April 2007
Monthly Archive
24 Apr 2007 08:26 am
Bailing-out the subprime mortgage market.
| Many programs to help those facing foreclosure are being launched, with the aim of moving borrowers out of high-interest, variable-rate loans and into lower-rate, fixed ones.Maryland launched one of the first such plans, called Lifeline, a year ago. Say you’re a homeowner with a 2/28 hybrid ARM due to reset next month from the initial two-year 5.25 percent “teaser rate” to 8.25 percent. It will reset again every six months up to as much as 12 percent. The difference in monthly payments between the initial rate on your $200,000 mortgage and the first reset is nearly $400 ($1,502 versus $1,104). That’s bad enough but after another year or two, your mortgage payment could come to $2,057. You can’t afford it. |
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23 Apr 2007 04:00 am
Lender Disclosures, The Fix Is In
| The conventional wisdom about mortgage-lending disclosures is that the government should formulate and enforce disclosure rules because that ensures uniformity of disclosures across the market. I shared that belief for a long time. But if the government-required disclosures are useless or worse, which is the case, uniformity does not help borrowers. Indeed, poor disclosures can be worse than no disclosures because they lull borrowers into a false sense of security. |
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search for : mortgage-lending disclosures, disclosure rules
22 Apr 2007 08:26 am
Recently Subprime Lenders Fannie and Freddie Polish Image
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Freddie Mac and Fannie Mae said they expect to buy tens of billions of dollars of newly created subprime mortgage loans over the next few years to help prop up the roughly $1.3 trillion subprime market as lenders tighten their credit standards or flee altogether. The move shows how the two government-sponsored companies are redeeming themselves on Capitol Hill by depicting themselves as part of the solution to surging defaults on subprime mortgages, those for borrowers with weak credit records or high debt in relation to income. |
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search for : Freddie Mac, Fannie Mae, subprime market
21 Apr 2007 07:18 am
Refinancing Your Hybrid Mortgage Loan
| With all this recent talk about loan hybrids it’s no wonder refinance applications are up. People are seriously thinking about getting out of them and into fixed rate mortgages. Even though their adjustment period won’t take place for another couple of years. What gives? I have two good Realtor clients who have me on short leash that if the 30 year fixed conforming rate gets to 5.50 percent then they want me to refinance them out of their hybrid mortgage and into a fixed. Interestingly enough, they both have the same hybrid, a 5/1 conforming ARM at 5.50 percent. |
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search for : loan hybrids, refinance, hybrid mortgage
20 Apr 2007 06:59 am
Cash poor retirees look to reverse mortgages
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As thousands of baby boomers decide to retire every day, many suddenly realize they don’t have enough income to provide for a comfortable lifestyle. Meager Social Security income certainly isn’t the answer. But there is an easy solution. It’s a reverse mortgage, which can provide lump sums of cash for any purpose (such as a new roof, new car, trip around the world, bill payoffs, or something frivolous), a credit line for emergencies or investments (except in Texas), or lifetime monthly income even if you live to 110. Or, you can select any combination of the above. The best part is tax-free reverse-mortgage money never needs to be paid back as long as you live in your principal residence. Also, there is no personal liability. |
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search for : Social Security, reverse mortgage
19 Apr 2007 06:24 am
Should you consider refinancing your exotic mortgage?
| If you’re looking for a refinance, whether it’s because your current mortgage will soon adjust to a higher interest rate or because you’d like to borrow extra cash against your built-up equity, you can expect lenders to be more demanding about your credit, your ability to document your income and the appraised value of your home. They are less likely to OK new mortgages if the monthly payments consume more than 28 percent of the borrower’s monthly gross income, or if, combined with payments on other loans, debt repayment consumes 36 percent or more of income. |
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search for : refinance, mortgage, interest rate, appraised value of your home
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