Smart Borrower Blog

Archive for February, 2010

Obama Has New Housing Plan to Combat High Foreclosure Rates

The national foreclosure rate actually declined in the last quarter of 2009 to 9.47 percent, down from 9.64 percent in the third quarter, according to the latest data from the Mortgage Bankers Association. If you’re feeling optimistic, this may be a sign that things in the housing market are slowly starting to turn around. Yet a foreclosure rate close to 10 percent is hardly something to celebrate. Also, if you combine loans in foreclosure and those that are delinquent by at least one payment, that percentage shoots up to roughly 15 percent. And let’s not forget that another wave of... more »

SBA Stimulus Money Runs Out for a Second Time

Once again, the Small Business Association (SBA) is reporting that government funding has run out for two of their lending programs. Last year the government in an effort to help small businesses, and in hopes of simulating the downed economy, encouraged lenders that issue SBA loans to make more funding available to small businesses. Government funds were made available to reduce SBA loan fees and to offer a 90 percent guarantee to banks that made the loans. The original stimulus package of $375 million dollars ran out last November. Additional funding was then released to continue the program in... more »

Have We Reached the Bottom of Credit Card Delinquencies?

Things may very soon start looking up for American consumers. New data from the lending market shows that credit card delinquencies are leveling out as of January. Four of the six largest credit card lenders reported delinquency rates that barely moved last month while the other two actually had declining rates. Bank of America’s credit card delinquency rate, the percentage of borrowers that are 60 days or more late on their payments, fell to 7.35 percent in January from 7.44 percent in December. American Express said its delinquency rate dropped by 0.1 percent during the same period. Capital One saw... more »

Lobbyists Stop Student Loan Reform in its Tracks

Lobbyists this week marched on Washington, threatening an Obama administration bill that would overhaul the student loan industry. This effort could not come at a worse time for college students as well as colleges and universities throughout the country that were depending on the bill to help ease financial burden. College students across the country are graduating with an alarming high amount of debt. The average college student today graduates with around $23,000 in student loans, almost double that of a just a decade ago. During his presidential campaign, Obama pledged to help ease this burden, and this bill which... more »

FHA Increases Upfront Mortgage Insurance Premium for Buyers

If you’re looking for a house, and thinking about getting an FHA loan, you might want to apply before April 5, 2010. That’s the date the FHA is raising its upfront mortgage insurance premium (UFMIP) on all FHA loans and your FHA case number will have to be assigned before that date in order to qualify at today’s lower UFMIP rates. Actually, you’ll need to get in touch with a lender a few days before April 5th, as you’ll need an FHA case number assigned and that can take several days, depending on your lender. What is an FHA Loan?... more »

Big Banks Driving Some Consumers to Small Lenders

Big banks are still in business, no doubt about it. But according to a CNN article today, their practices may be starting to alienate a portion of their customers. In fact, a recent survey from the Forrester Research company found that the nation’s largest banks like Bank of America and JPMorgan Chase are “among the least trusted U.S. financial institutions.” That lack of trust may be pushing some people away, but I think the majority of those ditching the big banks are doing so for purely financial reasons. Fees seem to be continually rising while interest rates on savings accounts... more »

Credit Card Payments Now Trump Mortgage Payments

Time for mortgage lenders to totally rethink their business. A new survey from credit bureau TransUnion shows that the old rules and assumptions about the average American homeowner have been thrown out the window. The recent survey found that Americans, in record numbers, are now paying off their credit card bills before they try to keep up with their mortgage payments. This is a radical departure from the traditional financial thinking of most Americans. “Conventional wisdom has always been that, when faced with a financial crisis, consumers will pay their secured obligations first, specifically their mortgages,” said Sean Reardon, the... more »

Small Business Loans are Needed to Drive the U.S. Economy

Small businesses could play a major role in the recovery of our fallen economy, that is if they can get the funding they need to operate and expand. Small businesses tend to hire new employees, provide new ideas and often develop into large companies that are a force within the business world. The issue at hand is that so far small business lending has not been happening. While government officials, banks and economic experts all seem to agree that more funding needs to be available for small businesses, no one as of yet has come up with a funding... more »