Smart Borrower Blog

Archive for June, 2008

What The New President Faces

A report by Bloomberg states that 3 million homes now face foreclosure in the U.S.   U.S. lawmakers aren’t expected to complete work on a bill until after the July 4 recess.   This leaves a lot of people in a lurch, but we all know how slowly the wheels of Washington turn.   President Bush has said he will not veto what lawmakers come up with, with a few provisions. The legislation would help some borrowers refinance into more stable 30-year fixed-rate loans backed by the government.   The new legislation would help about 400,000 borrowers if they can... more »

California Steps Backward

The general consensus amongst mortgage market insiders it that the whole mortgage mess begin in the 1980’s when the industry was deregulated.   Anyone that could throw up a store front and put together a few thousand were suddenly in the mortgage business.   Being a creative sort, and nowhere near as conservative as most bankers, they begin to put together what at the time sounded like fantastic deals.   It was - for them.   I believe it lead to what is going on today, or is at least a giant share of it. Now, of course, the Fed... more »

Michigan Bites The Bullet

Current legislation in Michigan at his time could make it very hard for both consumers and lending institutions if they pass the legislature.   Michigan has been hard hit by the mortgage market fiasco, and the state of the economy is such that even graduating college kids run for the border as soon as they have diploma in hand. New legislation is tough on everyone involved because it wishes to do away with subprime lending altogether, leaving a lot of struggling families out of luck.   Consumer advocates are unwilling to make any compromise on what they wish done -... more »

Shareholders Take A Beating

The many different facets of the mortgage market never fail to amaze me at times.   I read a lot of things about this market to stay in touch with what is going on, and the more I dig, the more worrisome it gets. We must remember that it isn’t just Mr. Average Joe that suffers from this whole fiasco.   Shareholders get the same shaft as everyone else.   There is now way to tweak it up, either.   It is reminiscent of “all the king’s horses, all the king’s men” in this market, and it is no way... more »

The Demise Of The Ownership Society

It appears that the ownership society of America has silently slipped down the tubes.   Mentioned by President George W. Bush in a speech February 20, 2003 in Kennesaw, Georgia, it grew full blown in 2005, with specific policy proposals concerning medicine, education and savings.   Brought on by a tax cut proposal by Bush,   it was built heavily on the administration efforts of Margaret Thatcher.   Today, there is not the ghost of a chance that this will ever see the light of day. Recent figures I researched on the number of Americans going the OTHER way show... more »

Looking For Someone To Blame

It is now old news that two Bear Stearns executives have been arrested and face a myriad of charges from conspiracy, securities fraud to wire fraud.   Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin were charged on Thursday, and Cioffi was also charged with insider trading. The fund managers administered the two hedge funds that supposedly was a low-risk strategy, backed by a pool of debt securities such as mortgages.   The funds went ballistic in the summer of 2007 resulting in some 1.4 billion dollars in losses to investors.   Allegedly, the two told investors in... more »

Fannie And Freddie Strike Again

Just when I thought that people were beginning to make sense of it all, and working to clean up the mortgage mess, I read an article in the Austin American Statesman that completely blows me away. What have we learned from this current state of the market?   For one thing, that people should not be buying homes with no money down, and then getting a piggyback loan to do the close.   This to me was one of the most basic problems - that people were getting into homes that they couldn’t afford, had no money down, and needed... more »

Friends Of Angelo?

I found an article very interesting today concerning the mortgage market that I just have to share.   As many of you are aware, James Johnson, head of Senator Barack Obama’s vice-presidential selection committee, stepped down this past week because of conflict of interest in business dealings.   What I hadn’t heard it that it involved dealings with our own dear Angelo Mozilo of Countrywide.   Ah, the plot thickens… It seems that when Senator Kent Conrad of North Dakota wanted a mortgage for his beach house, he went to Johnson, who hooked him up with Mozilo.   Mozilo, good... more »

Latest Market Stats

If you believe that the mortgage companies and all concerned are making any kind of dent in the current crisis, then I have some ocean front property in New Mexico you may be interested in.   My research today shows that mortgage foreclosures are up almost 50% from where they were a year ago, with no end currently in sight.   It is my belief that no one person or entity is to blame for our current situation.   My only REAL concern is how we manage to pull ourselves out of it. Hope Now, the Bush administration backed coalition... more »

Sobering Stats On Ohio

No one needs to be told about the mortgage market, and how shaky things still are.   Hard hit states such as California, Nevada and Florida make the evening news, but we don’t often hear much about the hardest hit state of them all - Ohio.   Ohio is in deep trouble, not only having a high rate of foreclosure and default, but also losing a lot of jobs.   I guess Ohio has never been a rah-rah state, but it is a part of this nation of ours, and worth a look at. I took a visit to the... more »