Smart Borrower Blog

Archive for January, 2010

Freddie CEO Defends His Company’s Existence

After Congressman Barney Frank suggested recently that government-sponsored entities Freddie Mac and Fannie Mae should be “abolished,” Freddie’s CEO took a stand listing off the reasons his company needs to remain in business. During a speech at the Detroit Economic Club on Tuesday, Freddie’s chief executive Charles “Ed” Haldeman Jr. said he would like to remind policymakers that Freddie and Fannie have helped to make the 30-year fixed rate mortgage possible. He also said that they have provided the most liquidity to the mortgage market, as they were the source of roughly 75 percent of all liquidity in 2009. Haldeman... more »

Obama Announcing Initiative to Ease Student Loan Burden

With the economy in shambles and unemployment all over the country at an all-time high, college grads, especially recent ones, are struggling to pay back their student loans. For those struggling, there is some good news. Help may be on the way. Obama is expected to announce at the State of the Union Address new initiatives to help the struggling middle class. College graduates who have student loans would be one of the benefactors of his plan. Currently, recent graduates spend 15 percent of their disposable income just to pay their federal student loans each month. Payments on some loans... more »

Government May Nationalize Student Loans

There is a new bill being kicked around in Congress that would essentially exterminate the private student loan industry, paving the way for the government to make all loans directly to college students. It’s called the Student Aid and Fiscal Responsibility Act and it calls for the elimination of the Federal Family Education Loan (FFEL) program that has created millions of dollars of subsidized student loans each year. Here’s how subsidized loans work: The government encourages lenders to loan money to students at low rates by promising to make up any profit losses or to repay the money if a... more »

Something Fishy – Bankers Love Credit Card Regulations

The Federal Reserve has released new rules limiting the power of credit card companies to abuse consumers. Among these are the following: Credit card companies may not issue cards to anyone under age 21 unless the applicant has a cosigner or can prove that he/she has the means to make required payments. Card issuers must send out bills at least 21 days before they are due. Card rates may not be increased during the first year of the contract, unless the original card offer included a low introductory rate (and the introductory rate must last at least 6 months now).... more »

Is the Auto Lending Industry on the Mend?

Buyers with poor credit are still being priced out of the auto loan market, but with the help of government money, the car loan industry is seeing some signs of life. The Associated Press says that car and light truck sales for December are expected to have reached about 1 million, the highest sales figure since August’s Cash for Clunkers boom. Total sales for the year, however, will likely be around 10 million, the lowest number in 30 years. Another positive sign is that lenders created 5.5 percent more car loans in the third quarter of 2009 than the previous... more »