Smart Borrower Blog

Archive for November, 2010

Mortgage Rates Rise Slightly and Housing Market Sees No Improvement

Just two weeks ago, mortgage rates were at their lowest since the housing crisis began. For a 30-year fixed mortgage, rates bottomed out at 4.17%. Rates are creeping up ever so slightly and Freddie Mac is reporting current 30-year fixed rates to be at 4.4%. 15-year rates are also up slightly, coming in this week at 3.77%. Last week, these rates were at 3.76%; two weeks ago, 15-year rates hit rock bottom at 3.57%. Even though rates are up slightly, they are still historically low and the housing market has declined once again. Home purchases were down again for the... more »

For-Profit Colleges Blasted in Latest Report

Students at for-profit colleges may not be eligible for government grants and student loans in the future if the Obama Administration has its way. A new study from the Education Trust, a nonprofit research and advocate group, called “Subprime Opportunity: The Unfulfilled Promise of For-Profit Colleges and Universities,” claims that for-profit colleges are essentially like subprime mortgage lenders because they are “peddling access to the American dream but delivering little more than crippling debt.” Just like with subprime home loans, for-profit colleges seem to attract minorities and low-income students. The report found that 37 percent of all enrolled are minorities... more »

SBA Loans Are Available

SBA loans are loans that are made through a traditional lender but are partially guaranteed by the SBA (Small Business Administration). While some people might think that the SBA makes its own loans, this is simply not true. The SBA guarantees these loans, up to 90% of the loan value so that the lender does not take full culpability. Currently, funding for SBA loans is readily available, that is if you can get approved by a lender. Lenders across the country have tightened standards for loan underwriting, making it harder to qualify for a business loan of any kind. The... more »

Credit Card Delinquencies and Charge-Offs Continue to Show Improvement

Although the changes are still incremental, they are in the right direction. Delinquent credit card accounts decreased in October as did credit card company charge-offs for the most part. Charge-offs are the loans that card issuers basically give up on because the borrowers are highly unlikely to repay them. This means the card issuers take a loss on those accounts and move one. Delinquencies are often a good predictor of future charge-offs, so the fact that both of these moved downward last month is welcome news. “It’s nice to see that consumers feel more confident in at least being able... more »

Chase Top SBA Loan Lender

Chase just announced that they have more than doubled their SBA or Small Business Lending and will take over as the top SBA lender for the fiscal year. They topped the next lender by helping an additional 250 businesses receive an SBA loan in 2010. SBA loans are loans that are available for small businesses that might not otherwise be able to get the funding they need. They are distributed through private lenders like Chase, but a certain percentage of each loan is guaranteed through the Small Business Association. This allows lenders to be a bit less stringent on application... more »

Mortgage Lenders Beg for Exemptions

The Mortgage Bankers Association sent out a letter Tuesday to 8 different government departments urging/pleading with them to go easy on the new mortgage lending restrictions that will be put in place no later than spring of next year. The Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA) will require mortgage lenders to retain a 5 percent stake in all non-exempt loans that are sold off to investors. The idea was to ensure safer lending by giving lenders something to lose if loans sour. Obviously lenders are not crazy about the idea and now the MBO is pushing for... more »

Small Banks Are Closing Their Doors

Small banks across the country are being forced to shut their doors. This year alone over 140 small banks so far have closed up for good. While small banks at one time were the mainstream of America, today they are vanishing and someday may be a thing of the past. Just like many other small businesses, small banks have been unable to compete with the larger ones. Add to the competition a depressed economy and many small banks simply cannot survive. The recession has left small banks scrambling. While large banks throughout the country were able to get financial tax... more »

October Auto Sales Show Surprise Upswing

Having been hampered for many months by a down economy and limited lending credit for buyers, the auto industry has seen some hard times in 2010. Yet October’s U.S. car and truck sales figures boasted a 13.4 percent increase over last year, with 950,000 vehicles sold, the best showing in more than two years. At this rate the car industry is on track to sell about 12 million cars and trucks this year. “Pent-up industry demand is a big factor right now,” Truecar.com analyst Jesse Toprak said as quoted in a Marketwatch article. “Consumers are learning to live with economic... more »

Small Business Lending Increasing

According to new data from ThompsonReuters/PayNet, small business lending is on the rise. During the month of September lending was up 16% from last year at the same time. Additionally, these new figures put lending at the highest level seen in the last two years. The big question is whether or not these loans will help give the economy a boost. PayNet’s president and founder William Phelean, believes it will. “This doesn’t point to anything but a robust recovery,” said Phelan in an interview. “These small businesses are people who see the demand in the economy every day, and they... more »