Smart Borrower Blog

Archive for February, 2009

Country Shows Strong Reaction To The Bailout Plan

You don’t need to look any further than the trading floor of the NYSE to see people’s reactions to the proposed mortgage bailout.   This week CNBC reporter Rick Santelli went on a rant, wanting to know why people who pay their bills on time need to help bail out people that don’t.   It is a common reaction all over the country. I think the plan has good intentions.   There are people that are deserving of help.   However in my opinion, there are a great many that don’t.   I’m not saying it’s their entire fault.  ... more »

Geithner Reveals Obama Bailout Plan

The Obama administration laid out its new bailout plan Tuesday, projecting a total cost of $1.5 trillion to $2 trillion, including the second half of the original $700 billion bailout program funding. U.S. Treasury Secretary Timothy Geithner held a press conference, giving out details of the Financial Stability Plan and defending the high price tag. “As costly as this effort may be, we know that the cost of a complete collapse of our financial system would be incalculable for families, for businesses and for our nation,” he said. “We will make mistakes. We will go through periods in which things... more »

Blacks & Hispanics Are Led Down The Garden Path

Image by bobster1985 via Flickr Here is a real legacy for you.   During the Bush administration, minority Americans lost up to $213 billion in wealth during the eight years that Bush was in office.   It was attributed to the so-called subprime mortgage crisis.   The Boston-based social advocacy organization United for a Fair Economy recently released this study. The report, entitled Foreclosure Date of the Dream, focused on the fact that many Blacks and Hispanics were put in this situation due to predatory lending in which the buyers were stuck with loan terms and increasing costs that they... more »

Refinancing May Not Be As Easy As You Think

Thirty year mortgages are continuing to hover around the 5% mark.   This keeps interest in refinancing high.   Even though many homeowners want to trade in their adjustable rate mortgages for fixed-rate loans or combine first and second mortgages to bring the payments down, we find that this is not always doable. There are a lot of reasons why refinancing isn’t the best deal for a lot of homeowners.   We see declining property values, record job loss, reduced income and legislative bodies that can’t make their mind up on what they want to do. The reason so many... more »

Low Rates Spur Major Refinancing, But Not Home Buying

The demand for mortgage money shot up in the latest week, led heavily by an increase in refinance requests, according to the Mortgage Bankers Association Wednesday. The MBA’ weekly Market Composite Index, a measure of the number mortgage applications filed, grew by 8.6 percent in the week ended January 30, 2009, to 795.4 on a seasonally adjusted basis from 732.1 the previous week. By far, the majority of the applications during the last week were for refinance loans rather than home purchase loans. The refinance share of all applications rose to 73.2 percent from 72.8   percent the week before.... more »

The Problem With Option ARM Mortgages

Little is discussed about the option adjustable-rate mortgage.   This creative mortgage option hit it s peak during the housing boom.   It offered a lot of creative options for people with little options.   Prospective buyers were given four ways to pay back these loans, most of them involving low initial outlays that would reset at much higher monthly amounts at a future date.   Thirty billion are due to reset this year and $67 billion in 2010, giving rise to more fears of trauma in the housing sector.   The average option ARM monthly payment will soar 63... more »