Smart Borrower Blog

Archive for August, 2007

Bush To Reveal Plan To Relieve The Mortgage Market

With over 100 mortgage lenders out of business, and hedge funds, pension funds and many investors expected to lose more than $100 billion, Washington has finally decided to step in and help bail out the economy. President Bush, in his first response to the sub-prime crisis, is expected to reveal his plan today to help the Americans with credit problems meet the rising costs of home loans. Bush’s Plan President Bush will propose that the Federal Housing Authority (FHA), a branch of the Department of Housing & Urban Development(HUD), will make changes to its policies and allow an additional 80,000... more »

From the Editor: Seeking Contributors

I’m seeking additional contributors to the Mortgage Mentor, particularly those with intimate knowledge of the mortgage, real estate or lending industries. The vision is to have some nice synergy between contributors in order to provide readers with a ‘behind-the-scenes' peek at the industry. What's the incentive? Bloggers receive exposure for their own services through a bio on the contributors' page. Interested to contribute? Please submit a comment to discuss your interest and areas of expertise. ... more »

Economists Predict Median Home Price Drop

For the first time ever, forecasters are predicting that the median price of homes in the US will drop. This will be the first time since federal housing agencies began keeping statistics in 1950. This phenomenon has been seen in California and the Northeast, but is the first time this has been foreseen in cities like Chicago, Minneapolis and Houston, where the increases of the last decade were modest by comparison. This reversal is particularly interesting because many government officials and housing-industry executives had said that a nationwide decline would never happen. Prices have fallen in some coastal areas as... more »

Asian Markets Troubled By Sub-Prime Fiasco

Asia’s three central banks are showing signs of trouble from the sub-prime debacle here in the US. Shares in Singapore’s DBS Group Holdings (DBSM.SI), (author’s note: no quote available) state-controlled Bank of China (3988.HK) and its Hong Kong subsidiary, BOC Hong Kong (2388.HK), all took a beating after they revealed a combined exposure to the U.S. sub-prime mortgage market of almost $13 billion. It indicates that the Asian banks, thought to be more suspect in financial woes, have been more vulnerable than most investors think. Stock markets from Sydney to Seoul fell in response to this news, causing Asia to... more »

Protect Your Earnest Money with a Mortgage Contingency

My colleague, Morgan Brown wrote a great post on how to keep your loan from disappearing. The follow up to his great advice is to also ensure you have a mortgage contingency in your real estate purchase contract just in case your loan actually does disappear and you find yourself without financing. While real estate contracts may look simple being only a page or two in length you must recognize that these contracts are legally binding. Once you agree to buy a home, (by virtue of executing the contract,) you cannot just decide to walk away because you had a... more »

Keep your home loan from disappearing in to thin air

Over the past week and a half I have personally seen more than a dozen home loans vanish in to thin air.   Changes to underwriting guidelines, increases in interest rates, and the caving of lender after lender have left numerous loans high and dry like little orphan Annie.   Unfortunately in this story a Daddy Warbucks has yet to be identified.   If you are in the middle of securing home financing there are several things that you can do right now to help expedite the funding of your loan.   Take the initiative to finalize your loan before... more »

Market Indicators Foretold Credit Woes

James Melcher, founder of Balestra Capital, is a man to watch. Over a year ago, he saw the market as dangerous, and worried about the trade and budget deficits, the housing boom, and high credit card debt. With $100 million in assets at his hedge fund, Balestra Capital, he was in a position to do something about it. He hedged his bets, foreseeing the troubles in the housing market, and today is on top of his game. What were his indicators? Quoting an article in the New York Times: ” As far back as 2001, advocates for low-income homeowners... more »

The Trouble With The Market Today

Because it is my job to report the news on the blog, I have spent the day culling the resources I have to find something a bit positive to put in place today. It has been interesting sorting through all the mess that the sub-prime lenders have gotten the market into, and a real revelation besides. It has become very understandable to me why we are now in this market position. Thoughts From the Front Line I am certainly not a financial wizard. You surely don’t want to throw money at anything I say! I have a lot of interest... more »

Housing Building Permits Plunge

With all the fuss in the market about credit and sub-prime loans, the fallout is trickling down to other levels of the market. Builders are becoming a bit cautious about new construction. The rate of building permits issued dropped last month to their lowest points in more than a decade. The housing market was already in a state of decline from a year ago. Statistics for new permits show that in all sectors of the country, rate of new construction is falling. With credit tightening up and people that a year ago wouldn’t have any problem getting a loan, construction... more »

If you have a loan with Countrywide…

With all of the news coverage surrounding the uncertainty of Countrywide Home Loans’ future I have received a lot of panicked calls from home owners worried about their loans with the gigantic mortgage lender.   Many homeowners are asking if their loan can be called due, and who to make their mortgage payment to in case of a collapse by the company. If anything happens to Countrywide (and that is still a pretty large if) you will not have your loan called due; and you should continue making your mortgage payment to Countrywide just as you have been every month.... more »