Smart Borrower Blog

Archive for December, 2008

New Record Foreclosures in 3rd Quarter

A new record was set in third quarter, with mortgage delinquencies up 6.99% from the previous quarter to 6.41% of all loans outstanding.   As the economy recedes, these numbers can only go higher.   With record number of job losses, companies closing their door, and even The Big Three begging at Washington’s doors, it is no surprise that we see this happening.   Without work and only unemployment benefits to sustain them, the average citizen will be lucky to keep food on the table, let alone make a mortgage payment.   There appears to be no sign right now... more »

30 Year Mortgage Rates Hit A 27 Year Low

We are seeing mortgage rates on 30 year fixed mortgages dropping, and this week they hit 5.53%, the largest drop in one week in 27 years.   These rates were reported Thursday by Freddie Mac.   The rates are down from 5.97% from last week.     The lowest we have seen them was on January 24th, when they stood at 5.48%. We may see further cuts, if the government decides to launch a plan to lower the rate on a 30-year mortgage to 4.5 percent.   They would accomplish this by spending hundreds of billions to buy mortgage-backed securities... more »

Mortgage Demand Up 112.1 Percent As Interest Rates Fall

The  volume of U.S. mortgage applications shot up dramatically in the latest week as borrowers sought to take advantage of low interest rates, according to the Mortgage Bankers Association Wednesday. “Many borrowers missed an opportunity to take advantage when rates dropped sharply for a brief period when the GSEs were placed under conservatorship,” said Orawin Velz, associate vice president of economic forecasting for the MBA. GSE stand for government-sponsored enterprises, meaning mortgage companies like Freddie Mac and Fannie Mae. "When rates plummeted following the Fed’s announcement that it would buy GSE debt and MBS [mortgage-backed securities], many of those on... more »

A Resistance To Change

It was bound to happen.   Sooner or later, an investor would question the validity of the mortgage bailouts for people who are in default on their mortgage.   Now we see an investor, William Frey, filing a lawsuit in New York State Supreme Court alleging that the proposed modification of some 400,000 home loans originally underwritten by the defunct lender Countrywide Financial is illegal.   Allegedly, the lawsuit, which is a class action, states that Countrywide and Bank of America have no legal standing in which to modify these loans to make them affordable.   The lawsuit further alleges... more »