Smart Borrower Blog

Archive for April, 2009

Small Business Owners: Government-Sponsored Loans Are Now Easier to Come By

Tough economic times mean lenders, of all varieties start tightening their belts. We’ve heard plenty of talk in the news about the struggles of current and potential homeowners to obtain new mortgage loans, but most other types of lending have also been severely reigned in as well. Small business loan funding, especially has been hard to come by. For those of you out there wondering what is going to happen to your business without a fresh infusion of cash soon, the federal government may have made it easier for you to get that much-needed money. Announced in February of this... more »

Obama Administration to Change Student Loan Program

Since 1965, the federal government has been subsidizing student loans made by private lenders.   President Obama has formally presented a plan that will do away with this. A great deal of the student loan industry is considered to be a racket that exploits college students.   Students have it driven into their heads that student loan debt is just a part of life.   Colleges have told students that this scenario is just the way that it is.   Many parents have suffered dearly getting the kiddies through college. Doing away with the private student loans subsidy program would... more »

Consider Consolidating Your Credit Card Debt

It has been said that consolidating your credit card debt is one of the smartest decisions you may make.   Credit card consolidation is a perfect choice for people looking to have better credit.   It is fairly common these days, and gives you the opportunity to combine debt and make a single payment instead of half a dozen. Ideally, the best reasons for consolidating debt are to get a better interest rate.   Any time you are able to consolidate debt and save yourself money, it is a step in the right direction. Financial advisers today have changed the... more »

Will Credit Card Legislation Really Make People Start Saving More?

Today the House has pushed forward legislation to credit a consumers’ credit card bill of rights, so to speak. The bill is apparently a response to cries from consumer advocacy groups about "unfair" practices by credit card companies. Some of the requirements of the proposed law seem helpful, but some of them seem like ridiculously over-legislating and interfering with the private sector. Here’s what sounds reasonable: The bill would require credit card companies to give their customers 45 days notice before increasing interest rates or changing other contract terms. It also calls for an end to "double cycle" billing, which... more »

Experts Warn OF Another Wave Of Foreclosures

With rising unemployment numbers, housing prices falling and inventory going up, industry experts are predicting that a second wave of the mortgage crisis is due to happen.   They predicted this new wave will be even more severe than the subprime mortgage crisis. Everyone is aware that the housing market is far from normal.   Stability will not happen in the market soon, because the great amount of inventory is causing home prices to drop and the job market is unstable.   I recently wrote on option ARM’s, and the problems this type of mortgaging brought to the market.  ... more »

Small Business Owners Under Fire

It is of particular interest to those that watch happenings in the mortgage market to see what happens when small-business owners get in difficulty.   In an article in the New York Times this morning, there was an article about a Chicago banker turned junk loan buyer.   The buyer, Rick Williamson, sees his role as that of someone helping to clean up bad debt that is clogging the economy.   Mr. Winston says “if you want to fix what is ailing this country, you need to destroy the worthless debt out there.   You have to shut down the... more »

Total Lending Down in February But TARP Banks Increasing Pace

According to a report from the Treasury Department released Wednesday, the number of loans being made by all residential, commercial and industrial property lenders dipped in February although banks and lenders receiving emergency government funds saw an increase in loan originations. Total lending dropped by a median 2 percent in February, with the Treasury reporting that in the commercial real estate market, “New loan demand remained low due to the lack of new construction activity." The Treasury added in its statement that   “uncertain economic conditions have resulted in borrowers reducing expenses, paying down debt, and delaying capital expenditure.” Basically,... more »

One State’s Mortgage Miseries

Maryland is a state that has seen its share of hard time from the fallout in the mortgage market.   Those mortgages in question are the infamous option arm loan.   This was one of those “no money down too good to be true” loans that had extremely attractive interest rates, and put thousands of Maryland homeowners into foreclosure. These loans were so toxic that they put two banks out of business - IndyMac and World Savings. It has caused so much trouble in Maryland that 800 Maryland lawyers have volunteered to help homeowners as part of the state’s foreclosure... more »

FTC Fights the Latest Wave of Scammers

Create a conflict, and the scam wizards come out of the woodwork.   Ever the opportunist, they prey on people in trouble, taking advantage of the fact that the person is distressed and confused. Now we see that the FTC has uncovered yet another shady business deal.   Mortgage modification and bankruptcy prevention services are popping up all over the country.   They target consumers whose home is endangered, and used deceptive marketing strategies that aligns them with nonprofit or government organizations. The approach people with their services, and demand an upfront payment for these services.   This can be... more »

Mortgage Delinquencies Up 50 Percent in Past Year

Recent data from one of the major U.S. credit bureau shows that mortgage delinquencies continue to rise, suggesting that the troubled national housing market has not yet bottomed out. According to Dann Adams, president of U.S. Information Systems for Equifax Inc, during February 2009, 7 percent of all U.S. mortgage loans were delinquent by at least 30 days or more, representing a 50 percent jump from the same time last year. Among subprime or poor credit home loans, 39.8 percent of borrowers were delinquent by 30 days or more, up significantly from 23.7 percent in February 2008. “I’m trying to... more »