Smart Borrower Blog

Archive for January, 2008

Hope Now Begins To Move Forward

 The government is moving forward with its plan to help the struggling mortgage market, with such banks as Citigroup, Countrywide Financial, Washington Mutual and Wells Fargo offering to help people facing foreclosure.   Hope Now, the government entity, is creating a “Mortgage Rate Freeze” program to help those who struggle. The Pros & Cons This is well and good, but you have to wonder why this might help the overall economy.   Why?   Because the requirements for accessing the program effectively weeds out a lot of people that are struggling.   Requirements such as being current on payments,... more »

Sellers can Help Buyers with Mortgage

In today's somewhat slow housing market, sellers are wondering whether they will have to sit on their property forever before it sells. The answer is, you don't have to. A property will sell if it is priced at an attractive value to a buyer – and it will most likely sell quickly if you offer an incentive. After all, developers do it all the time. They are able to actually save money in the long run, because they do not have to hang onto finished, empty properties so long. Consider following their example. If you would like to get your... more »

Mortgage Crisis Does Not Imply You Shouldn’t Buy or Sell

I had an interesting email from the National Association of Realtors the other day. It reminded me that "all real estate is local." This is a point that all homeowners need to keep in mind. With the current market in turbulence, nobody is really sure what to do. The fact is that every market is unique, so don't depend on national trends to make your own decisions. There are still houses being sold—sales are just slower than before. Sellers If you are interested in selling your home, you won't find the jumping "hot" market that existed a couple of years... more »

Home Values Continue To Drop

You read it online. You see it on the evening news.   Fixed rate mortgages are at an all time low.   Yet, houses are not selling.   People are not refinancing.   I read in a comment today on a mortgage article that the mortgage lenders advising to get a mortgage now because of rates being so low is just “a hard sell.”   Let’s look at some facts. Value of Homes Values of homes are at a low now, with the median price dropping off considerable.   People cannot afford to sell a home that they have a... more »

New York Investigates Wall Street Banks

When you dig deeper and deeper into the sub prime crisis, you begin to see a pattern emerge.   Much of the crisis, it seems, stems from the fact that many people involved have withheld information and not been exactly truthful in their disclosures. So it is in New York, where investigators are curious to know why some Wall Street banks withheld or did not disclose vital investor information on packaged mortgages sold as securities.   New York attorney general Andrew M. Cuomo opened investigations last summer, and wants to know why these Wall Street banks did not disclose the... more »

BOA To Obtain Countrywide Corp

Countrywide, long hailed as the top leader in the mortgage industry, has taken the tumble like so many others before it.   Countrywide is being bought out by Bank of America, the nation’s top leading consumer bank.   This move makes BOA in a position to prove its strategy.   Because Countrywide is a losing proposition, BOA must be able to turn that around and see a profit in the future. BOA is gambling on the fact that the infrastructure of Countrywide is top end, and that its operating platform is one of the best in the business.   BOA... more »

Bankruptcy May not be Best Choice

It’s only been two years since the bankruptcy laws were changed to make it more difficult for people to file. the purpose of the change was to prevent irresponsible borrowing; the habit some had of using credit cards, maxing them out, then filing bankruptcy in order to wipe the debt clean. Prior to the changes, people could simply walk away and start over, leaving credit card companies and other creditors holding the bag. With the changes, would-be bankrupt families are required to obtain credit counseling, and in most cases they must consider filing chapter 13, in which they’re required to... more »

Private Mortgage Insurers In Trouble

Bloomberg reports that a recent study shows the number of US mortgages going into default has risen by 35%, a new record.   The report covers people who are at least 60 days late on mortgage payment, which is a warning sign of foreclosure.   Statistics gathered by the report shows that in November, those 60 days late on mortgage payments was 61,033, up from 45,325 a year ago. It places many of the top private mortgage insurers in a difficult position. This data comes from Mortgage Insurance Companies of America. It gives further evidence that the fallout from the... more »

Mortgage Applications Still Falling

Mortgage applications continue to fall, with the rate at its lowest level since July of 2006.   The current level is the lowest it has been in 4 years.   On the same front, refinancing has dropped to an all time low since December of 2006. This data, coming from the Mortgage Banker’s Association, is not surprising.   With the firestorm in the mortgage and sub prime market, people are not only afraid to take the chance on buying a home, but lenders are leery of anyone with less than impeccable credit scores.   Almost everyone has some issue with... more »

Subprime Lending Simply Filled a Niche

Most of the focus pertaining to the current condition of the housing market has been on subprime lenders. That’s because a few unscrupulous lenders took advantage of some borrowers. These lenders either didn’t explain the "fine print" to the borrowers, or created a bait-and-switch for borrowers who actually could have gotten a better rate with considerably less fess. These few lenders ruined the reputation of the entire subprime market. Subprime borrowers do not usually meet the "standard" in some way: credit, down payment ability, income, or type of job. Many self-employed individuals fall into the definition of a subprime borrower,... more »