Smart Borrower Blog

Archive for April, 2009

Mortgage Rates Are Good If You Qualify

This is the time of year when people begin shopping for a home.   Interest rates have been dropping to recent lows, making it an ideal situation to refinance or to buy a home.   Even though these are good times to buy, if your credit is less than stellar, you are wasting your time. Things aren’t like they were two years ago.   Then, if you were breathing, you qualified for a loan.   Lenders did everything they could to get you into your dream home.     Now,   you really need to show you have income, back... more »

Loan Modifications Without Payment Reduction Results in High Re-Default Rates

"Loan modifications" have been the buzz words for both the Bush and Obama administrations when it comes to fixing the mortgage foreclosure crisis. And millions of struggling homeowners have received such loan modifications over the past year, but new studies show that the types of modifications being made were largely ineffective in keeping homeowners out of default. A report released Friday from the federal Office of the Comptroller of the Currency and the Office of Thrift Supervision, surveyed almost 35 million loans totaling roughly $6 trillion in collective value. The data showed that slightly more than 10 percent of all... more »

FASB Changes Bank Rule

On Thursday, an obscure accounting rule was changed to give banks more discretion in reporting the value of mortgage securities.   Supposedly, it would allow banks to report higher profits by assuming that the mortgage-backed securities in their portfolios are worth more than they actually are. The reasoning behind this appears to be banks feel that the mortgage-backed securities, which had taken a huge hit during the subprime mortgage crisis, should be reported for what the banks feel they are worth, not what investors are willing to pay for them. Critics of this move said that the rules were changed... more »