Smart Borrower Blog

Archive for the ‘Mortgage Refinancing’ Category

One State’s Mortgage Miseries

Maryland is a state that has seen its share of hard time from the fallout in the mortgage market.   Those mortgages in question are the infamous option arm loan.   This was one of those “no money down too good to be true” loans that had extremely attractive interest rates, and put thousands of Maryland homeowners into foreclosure. These loans were so toxic that they put two banks out of business - IndyMac and World Savings. It has caused so much trouble in Maryland that 800 Maryland lawyers have volunteered to help homeowners as part of the state’s foreclosure... more »

FTC Fights the Latest Wave of Scammers

Create a conflict, and the scam wizards come out of the woodwork.   Ever the opportunist, they prey on people in trouble, taking advantage of the fact that the person is distressed and confused. Now we see that the FTC has uncovered yet another shady business deal.   Mortgage modification and bankruptcy prevention services are popping up all over the country.   They target consumers whose home is endangered, and used deceptive marketing strategies that aligns them with nonprofit or government organizations. The approach people with their services, and demand an upfront payment for these services.   This can be... more »

Mortgage Delinquencies Up 50 Percent in Past Year

Recent data from one of the major U.S. credit bureau shows that mortgage delinquencies continue to rise, suggesting that the troubled national housing market has not yet bottomed out. According to Dann Adams, president of U.S. Information Systems for Equifax Inc, during February 2009, 7 percent of all U.S. mortgage loans were delinquent by at least 30 days or more, representing a 50 percent jump from the same time last year. Among subprime or poor credit home loans, 39.8 percent of borrowers were delinquent by 30 days or more, up significantly from 23.7 percent in February 2008. “I’m trying to... more »

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 »

Banks Walking Away From Foreclosures

An interesting development in the mortgage market is banks that are starting to walk away from foreclosures.   In an article in the New York Times, reporter Susan Saulny tells of a situation in South Bend Indiana.   A homeowner had received notice that she had lost her rental property to foreclosure.   A date for a sheriff’s sale had been set. The landlord had the tenants move out of the rental property.   The property stood empty and was damaged by looters and vandals, soon falling into disrepair. Not long after, the landlord received a notice from the city... more »

Mortgage Fraud Reaching Emergency Levels

One of my favorite tools for posting to the blog is the alerts I get from Google and Reuters.   Once or twice a day I get an e-mail digest that gives me all the latest headlines in the mortgage market. Here is what I’ve been seeing. “Seven indicted in states biggest mortgage fraud scheme” “Florida mortgage fraud crisis called state of emergency” “Former nightclub owner pleads guilty to defrauding banks on mortgage loans” The list goes on. It seems everyone is getting into the mortgage fraud game.   From reading these articles listed here, you get the feeling that... more »

Treasury’s Geithner Wants More Government Regulation

The Obama Administration is planning a broad, dramatic set of new regulations for the U.S. financial system, a plan that is being met with criticism from both the banking industry and many Republicans on the Hill. In an appearance before the House Financial Services Committee Thursday, Treasury Secretary Timothy Geithner claimed that “our system failed in basic fundamental ways” and needed “not modest repairs at the margin, but new rules of the game." “The most simple way to frame it is: capital, capital, capital,” he added. “That’s something we have to impose through standards set in regulation.” Some of the... more »

Obama To Make Changes In Regulation

This week, the Obama administration will outline changes in regulations to avoid a repeat of the financial crisis that has hampered the banking system and put the economy in the deepest recession since 1982. Deregulation doesn’t appear to have been the best way for the banks to play.   When it came about in 1999, driven by the Clinton administration and the Republican Congress, the role of the bank was pretty clear-cut.   After deregulation, the banking industry could then enter into insurances and brokerage businesses.   Other factors were interstate banking, and states’ deregulation of banking.   It appears... more »