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Is Mortgage Shopping Too Quick?

Is Mortgage Shopping Too Quick?

Has mortgage shopping become too quick and easy? Or, are speedy mortgages a good thing, evidence that automated loan services are a growing success, making it easier to get financing with fewer hassles? “On average,” reports Zillow, in a just-released study, “Americans spend just eight hours researching their home loan, and obtain just four quotes […]

FHA Reverse Mortgage Restrictions Lie Ahead

FHA Reverse Mortgage Restrictions Lie Ahead

For a number of years the reverse mortgages insured by the FHA were a successful product in the sense that borrowers got their cash and the FHA had few claims. However, the FHA reverse mortgage program does not work in isolation — it actually requires rising home values. The typical reverse mortgage is outstanding for […]

Big Bank Derivative Bets Nearly Double In Six Years

Big Bank Derivative Bets Nearly Double In Six Years

America’s major banks now hold derivatives with a notational worth of $225 trillion — about a third of the world total. No kidding. Trillion. And that’s up from a mere $120 trillion six years ago. Rather than being weened off derivatives, America’s big banks are more deeply entrenched then ever. Hopefully Wall Street has it figured […]

Why Obama Should Favor Mortgage Appraisals

Why Obama Should Favor Mortgage Appraisals

President Obama inherited the worst financial crisis since Hoover and the Great Depression. It follows that getting the country back on track is no easy task and while his new housing plan includes much to support it also includes a provision to dump appraisals when they are most needed. Dump is really the right word. Fannie […]

Why Bernanke Is Wrong On Mortgage-Backed Securities

Why Bernanke Is Wrong On Mortgage-Backed Securities

Oh no, Federal Reserve Chairman Ben Bernanke wants more taxpayer dollars to bailout the upper-class. He doesn’t actually say that, of course, but what else would be the result if the government — us — starts to buy mortgage-backed securities from poor, down-trodden investors who hold billions of dollars in mortgage-backed securities? In basic terms […]

Washington Special Interests and Mortgage Loans

Washington Special Interests and Mortgage Loans

“Pro-Housing Policies will Stimulate Job Growth” says the National Association of Home Builders. Well, good, where do we start? What exactly are those “pro-housing” policies? “The inventory of new homes for sale is at a record low and there are many areas of the country that are approaching a housing shortage. Tight credit conditions are […]

Stock Prices At Heart Of Mortgage Crash

Stock Prices At Heart Of Mortgage Crash

A new and revealing study by the Mortgage Bankers Association argues that the introduction of risky loan products during the past few years was caused in large measure by efforts to pump up lender stock prices. Written by Clifford V. Rossi, a business professor at the University of Maryland, Anatomy of Risk Management Practices in […]

How Paper Mortgage Losses Turned Real

How Paper Mortgage Losses Turned Real

The question that keeps coming up is this: If only a small portion of all mortgages are failing how come the general financial impact has been so enormous? To resolve this mystery, let’s go back to the 1970s when the mortgage-backed security — the MBS — was developed. The MBS was a financial device designed […]

Wrong-Way Borrowing Threatens Borrowers, Lenders

Wrong-Way Borrowing Threatens Borrowers, Lenders

Freddie mac figures show that as of September 18, 2008 you could get a 30-year fixed-rate mortgage for 5.78 percent plus .6 points. How low is 5.78 percent? In June, 2003 we saw 5.21 percent plus .5 points — the lowest mortgage rate in 45 years. This would all be encouraging except that it’s difficult […]

By September 19, 2008 0 Comments Read More →

The Case Against Too Many Options

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 […]

By September 19, 2008 0 Comments Read More →