Smart Borrower Blog

Archive for February, 2012

FHFA Shows Little Sign of Allowing Mortgage Principal Write-downs

The Federal Housing Finance Agency, the regulator for mortgage giants Fannie Mae and Freddie Mac, does not seem interested in taking up the Obama Administration up on its proposal to allow the two companies to write-down loan balances for struggling homeowners. In a hearing Tuesday before U.S. senators, FHFA acting director Edward DeMarco continued to stick to his guns that principal write-downs are not “in the best interest of the companies.” Fannie and Freddie currently back about 60 percent of all existing mortgages and 75 percent of all new mortgages and have been under government conservatorship since the fall of... more »

Small Businesses Look to Unconventional Sources for Funding

Since the financial crisis several years ago, small businesses have had a tough time securing funding for their operations as banks have upped their lending standards and pulled back from investment. While there are some signs that major banks are starting to open up their lending spigots slightly for small businesses, the credit and collateral requirements remain difficult for many owners to meet. Where many U.S. small firms used to be concentrated in the manufacturing industry with plenty of land and equipment to put up as collateral, the small business arena has now largely shifted to the service industry without... more »

Auto Market Shows Signs of Looser Lending

The U.S. auto loan market is definitely reviving after hitting a low point back in 2008 with the financial collapse. While credit all but dried up at that time, banks have since shown much more interest in funding auto loans with banks even starting to compete against each other for business. “Banks have had to look elsewhere for growth opportunities, and auto has been one of the nice spaces over the last couple years,” Curt Beaudouin, a bank analyst for Moody’s Investors Service in New York, said in a phone interview with Bloomberg . “The credit experience in terms of... more »

Credit Card Use Jumped in December

U.S. consumers pulled out their plastic in greater numbers for purchases in December, according to information from the Federal Reserve Tuesday. Total credit debt increased substantially as well. Revolving credit, such as credit card debt, grew by $2.76 billion in December to $800.98 billion, after rising $5.58 billion in November. Non-revolving credit, driven by student loans and auto loans, posted a $16.55 billion increase, to $1.697 trillion, also following a major jump in November. Total consumer credit debt rose by $19.31 billion in December, a striking increase compared with a prediction from economists surveyed by the Dow Jones Newswires that... more »

Obama Announces New Mortgage Refinance Aid

On Wednesday, President Barack Obama announced some modifications to his administration’s previous foreclosure-prevention plans in hopes of extending relief to more struggling homeowners. “I am sending Congress a plan that will give every responsible homeowner in America a chance to save about $3,000 a year on their mortgage by refinancing at historically low rates,” he told an audience in Falls Church, VA as quoted in a New York Times article. “No more red tape. No more runaround from the banks.” The President did admit that previous efforts have been less effective than expected, but he said this new round of... more »