April 2007
Monthly Archive
23 Apr 2007 04:00 am
The Problems With Fixing Lender Disclosures
| 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 08:25 am
Subprime Lenders 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 07:15 am
Homeownership In 2007 Gets A Little Cheaper
| Finally, good news for homeowners. Under a new law, certain borrowers who take out a mortgage for purchase or refinance in 2007 are eligible to write off all or a portion of their mortgage insurance premiums for the year. It’s a tax break many in the industry have sought for years because the insurance is often regarded as a cost akin to mortgage interest or points. Mortgage insurance is required for borrowers who make less than a 20% down payment; its purpose is to protect lenders from losses if the borrower defaults on the loan. The insurance is cancelled when there is enough equity built up in the home. |
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search for : mortgage, refinance, mortgage insurance premium
20 Apr 2007 06:59 am
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
The steps in 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
18 Apr 2007 07:21 am
Many lenders tightening standards on subprime
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The stricter lending standards are the fallout from the subprime mortgage market meltdown. About 15 percent of mortgage borrowers are in the subprime category. Those are the least creditworthy people, with credit scores less than 620 (on a scale of 300 to 850). About 85 percent of mortgage borrowers have credit scores of 620 or higher. So far — knock on wood — most of these prime customers needn’t worry about being turned down for home loans on the basis of their riskiness as borrowers, so long as they’re willing to let the lender verify their incomes and assets. |
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search for : subprime mortgage, credit score
17 Apr 2007 08:05 am
Your Finances, How Much Home Insurance Is Necessary?
| Make sure your policy covers the cost of rebuilding — and don’t confuse the real estate value of your house with what it would cost to rebuild in case of damage. And remember, most standard policies, which usually cover disasters such as fire or hurricanes, do not include flood coverage. Consider buying coverage from the National Flood Insurance Program ( www.floodsmart.gov), or buy additional coverage from your current carrier. |
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search for : real estate value, flood coverage, National Flood Insurance Program
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