Smart Borrower Blog

Archive for the ‘Mortgage Refinancing’ Category

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 it up with documentation, and have enough... 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 under... 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 of South Bend demanding... 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 people are... 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 it was rather like... more »

Is It Time to Refinance?

The Fed announced Wednesday that it is planning to purchase up to $300 billion in treasury securities over the next six months.  It will also purchase another $750 billion of mortgage backed securities between now and the end of the year.  The 10-year treasury dropped 50 basis points on this news. This caused a plunge in rates on fixed mortgages.  According to Bankrate.com, these rates dropped to 5% after the news. It would appear that now would be a good time to refinance.  If you’re considering this, SmartMoney.com suggests you look at these signals: If home prices are still falling... more »

Mortgage Interest Rates May Have Hit Bottom

Many market analysts are predicting that mortgage interest rates will not fall much lower than 5 percent  in the next few years, as plummeting rates have caused a flood of homeowners to start refinancing again. The average rate on a traditional 30-year fixed rate mortgage has fallen from around 6 percent in November 2008 to the current historic low of about 5 percent. January rates were the lowest on record in the past 30 years of the Freddie Mac mortgage rate survey. Economists are forecasting rates in the 5 percent to 5.25 percent range for the next quarter or two.... more »

Details Of The Refinancing Plan

This week, the Web is aflame with the news about AIG and its bonus plan.  Many taxpayers, including myself, are enraged to see millions of dollars paid in bonuses to the people that put us in this spot to begin with. President Obama, of course, will take heat for things like this happening.  He already meets a great deal of resistance for his plans laid out this far.  It is rather hard for American taxpayers to understand what Obama is doing, and much of this is due to the fact that we know little about his plans. The president’s refinancing... more »