Smart Borrower Blog

Archive for the ‘Mortgages’ Category

Small Business Lending Surges in April

The latest survey from PayNet Inc shows that small business loans increased significantly in April over the past year, a hopeful sign for the economy in an otherwise dismal news week. The Thomson Reuters/PayNet Small Business Lending Index, a measure of total loan volume to small businesses, jumped up 17 percent compared with April 2010, making nine consecutive yearly double-digit gains. However, borrowing by small businesses was down 1 percent from March of this year. “The fact that small businesses are hanging in there is a good sign for the economy,” said William Phelan. PayNet president in an interview as... more »

Will We See Higher Interest Rates This Year?

The minutes from the Federal Open Market Committee April 26 – 27 meeting were released today, revealing that Federal Reserve officials have started talking about an exit policy for its aggressive market support measures. That means interest rates are bound to rise, but how soon can we expect a jump in rates? “While the Fed said they’re tussling internally, they’re certainly not ready to step on the accelerator,” with regards to raising interest rates, said Jim Meyer, chief investment officer at Tower Bridge Advisors in a Wall Street Journal article. “They didn’t really accelerate any timetable. When the Fed says... more »

Big Banks Say $5 Billion Should Be Punishment Enough

After seven months of trying to work out a settlement for their “robo-signing” foreclosure scandals, the nation’s big banks are now offering $5 billion to the state attorneys general to close the matter. Last fall it was discovered that many banks were trying to fast-track the foreclosure process by skipping some of the necessary legal protocol and paperwork. This has led in some cases to wrongful evictions and all 50 states banded together to go after these banks, including Bank of American, JPMorgan Chase, Wells Fargo, and Citigroup. The states joined up with several government oversight agencies, among whom are... more »

Big Banks are (Slowly) Opening the Lending Spigots

The latest survey from the Federal Reserve found that some banks are in fact starting to loosen their almost impossibly high lending standards as the economy starts to pick up. “The April survey indicated that, on net, bank lending standards and terms generally had eased somewhat further during the first quarter of this year,” the Fed wrote in its quarterly survey of senior loan officers. The impetus for this easing may have been an improvement in borrower credit-worthiness. The report found that 55 percent of domestic banks saw better credit quality among their large and middle-sized loan applicants. Thirty-five percent... more »

Cost of FHA Loans Set to Rise

Ever since the housing market bubble burst, FHA loans have been in high demand. With tighter lending standards in place for conventional loans, more people have no other option other than an FHA backed mortgage. While FHA loans are still only made available to credit worthy applicants, the criteria is not quite as stringent. Applicants need only put 3.5 percent for a down payment, making these loans in reach for many first-time homebuyers. Due to the high demand of these loans, the FHA has eaten through their reserve funds. What is supposed to be a 2 percent reserve cushion has... more »

Home Sales Down, NAR Blames Lending Standards

Sales of existing U.S. homes fell 9.6 percent in February, according to the National Association of Realtors, the first drop in three months. The NAR is pointing its finger at lenders’ strigent loan standards as the reason for the continued housing market woes. “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers,” said Lawrence Yun NAR chief economist. “This tug and pull is... more »

Mortgage Applications Rise to Highest Pace in Three Months

The number of applications for mortgage loans bounced up to it highest level since December, according to data from the Mortgage Bankers Association. Based on its seasonally adjusted index of mortgage application movement, refinances and home purchase applications were collectively up 15.5 percent during the last week. The refinance index alone was up 17.2 percent, while the home purchase index also jumped by double digits – 12.5 percent. “An improving job market is beginning to pave the way for an improving housing market,” said Michael Fratantoni, MBA vice president of research and economics. “Additionally, mortgage interest rates remained below 5... more »

The Bank Of America Cover-up According To Anonymous A Hacker Organization

Anonymous, a hacker organization just released a batch of emails that they say were provided to them by a former employee from Bank Of America. The emails they say show that a division of Bank Of America hid information related to foreclosures. For Bank Of America, this is another punch in the stomach as they have been dealing with foreclosure issues for months. These particular accusations are against Baboa Insurance which was acquired by the bank during the buyout of Countrywide back in 2008. Balboa Insurance worked with Countrywide and dealt with mortgages that needed to have forced place insurance... more »

US Banks Could Soon Face Sanctions for Foreclosure Violations

Last fall federal investigators began looking at 14 of the largest banks in the US, including Bank of America, Citibank, Wells Fargo, JP Morgan and more. Allegations had been made that the banks had wrongfully foreclosed on homes across the country. As a result Attorney Generals in all 50 states and the Federal Government began to carefully look at foreclosure proceedings and whether or not they were lawful. US regulators are now getting ready to sanction some of the banks investigated. Banks were being accused of illegally foreclosing on homeowners by taking shortcuts in order to speed up foreclosure proceedings.... more »

Demand Falls as Mortgage Rates Jump

Mortgage interest rates jumped up this week, according to the Mortgage Bankers Association , and as a result home loan applications took a dive, a sign that the housing market is not reviving on pace with the rest of the economy. The MBA reported that the average rate on a 30-year fixed rate mortgage broke the 5 percent barrier this week, moving up to 5.13 percent from 4.81 percent the week before. That is the highest rate in almost 10 months. As rates increased, demand for mortgages slowed with the MBA seasonally adjusted mortgage application index falling 5.5 percent. “Mortgage... more »