Smart Borrower Blog

Archive for the ‘Mortgage Refinancing’ Category

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 »

More Woes In The Financial Sector

Mortgages insurer MGIC investment Corporation took a hit this week from Fitch Ratings on Thursday.  The company’s operating subsidiaries are also on a negative watch. MTG currently carries a “BBB-” rating, the lowest that is considered investment-grade.  If the insurer is downgraded to junk status, it would hamper their ability to generate new business. The rating from Fitch indicates increasing financial pressure on the company and the mortgage insurers sector as a whole. Since the collapse of the mortgage market in the middle of 2007, this sector has taken a bad beating.  Business has dried up because the sale of... more »

Greenspan: Fed Actions Did Not Cause Recession

Although admitting that “we are in the midst of a global crisis that will unquestionably rank as the most virulent since the 1930s,” former Federal Reserve Chairman Alan Greenspan contended Tuesday that the interest rate actions of the Fed were not to blame for the current recession. In an opinion article on the Wall Street Journal’s web site, Greenspan argued that the true cause of the trouble was in the mortgage lending industry itself.   “The interest rate that mattered was not the federal-funds rate, but the rate on long-term, fixed-rate mortgages,” he wrote. “Between 2002 and 2005, home mortgage... more »

Obama Announces Details of New Housing Plan

President Barack Obama announced the details of his $75 billion plan Wednesday to help roughly 9 million struggling homeowners avoid foreclosure. “The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly, by refinancing loans for millions of families in traditional mortgages who are underwater or close to it,” he said in a speech at an Arizona high school. The funding for the Obama plan will come from the $275 billion stimulus package announced last month. It focuses on two major objectives. The first is to aid homeowners in refinancing into new, affordable mortgages,... more »

Obama Commits $75 Billion to Fight Foreclosure Crisis

U.S. President Barack Obama unveiled his plan Wednesday to heal prop up the drooping national housing market, pledging $75 billion of government funds to fight high foreclosure rates. In a speech at high school just outside of Phoenix, Arizona, the President laid out a four-point plan for restoring the health of the mortgage sector. He said that his administration will: 1.Allow Fannie Mae and Freddie Mac to Modify Mortgages Currently, the government-sponsored mortgage companies, that own or guarantee a large portion of the nation’s home loans, are restricted from modifying “upside-down” mortgages and those that are more than 80 percent... more »

Country Shows Strong Reaction To The Bailout Plan

You don’t need to look any further than the trading floor of the NYSE to see people’s reactions to the proposed mortgage bailout.  This week CNBC reporter Rick Santelli went on a rant, wanting to know why people who pay their bills on time need to help bail out people that don’t.  It is a common reaction all over the country. I think the plan has good intentions.  There are people that are deserving of help.  However in my opinion, there are a great many that don’t.  I’m not saying it’s their entire fault.  This whole meltdown was engineered by... more »

Geithner Reveals Obama Bailout Plan

The Obama administration laid out its new bailout plan Tuesday, projecting a total cost of $1.5 trillion to $2 trillion, including the second half of the original $700 billion bailout program funding. U.S. Treasury Secretary Timothy Geithner held a press conference, giving out details of the Financial Stability Plan and defending the high price tag. “As costly as this effort may be, we know that the cost of a complete collapse of our financial system would be incalculable for families, for businesses and for our nation,” he said. “We will make mistakes. We will go through periods in which things... more »

Blacks & Hispanics Are Led Down The Garden Path

Image by bobster1985 via Flickr Here is a real legacy for you.  During the Bush administration, minority Americans lost up to $213 billion in wealth during the eight years that Bush was in office.  It was attributed to the so-called subprime mortgage crisis.  The Boston-based social advocacy organization United for a Fair Economy recently released this study. The report, entitled Foreclosure Date of the Dream, focused on the fact that many Blacks and Hispanics were put in this situation due to predatory lending in which the buyers were stuck with loan terms and increasing costs that they did not fully... more »

Refinancing May Not Be As Easy As You Think

Thirty year mortgages are continuing to hover around the 5% mark.  This keeps interest in refinancing high.  Even though many homeowners want to trade in their adjustable rate mortgages for fixed-rate loans or combine first and second mortgages to bring the payments down, we find that this is not always doable. There are a lot of reasons why refinancing isn’t the best deal for a lot of homeowners.  We see declining property values, record job loss, reduced income and legislative bodies that can’t make their mind up on what they want to do. The reason so many homeowners are out... more »

Low Rates Spur Major Refinancing, But Not Home Buying

The demand for mortgage money shot up in the latest week, led heavily by an increase in refinance requests, according to the Mortgage Bankers Association Wednesday. The MBA’ weekly Market Composite Index, a measure of the number mortgage applications filed, grew by 8.6 percent in the week ended January 30, 2009, to 795.4 on a seasonally adjusted basis from 732.1 the previous week. By far, the majority of the applications during the last week were for refinance loans rather than home purchase loans. The refinance share of all applications rose to 73.2 percent from 72.8  percent the week before. The... more »