Recently polled consumers, by 41%, agree strongly that mortgage brokers should be better regulated. According to the Wall Street Journal Online/Harris Interactive poll, conducted Dec. 10-12, a quarter of respondents agree that the government should provide financial help for mortgage holders, while 20% disagree and another 22% strongly disagree.
When asked who’s most responsible for the trouble in the housing market and mortgage business, half blamed mortgage lenders and brokers, while 21% said government regulators are responsible and 16% said home buyers are to blame.
Nearly half of those surveyed also say direct lenders are most responsible for making sure borrowers are able to pay their mortgages and that they should be required to modify loan terms for mortgage holders who can’t afford their current terms. By comparison, 15% disagree and 24% said they neither agree nor disagree. (more…)
The nation’s largest investor in residential mortgages has decided to air an Internet video about foreclosure fraud. Recent website traffic counts found that the Internet is the first place one in four mortgage delinquent homeowners go for mortgage information. Unfortunately, Internet searches can send consumers into the hands of con artists whose only desire is to steal their home equity. Freddie Mac’s two-minute “Avoid Fraud” video dramatizes a common foreclosure fraud scheme and demonstrates the game the scam artist plays to get at your equity.
New lending regulations expected to be proposed would apply to loans made by all types of lenders, including banks and brokers. The plan from the Fed, which has regulatory powers over the nation’s financial system, could be finalized next year.
The Fed is considering barring lenders from penalizing subprime borrowers and those who pay their loans off early. New regulations may also force lenders to make sure that borrowers, especially subprime borrowers, set aside money to pay for taxes and insurance and restricting loans that do not require proof of a borrower’s income. (more…)
The United States Senate approved a bill that will make it easier for thousands of homeowners with ballooning interest rates to refinance into federally insured loans. The legislation, approved 93-1, would allow the Federal Housing Administration to back refinanced loans for borrowers who are delinquent on payments because their mortgages are resetting to sharply higher rates. The bill also tries to make FHA loans more attractive than risky subprime loans by accepting lower down payments and expanding the eligibility for counseling for homeowners having difficulty with their mortgage payments. (more…)
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It’s a given that home buyers should put down 20 percent or more on their home purchase. Those that can afford that kind of mortgage down payment, will secure a loan on the best terms. And, those borrowers will save by not having to pay for private mortgage insurance (PMI) or the FHA equivalent of PMI, also known as MI, or a higher monthly interest rate.
Smart borrowers need do consider that there may be sources for a down payment other than a savings account. For example, some companies allow participants to borrow from their 401(k) plan. Usually the loan must be repaid within a fix amount of time, typically five (5) years. And, if the borrower leaves that company’s employment, the 401(k) loan might have to be repaid within a number of days from separation. (more…)
For the people who pay their bills on time and avoid excessive debt, the mortgage bailout, coupled with subprime loan problems is causing those folks to bear additional mortgage related expenses. Fannie Mae last week raised costs for many borrowers by quietly adding a 0.25% up-front charge on all new mortgages that it buys or guarantees. On a $400,000 mortgage, that would mean an extra $1,000 in fees. Most certainly, the increased costs will be passed on to the consumer. Freddie Mac, the other big government-sponsored mortgage investor, is expected to also impose a similar fee. The fee is the latest in a series of moves by Fannie and Freddie that raise the cost of credit for some borrowers. Late last month, they imposed surcharges that affect mortgage borrowers who have credit scores below 680, on a standard scale of 300 to 850, and who are borrowing more than 70% of a property’s value. (more…)
For a variety of reasons, the American consumer has been piling-on a mountain of debt. Bankruptcies, mortgage delinquencies and credit card bills are all up, but some of that debt isn’t their fault. Predatory lenders are the cause of many subprime defaults, and they’re also hurting consumers in the wallet, too. The American Bankruptcy Institute says that consumer bankruptcy filings increased over 28 percent in November, year over year. Chapter 13 filings constituted 39.53 percent of November’s cases, a slight increase over October. Adding to consumer pressures are credit card debt, which the Federal Reserve says consumer debt increased 5.25 percent in the third quarter. Right now, consumers are carrying about $2,200 in credit card debt. (more…)
The recent plan proposed by the White House will help some borrowers with subprime adjustable-rate mortgages. Other borrowers who are having trouble making their payments may not qualify for the interest-rate freeze. To qualify, borrowers must live in their home and face a payment increase of more than 10% when the rate on their ARM resets for the first time. The program is designed to help borrowers who aren’t good candidates for refinancing because of a poor credit score, have little or no equity in their homes or a history of late payments. To qualify for the fast-track mortgage assistance program, borrowers must have a credit score of less than 660 and it can’t have improved by more than 10% since the mortgage was originated. (more…)
A national hotline to help borrowers facing foreclosure has been inundated with calls. Borrowers facing foreclosure were told to call 888-995-HOPE. This line has had a normal call volume of about 1,500 calls a day. Tracy Morgan, vice president of communications and business development for the Homeownership Preservation Foundation is saying that the hotline service has been deluged with requests since President Bush proposed a plan to help ARM holders with their mortgage interest rate resets.
According to Morgan, calls to the hotline have steadily increased throughout the year as the foreclosure crisis has grown and the hotline has gotten more publicity. Calls increased 100 percent from the first quarter of the year to the second quarter, and 94 percent from the second to the third, she said. The Homeownership Preservation Foundation has increased the number of counselors available to staff the hotline, and it plans to add another 70 by the end of the year to bring the total to 250, she said.
