Toxic Loans
The Case Against Too Many Options
The latest mortgages to catch the attention of both the media and federal regulators are “option” loans, a form of financing which is likely to end badly for lots of borrowers. More than a decade ago a few California lenders came up with a clever idea for borrowers with good credit and a solid payment [...]
19Sep2008 | Peter G. Miller | 0 comments | Continued
Toxic Loans Threaten Home Values
Stashed away amid the tons of paperwork generated each day in Washington — reading which no one argues is a threat to Shakespeare — is HUD’s 2007 Budget Summary, a document which ought to make a lot of people take notice. “Congress recognizes that today’s high cost loans negatively impact consumers, communities, and the economy. [...]
18Sep2008 | Peter G. Miller | 0 comments | Continued
The Beauty of Interest-Only Loans — And The Beast
There’s no doubt that the newest trend in real estate financing is the interest-only loan, a trend which needs to be examined with care by anyone who prefers to avoid poverty. An interest-only loan is both what it seems and not what it seems. It’s interest-only debt for some or all of the loan term, [...]
17Sep2008 | Peter G. Miller | 0 comments | Continued
Should Lenders Dump No-Tell Loans?
For many years the lending process has become less and less rigid. In the general case this is a trend to be welcomed, but the question to be asked is this: Have we gone too far? With “stated income” loans borrowers tell the lender how much they make but the lender graciously does not verify [...]
16Sep2008 | Peter G. Miller | 0 comments | Continued
Super-Jumbo Loans Face Hard Times
It must have seemed like a good idea at the time: Not only could you get 100 percent financing for your home, you could do better — 110 percent, 125 percent, and sometimes even more. If you bought or refinanced a $200,000 home you could borrow $220,000, $250,000, or perhaps a higher figure. Such loans [...]
14Sep2008 | Peter G. Miller | 0 comments | Continued
Will Regulators End Liar Loans?
With foreclosures rising and home prices falling, could something other than supply and demand be moving the real estate market? That’s a question increasingly being raised in Washington, where a new interest in mortgage fraud is beginning to emerge. “Mortgage fraud takes many forms,” says Jim Saccacio, Chairman and CEO at RealtyTrac.com, the nation’s largest [...]
1Sep2008 | Peter G. Miller | 0 comments | Continued
Subprime Crisis: Serious or Not?
In the past few months there have likely been thousands of articles and blog comments regarding the subprime lending “crisis”. But are such worries overblown? Is there less of a crisis than we think or perhaps even no crisis at all? Speaking at the National Press Club, John Robbins, Chairman of the Mortgage Bankers Association, [...]
1Sep2008 | Peter G. Miller | 0 comments | Continued
Toxic Loans: The Coming Storm
(Presented before the Association of Real Estate License Law Officials (ARELLO), April 7, 2006, at Jacksonville, FL.) It’s been a very good century for real estate, at least so far. According to the National Association of Realtors, the typical home that sold for $139,000 in 2000 was worth $208,700 in 2005. Not only have home [...]
25Aug2008 | Peter G. Miller | 0 comments | Continued
Did One Mortgage Regulator Get It Right?
For months, Sheila Bair, head of the Federal Deposit Insurance Corporation, has been saying that there’s an instant solution to the mortgage meltdown that can prevent massive numbers of foreclosures. Not a perfect solution, but a solution. Her idea? Freeze toxic loans at their original interest rates. Writing in the New York Times, Bair says [...]
20Aug2008 | Peter G. Miller | 0 comments | Continued
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