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After a welcome weekend respite from the market's turbulence, investors will quickly learn in the coming week whether Friday's Fed-induced rally was just short-term relief or something more sustainable. Much of that may depend on whether the Fed's move Friday to slice the rate charged at its discount lending window was enough to loosen the noose around normal lending operations around the world. The credit markets remain the lynchpin for any sustained stock market recovery. "We are certainly not out of the woods yet," says Mike Malone, trading analyst at Cowen & Co. "The markets will remain volatile ... until...

Fed declares "downside risks" to economy have increased, OKs half percentage point cut in discount rate on loans to banks. (Breaking

Many homebuyers in recent years took out exotic mortgages that ultimately backfired. This raises the question of why such booby-trapped financing was available at all. Fisher Investments Charles Schwab TD AMERITRADE Options House Zecco.com Fidelity Investments The answer, in part, stems from overaggressive marketing of what were once niche products intended only for the most financially sophisticated and creditworthy customers. During the housing boom in recent years, banks began offering such elaborate loans to huge numbers of average homebuyers, allowing them to get in over their heads and contributing to the current mortgage crisis, as many borrowers ended up defaulting....

Stocks extend slide on Countrywide news By JOE BEL BRUNO, AP Business Writer 20 minutes ago Stocks fell sharply Thursday after a move by Countrywide Financial Corp. confirmed fears of widening problems with some mortgages and tighter access to credit. A sell-off overseas offered Wall Street little reason to try to stanch the bleeding a day after the Dow Jones industrial average closed below the 13,000 mark for the first time since April and the Standard & Poor's 500 index moved into negative territory for the year. Investors' confidence took a drubbing Wednesday on concerns about potential trouble at Countrywide,...

NEW YORK (CNNMoney.com) -- The price of a typical home in the United States continues to drop but at a slower pace, according to a new survey. During the second quarter, the median single-family home price was $223,800, 1.5 percent less than a year ago, according to the National Association of Realtors (NAR). It was the fourth consecutive quarter of price declines. Condo prices rose 1 percent to a median of $226,800. Despite the continued drop, NAR's senior economist, Lawrence Yun called the results, "encouraging." "Although home prices are relatively flat, more metro areas are showing price gains with general...

NEW YORK (Reuters) -- Shares of Countrywide Financial Corp. dropped as much as 19 percent Wednesday on market rumors the mortgage company has been unable to raise money from the commercial paper market. Countrywide officials were not immediately available for comment. "People are buying Countrywide puts very aggressively on Wednesday off of rumors that the commercial paper market could be closed to them," said William Lefkowitz, options strategist at brokerage firm vFinance Investments. Puts are options that allow an investor to sell a stock at a preset price by a certain date. Another trader attributed the drop in the stock...

1. VMware IPO Debut Dazzles 2. Thornburg Postpones Dividend 3. Top 10 Potential Takeover Targets 4. The Top Buffett Value Stocks 5. The House That Won't Sell: Walk Away? Fidelity Investments E*TRADE FINANCIAL TD AMERITRADE Options House Zecco.com Charles Schwab The run on Countrywide (CFC - Cramer's Take - Stockpickr - Rating) stock intensified Thursday morning after the struggling mortgage lender said it drew down its $11.5 billion unsecured bank credit line. The Calabasas, Calif., lender said it made the move as it "supplemented its funding liquidity position." The announcement came just a day after Merrill Lynch cut its rating...

Stocks dropped sharply in Asia and sold off in Europe as well as the U.S. credit crunch continues to worry investors. 1. VMware IPO Debut Dazzles 2. Thornburg Postpones Dividend 3. Top 10 Potential Takeover Targets 4. The Top Buffett Value Stocks 5. The House That Won't Sell: Walk Away? TD AMERITRADE Charles Schwab Zecco.com Fidelity Investments E*TRADE FINANCIAL Options House Japan's Nikkei dropped 2% and Hong Kong's Hang Seng gave up 3.3%, and those were some of the smaller drops. Stocks dropped 6.9% in Seoul, 5.9% in Jakarta, 4.6% in Taipei and 4.3% in Mumbai. Even China's highflying Shanghai...

NEW YORK (CNNMoney.com) -- Housing starts and permits both fell to the lowest levels in more than a decade, as the latest reading on the battered housing and home building markets both came in below expectations Thursday. Housing starts fell to an annual rate of 1.38 million in July from a revised 1.47 million rate in June. Economists surveyed by Briefing.com had forecast starts would fall to a 1.41 million pace in June. Housing starts and permits are at the lowest level in more than a decade. The latest reading is the lowest level of starts since January 1997. Building...

NEW YORK (CNNMoney.com) -- Builders' confidence in the new home market fell to a 16-year low, according to a trade group survey conducted this month which reports buyers' problems finding financing spreading beyond the subprime sector. The National Association of Home Builders/Wells Fargo Housing Market Index fell two more points to a reading of 22, the lowest level since January 1991, when the nation was struggling with a recession, an energy price shock and the start of the first Gulf War. Any reading below 50 indicates more builders view sales conditions as poor than as good. The index's various components...

