Nov 5, 2009 | No Comments | Sean Mills
Two wars we cannot afford, Auto makers seeking protection, Federal government spending like there is no tomorrow, banks and lenders acting like we should be thankful for their business. At what point do we get mad as hell and stop the insanity? I got so fumed at this I just stopped reading it “thinking what was [...]
Two wars we cannot afford, Auto makers seeking protection, Federal government spending like there is no tomorrow, banks and lenders acting like we should be thankful for their business. At what point do we get mad as hell and stop the insanity? I got so fumed at this I just stopped reading it “thinking what was the point?” -Sean
Nov. 3 (Bloomberg) — In the musical comedy “Little Shop of Horrors,” a dangerous and gluttonous plant dubbed “Audrey II” signals its insatiable appetite for human blood with a baritone demand, “feed me.”
In the real-life Shop of Horrors, the evil plant is gone. In its place is our voracious financial industry, which has been partaking in menacing feedings while stirring up fear of the havoc to come if it doesn’t keep getting what it wants.
A year after the world’s banking system almost collapsed, you online drugs without a prescription might think financial bosses would be agonizing over how they would be depicted in history books, and anyone with a job would be offering to stick around and clean up the mess for a pittance.
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Nov 5, 2009 | No Comments | Sean Mills
Last fall, as the financial system was teetering and the biggest banks were tightening credit, Karen DeForte couldn’t find a lender to refinance the two mortgages on her New York home, until she received a phone call from Lend America.
Most banks rejected Ms. DeForte because her debt level was too high and her credit score [...]
Last fall, as the financial system was teetering and the biggest banks were tightening credit, Karen DeForte couldn’t find a lender to refinance the two mortgages on her New York home, until she received a phone call from Lend America.
Most banks rejected Ms. DeForte because her debt level was too high and her credit score too low. But Lend America put Ms. DeForte into a $402,000 loan backed by the Federal Housing Administration, a New Deal-era agency that Washington and Wall Street were relying upon to pick up the slack in the mortgage market as private lenders pulled back. Ms. DeForte fell behind on payments six months later and is seeking a loan modification. Taking the loan was “a stupid mistake,” the 46-year-old office manager said.
In late 2007 and early 2008, thousands of borrowers with marginal credit were allowed to refinance via the government-insured FHA program, just as home-price declines began to accelerate. Policy makers were urging the agency to fill the gap left by the exit of private lenders, refinancing subprime borrowers out of loans that threatened to reset to unaffordable payments.
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Nov 5, 2009 | No Comments | Sean Mills
I was reading this article and it hit me how many times I speak with people that are in the position to “Strategically Default” on a home mortgage just because they are underwater. Everyone needs to decide what to do in their specific situation but here is some helpful statistics on the new wave hitting [...]
I was reading this article and it hit me how many times I speak with people that are in the position to “Strategically Default” on a home mortgage just because they are underwater. Everyone needs to decide what to do in their specific situation but here is some helpful statistics on the new wave hitting the lenders.
What Sakson did is called a strategic default, or a voluntary foreclosure, and it’s fast becoming a major order drugs without prescription challenge to the government’s $75 billion effort to keep distressed borrowers in their homes. Walking away from a mortgage is serious business — it can knock 100 points off your credit score and make you ineligible for a new mortgage for seven years. Yet, about 588,000 borrowers walked away from homes last year, double the number in 2007, according to a recent study by credit-scoring firm Experianand management consultants Oliver Wyman.
And the effects are transperant to…
More will walk away, which will hamper the housing recovery, reinforce lenders’ tight credit policies and drag on the economy’s recovery, economists say.
“It’s increasingly a more important factor driving the foreclosure crisis,” says Mark Zandi, of Moody’s Economy.com. “As we move forward, the job market will stabilize, and the big thing will be strategic defaults. People are going to determine it doesn’t make financial sense to hold on to their homes. That’s going to be a significant problem. Strategic defaults mean foreclosures could be high for a long time.”
It’s not just economists who are concerned about strategic defaults.
The mortgage unit of Citigroupsays one in five borrowers who defaults does so willingly, even though they’re able to pay the mortgage. “It’s a very large number, and it’s a very, very significant risk to the housing recovery,” says Sanjiv Das, CEO of CitiMortgage, adding that new government programs to curb strategic defaults may be needed. The number of borrowers who walk away is expected to increase, along with the rise in homeowners who owe more than their homes are worth. An unprecedented 16 million homeowners currently are underwater, according to Moody’s Economy.com. That’s about a third of all homeowners with a first mortgage.
To read the whole article in its entirety go to USA Today.
