The mortgage mess

The mortgage mess


STUPID LENDERS making stupid loans to stupid borrowers. You might think this sums up what the surge in mortgage foreclosures means to you. You would be mistaken.


That so many homeowners are having such trouble meeting their mortgage payments could very well mean your own home's value has dropped, that you may not be able to get a home-equity loan, or that your retirement savings will grow more slowly than you planned. Conceivably, it could even mean that the global financial system -- and by extension the economy and even your job -- is threatened.


The current mortgage mess has many causes, but none is more important than the abuse of an arcane process called securitization. In recent decades, creative bankers developed financial securities whose value was derived from homeowners' mortgage payments. More...

Storm brewing as mortgage rates move higher

Reuters - Borrowers of almost half of the $500 billion of risky subprime mortgages facing higher interest rates over the next 18 months will have trouble refinancing, J.P. Morgan Chase & Co. said on Friday. More...

High cost of consolidation

High cost of consolidation


People are putting their homes at risk over relatively minor debts such as credit card balances because they don't fully appreciate the difference between secured and unsecured debt.


"People are taking small, unsecured debts and refinancing them onto their mortgage, which is secured debt," says the co-ordinator of the NSW Consumer Credit Legal Centre, Karen Cox. "But if they create the situation whereby they can't pay their mortgage, they risk losing their house over a small credit card debt basically." More...

UK mortgage standards safer than U.S. but slipping

UK mortgage standards safer than U.S. but slipping


July 17 (Reuters) - UK lenders have been more conservative so far than their U.S. counterparts in providing mortgages to those with less than perfect credit histories, though standards are on the slide.


Both Citigroup and S&P estimate the UK's outstanding "nonconforming" mortgage bonds -- a broader definition that includes borrowers with poor credit histories and those who do not meet lending criteria for other reasons -- at about $70 billion, compared with $565 billion of U.S. subprime bonds. More...

Get Debt Free Fast With Smart Mortgage Refinancing

(Best Syndication) Now that you have purchased your dream home, you are now knee-deep in debt and facing heavy financial pressure. There is one useful solution used by many savvy real estate investors, a solution that involves more cash flow, lowered interest rate and lesser monthly payment. This financial tool, known as mortgage refinance, is not complicated at all, and only involves a bit of calculation and smart leveraging of money.


This may explain why home mortgage refinancing is a popular and lucrative deal. The rule of thumb in refinancing your mortgage is that the interest rate for the new loan should be at least 2 percentage points below the rate of your existing mortgage. In the present economic scenario where the market is saturated with credit institutions and multiple loan products, you are flooded with all types of offers such as the no cost refinance mortgage and the low cost mortgage refinance packages. As a result your new monthly repayment after the mortgage refinancing is considerably lower than the previous one. More...

Mortgage Applications Rise

Forbes: Applications for U.S. home loans rose slightly last week, an industry group said Wednesday.


The Mortgage Bankers Association said its weekly mortgage index, which measures the volume of applications for loans to buy or refinance homes, rose 0.1 percent on a seasonally adjusted basis. An increase in new home loans outweighed a decrease in applications for refinancing mortgages.


Mortgage lenders have been tightening lending criteria in recent months after a surge in defaults and foreclosures. Lenders catering to home buyers with weak, or subprime, credit, have seen a spike in loan defaults, and many have gone bankrupt or sold off their subprime businesses. More...

Telemarketers targeting mortgage shoppers

Telemarketers targeting mortgage shoppers

As a former mortgage broker, Adryenn Ashley thought she knew what to expect when she refinanced her house in March. Yet Ashley was unprepared for one twist she encountered: A barrage of phone calls and e-mails from rival lenders vying to sell her a better mortgage.
Some of the callers apparently knew just how much money she was borrowing. Others made such misleading come-ons such as "We need to update your information," or "We need to complete your application," Ashley recalls. More...
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