Turmoil in the U.S. home-mortgage market is starting to pinch even buyers of high-end homes with good credit records, in the latest sign of rising anxiety among lenders and investors. This surge in rates on so-called jumbo loans is particularly notable because rates on 10-year Treasury bonds have been falling. Normally, mortgage rates move in tandem with Treasurys, but market jitters have caused investors to ditch mortgage securities. Meanwhile, American Home Mortgage Investment Corp. finally succumbed yesterday to the mortgage-sector chaos that had crippled it in recent weeks and filed for protection from creditors under Chapter 11 of U.S. bankruptcy...

Hundreds of Georgians lost their homes Tuesday. The houses, taken from debt-laden homeowners, were sold to bidders on courthouse steps statewide. The increasingly busy monthly auctions show that not all of the residential market is in decline. Foreclosures are rising. More than 115,000 properties across the country were in the foreclosure process in October — up 42 percent from the same month a year earlier, according to RealtyTrac, a California company that tracks foreclosures. Foreclosures in Georgia are up a stunning 99 percent in the past year...

Prices remain the story in home sales, with Sarasota-Bradenton prices falling 18 percent in October, the second biggest drop in the state. The median sales price in the Sarasota-Bradenton market was $277,900 last month, compared with $340,700 during the same month in booming 2005. The Charlotte County-North Port market was not far behind, with a drop of 17 percent, from $243,900 to $202,800. Only Fort Myers-Cape Coral took a bigger fall, posting a 44 percent decline in median sales price, from $445,100 to $249,200, the Florida Association of Realtors reported on Tuesday. The median is the point where half the...

It seems like every month, I'm running into people passing out a slick new business card that announces them as a real estate agent or mortgage broker. Who wouldn't want to get a piece of the action? On certain Portland streets, housing prices are doubling in a matter of months. And when there's this kind of temptation to make quick money, greed can't be far behind.Insiders call it land flipping. Silent second. Straw buyers. Foreclosure fraud. Equity skimming. Air loans. If there's a thought to do it, there's a scheme attached to it."It's the fastest-growing white collar crime in the...

As rates creep up, borrowers with interest-only loans face sharply higher mortgage payments: Tina Gren Clarence saves $600 a month with an interest-only loan she took out about a year ago for a Petaluma home, yet already is considering heading off the financial hit when her monthly payments could jump. And Peter Shidler, whose low-payment-option loan could turn from a sweet deal into a potentially bitter one, is refinancing and still will pay $500 more monthly on his Santa Rosa home. Gren Clarence and Shidler, like two out of three Sonoma County home buyers and owners, joined the fast-growing club...

NEW YORK (CNNMoney.com) -- The number of homes entering into some stage of foreclosure is surging, according to a survey released Wednesday. In August, 115,292 properties entered into foreclosure, according to RealtyTrac, an online marketplace for foreclosure sales. That was 24 percent above the level in July and 53 percent higher than a year earlier. Where foreclosures are jumping Year over year gain in homes in foreclosure. Click for more stats on each state. Nevada: Up 255% California: Up 160% Florida: Up 62% It was the second highest monthly foreclosure total of the year; in February, 117,151 properties entered foreclosure....

With millions of adjustable-rate mortgages about to reset this fall, experts expect a wave of foreclosures by Americans in every income bracket. Here's why they could soar in late 2006 and beyond: Those easy-mortgage chickens are coming home to roost. This fall the adjustable-rate mortgages (ARMs) that millions of Americans took out during the recent housing boom will be reset, and many homeowners will see their monthly mortgage payments shoot up by as much as 20%. According to the Mortgage Bankers Association, of all mortgages financed in 2005, 36% were ARMs -- the highest ever. This is a matter of...

The economy's growth has never before been so driven by real estate. Now that engine is sputtering. Jiany Massad isn't quite ready to throw in the towel on his fledgling career as a Miami real-estate tycoon. But if the local housing market continues to head south, the 30-year-old real-estate broker is already making alternate plans. "I might restart my old business," he says of a home decorating company that specialized in high-end window treatments. "At least it's real-estate-related." With home sales down by nearly a third in Florida last quarter, thousands of those who hoped to cash in on the...

Millions of Americans bought into the real estate boom with adjustable mortgages and home equity loans. Now rising interest rates are forcing them into agonizing financial choices. Aug. 8, 2006 - When Shawn Howell saw the house in the summer of 2004, he thought he couldn’t lose. The location-close to family and in an upscale subdivision in Louisville, Ky.,—was perfect; the three-bedroom plus loft was just right. The price was a little high at $217,000—especially as Howell's wife, Niki, had just given birth to their second child. But the couple learned they could purchase it with no money down by...

NEW YORK -- Home prices in some parts of the country are falling. Builders are scaling back. Bubble or not, the biggest housing boom in recent U.S. history is coming to an end. Now here is the big question: How bad will the aftermath be? At this point, most economists expect a "soft landing," a gradual decline that won't derail the nation's economic expansion, now in its fifth year. But there is a good chance they are being too optimistic. The boom has depended heavily on the upbeat psychology of consumers, builders and lenders. As moods swing, the landing could...