Home Loan News – Mortgage Company In Need of Refinance
The news about the housing market has ‘not been good’ for some time now. It seems that we are bombarded on a daily basis with fresh headlines by Caty Couric or Charles Gibson about the latest woes to befall sub-prime mortgage home-owners. The sheer plethora of news on the subject is getting so depressing that I think it could actually be adding to the overall mental state of the nation, almost willing us into a recession.
The facts are undeniable. Foreclosures are up to 7.6% from 7.3% of loans past due or in foreclosure. The biggest rise in these numbers relate to what are called sub-prime mortgages. These are mortgages that were sold to lower income families where the original starting payments were set at a reduced rate. When interest rates rose, the borrowers of this type of mortgage were caught out. Instead of having to make a payment that they had been quoted when the mortgage was sold to them, they faced much higher payments in line with the higher interest rate prevailing at the time.
Now its easy to say that this is their own fault and that they should have been more careful when entering into the loan and that the duty of care is on the borrower to ask about the risks involved and the potential downside that a rise in interest rates would cause. The worrying thing is though, that many of these loans were sold to people who were novices in owning their own home and such complicated financial instruments. They came from low income households and were ‘blinded’ by a dream that most of us take for granted.
I am not the only one who thinks so. The Attorney General in Illinois is already investigating Countrywide Financial Corp for its potentially illegal targeting of minority groups for the purchase of high cost loans. This is just one of many State and Federal investigations underway.
Countrywide is also under scrutiny as its CEO Angelo R Mozilo is now being investigated for possible illegal securities transaction in which he cashed nearly $120 million dollars worth of stock shortly before his company announced bad loans of $422 million in the fourth quarter of 2007. Countrywide who are currently being taken over by Bank of America has also been named by the F.B.I. today,(9th March 2008), as one of fourteen lenders being investigated for lending practices.
As with most investment stories, when people are losing money, there is usually someone making it. It emerged in recent days that Warren Buffet may be about to step in to take a stake in Countrywide. Mr Buffet, who recently topped the world list of the richest men on the planet, knocking off Bill Gates after thirteen years, has been sitting on a cash-pile of some $50 billion dollars for some time now. His investment company, Berkshire Hathaway has reported taking a stake in Bank of America recently and rumours abound that he is looking to get involved once again in the financial & mortgage securities markets. As usual, Mr Buffet, your timing is impeccable!
Even ‘The Donald’ could be seen recently on National TV bestowing the virtues of property investment. I have to agree with Mr Trump that those who have the ability to invest in property in a depressed market are possibly the people who will profit the most. For the average man in the street though, I think the message is clear. When taking out a home loan or refinance package, get some professional advice. Check the small print and know the downside before signing the agreement.
Neil Ebsworth
http://www.articlesbase.com/finance-articles/home-loan-news-mortgage-company-in-need-of-refinance-361109.html
What are the three things you would do to enhance the New Federal Mortgage Plan? ?
http://news.yahoo.com/s/ap/20081112/ap_on_bi_ge/meltdown_mortgages
There are three things that I would suggest – nothing really revolutionary and two of the three are already available in current legislation and just need to be implemented.
1) Emergency legistlation as applicable to Tranche market barring the withhold of loan modification for a period of no less than three years.
2) Change 1 eligibility requirement for Loan mods. Instead of owing more than 90% of the face value of loan make it 75%
3)"Fannie and Freddie own or guarantee nearly 31 million U.S. mortgages, or nearly six of every 10 outstanding" Does this mean that up to 40% of deeds to outstanding mortgages have not been perfected and vaulted? This is the crux of the problem. What I suggest is well within current guidelines:
Those deeds can be renegotiated 100’s of times on the open market. Firstly, all fees, commissions, interest etc. can be collected back from the original loan servicer and any intermediary loan servicer and or Title Company that did not file on a timely basis (say goodbye to all those big bonuses) I believe the current legistlation offers options to pursue individuals as well as corporations. Secondly, fines can be levied for not actively participating in loss mitigation. Thirdly, outstanding deeds can be voided and replaced. {If the mortgagee does not breach the agreement of loss mitigation in anyway (including refinancing, selling, etc.) at the end of the newly agreed upon mortgage term let the mortgaee be presented with a warranty deed} What that means to the consumer of an unperfected, unvaulted deed is that if you effectively and fully perform your obligations under your modified loan contract you will be presented with the best and most uncontestable deed to you home .
No person or entity should be allowed to own more than two houses.
That will keep the price down.
References :
One good thing that might never happen would be to prohibit builders of new houses from putting in expensive doodads that inflate the price, but can be added later when the homeowner can afford them. Build plain, roomy houses that have the potential for expansion and improvement under responsible home-ownership.
References :
A homeowner.