Smart Borrower Blog

Archive for July, 2008

The New Legislation - Help Or Bailout?

The Senate took a weekend session to fruition this week and passed the new housing bill, which Bush has agreed to sign.   Although I see this as a sign that at least the government is recognizing the pickle homeowners are in, I have to ask myself who benefits the most from this legislation.   Supposedly, the government is willing to help 400,000 households pull out of the financial crisis they are in.   Well and good, but the last time I noticed, it was more like 1.5 million that were needy.    Current estimates tell us that 5.5 million... more »

The New Housing Legislation

NBC Nightly News reported tonight that the new housing legislation will go to the President's desk for signature on Monday, possibly Tuesday latest.   Bush has agreed to sign.   All it took to get this through was an all time low in consumer confidence, the worst housing market we have seen in decades, and a lot of people losing their homes before action was taken.   The News also reported 2 more banks have failed this week, and it is likely we will see more of this activity before the end of year. All this is well and good.... more »

Interest Rates On The Rise

I find it odd that with the economy the way it is, with Freddie and Fannie teetering, and the prices of homes dropping lower all that time, that interest rates are steadily increasing. I would like to think that interest rates would drop, but that is not the case. This certainly would help to jump start things, because people would be more apt to buy and able to afford housing. It makes common sense that interest rates being lower than where they stand right now at 6.297% would help to drive interest. I did a little research today, and tried... more »

New Initiatives Aid Struggling Borrowers

The mortgage industry has really suffered from “creative financing” but I ran across a system in place today I felt worth mentioning.     We now see two initiatives for people who have lost their homes, but are being allowed to stay in them to try to regain solvency and get back on track. One of these two, based in Detroit, is managed by HUD, and works with the FHA, which allows a lender to submit an insurance claim on a mortgage when it is in arrears but before it fails.   HUD in turn transfers the mortgage to a... more »

Why Are The Feds Overlooking Mortgage Brokers?

In a previous post I discussed the steps the Fed is taking to stop shoddy and unethical mortgage practices. I saw it as a good thing. I am troubled by the fact that the Fed isn't rolling it out until October 2009, and, because it was of interest, decided to dig further into the concept. Some feel that the Fed isn't taking this far enough in its stance, and others, such as the banking industry, feel it is sticking its nose in where it should have no right to go. This is all well and good – everyone is entitled,... more »

The Banks Are Bleeding

If you take a really good look at the way things are right now concerning banks, mortgages and bailouts, you see a whole lot of trouble on the horizon.   Freddie and Fannie are in the soup, and it would be no surprise to me that the government will step in to pull their collective butts out of the fire.    I spent time this AM working on research for tonight's post, looking at the banks that are in trouble and posting loss after loss.   It is not a pretty picture. Besides the troubles at Fannie and Freddie, we... more »

Fed To Curb Shady Lending Practices

It is no secret that the Fed is working to curb shady housing practices.   It has been talked about for a long time, yet we have seen nothing substantial materialize yet.   Now that the housing market is deeply depressed, it seems Washington is finally willing to lend an ear. From The Associated Press, here are the guidelines they expect to put in place: * restrict lenders from penalizing risky borrowers who             pay loans off early. * require lenders to ensure those borrowers set aside                ... more »

Fannie And Freddie In Free Fall

The NBC Nightly News tonight was all atwitter with the latest news about Fannie Mae and Freddie Mac, the lending giants that handle $5.1 trillion in loans and mortgages.   Backed by the Fed, the two giants are in free fall with over $11 billion in loss this year.   Senior Bush officials are looking to place the two in conservatorship if the bleeding continues.   There is no hope in sight that it won’t. Current worries are that these two giants will default on payment.   If that were to happen, the economy of this country goes in the... more »

The New President’s Legacy

Let’s face it - whoever wins the White House in November is gaining a legacy that will be hard for the toughest individual to face.   Although a President has many powers and authorities, he cannot change the fact that the foreclosure crisis and values of homes in the country of ours is going to magically change over night.   We know that any President does not have the direct ability to change mortgage rates by the stroke of a pen.     It simply cannot be turned around, until the market is ready to correct itself. Both presumptive candidates... more »

The Real Face Of Subprime?

I read with interest today about a woman living in Altoona, Pa. This woman, Vicki Miller, had bought her childhood home from her mother’s estate for $32K.   No matter how you look at it, $32K isn’t a whole lot of money these days.   Ms. Miller now is looking at her debt doubled; her once-significant equity has shrunk to zero. And she is now behind on payment.   She is being threatened by her lender for foreclosure as this is written. You have to wonder why a woman with a modest income could not manage the payments on a... more »