal aid from the Treasury, or who took Troubled Asset Relief Program known as TARP funds as well as mortgage companies Fannie Mae and Freddie Mac to help borrowers in imminent risk of defaulting on their loans. Some of the ways the lending institutions are supposed to help are by lowering payments to borrowers, lengthen terms on loans, lower interest rates, and to forbear outstanding principal, among other methods. It seems the banks were happy to take the TARP monies, but are not in as big a hurry to help the troubled mortgage customers. The loan modifications are understandably hard to do, but none the less we have to take the time as the economic strength and future of the country are at stake.

Bank of America and Citigroup received about $45 billion in TARP, and only took $25 billion. Likely the TARP funds that Bank of America received made it easier to pay the billions to the Merrill Lynch Top executives as part of the merger that the SEC investigated. Yet Bank of America can’t find the time to get the needed mortgages processed to meet the governments goals.

A group of loan service companies met with President Obama on July 28 and said they will step up the pace of the loan modifications and work to keep homeowners from sliding into foreclosure whenever possible, according to the Treasury. The large banks are saying they have ramped up and are attempting to tackle the huge task of modifying all the troubled mortgages, though the demand and task are great. Top banking industry officers are blaming government rules for the loan modifications being done so slowly, and Senate Banking Committee Chairman Christopher Dodd assailed sluggish results on administration from anti foreclosure programs as well.

The number of homes either in default or seized through June in 6 months according to California based Realty Trac was 1.5 million. Clearly we have a huge problem with the number of troubled mortgages, and need to step up the pace to remedy the situation.

Some say the mortgage market is turning around, but warn it took a long time to create the financial situation we are in and it will take a long time to get through it as well. I think we need to consider that the loose regulations of lending institutions lead to the number of troubled mortgages, and the banks need to be pushed to work harder to fix the mess they help make. The banks and lending institutions were happy to make money on the mortgages and ride the wave of money on all the shaky loans that are now coming back to bite them. They need to be made to meet the government set goals to help turn around the financial mess that they help create for the good of the country and our economy.

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