What's So Great About 30-Year Fixed-Rate Mortgages? Wall Street Journal (blog)
By James R. HagertyOne benefit of our financial crisis is that it gives us a chance to rethink the way Americans finance their purchase of homes. Congress and the Obama administration are starting to think about how to reform federal institutions–such as Fannie Mae, the Federal Housing Administration and the Federal Home Loan Banks–that were created during the Great Depression and somehow managed to stay with us into a new century.
But we may be starting that debate with a false premise: That we need to preserve at all costs the 30-year fixed-rate mortgage with an option for the borrower to prepay at any time. That is the assumption of a new set of mortgage-reform proposals released today by the Center for American Progress .
Questioning the sanctity of the 30-year fixed home loan is tantamount to proposing that the White House should be repainted pink. For Realtors, mortgage lenders and home builders, the fixed rate is nearly as sacred as the tax deduction on mortgage interest (an even more dubious American policy, but let’s leave that for another day).
Refinance Help. Fill this form and get help!
Will I get my escrow money back from American Home Mortgage after refinancing?
I refinanced 2 weeks before American Home Mortgage declared bankruptcy. They still owe me my escrow money (a new escrow account was created at closing with the new company). Is the escrow money legally mine and protected from the company's bankruptcy, or can the company default on paying it back? Thanks!
The AHM mortgage was paid off and my new mortgage and new escrow are already in effect with my new company. The procedure was the AHM escrow was to be refunded to us and we already have a new escrow in place. While waiting for the AHM escrow to be refunded to us, AHM declared bankruptcy. Is the escrow money legally mine? Continuing to make payments is not the issue--we are already paying mortgage payments and already set up a new escrow with the new company.
it is yours; now as to whether they kept it separate [in a client trust account like they should have] ...
tough to guess
might depend on state law in your state ... you'll have to google that for yourself.
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it is almost certain sure that the refi was recorded the same day or the next day ... you can check on this at the usual place, possibly online [land records ... just put your real name in].
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one thing's for sure ... your regular monthly payment is still due at the address you were told. someone will be taking care of that and they'll follow up if the money doesn't show up.
GL
Escrow accounts are nothing but a piggy bank holding your money until your property taxes and insurance premiums are due (of course, there's no actual "piggy bank"--the mortgage company uses that money for their own purposes and then just pays the bill when it comes...yup, you're letting them borrow your money interest free)
Keep an eye on the mail for an announcement of who you should be making your mortgage payments to. It'll say something along the lines of "notice of servicing change."
Be careful, if you go over 30 days late due to lack of communication, your credit score won't care and you'll knock points off. So make sure you're on top of it and getting the payment to the right place.
I have a mortgage loan with American Home Mortgage that filed bankruptcy sometime last year? What should I do?
I have a 3-year ARM but terms of it is about expire before the 3 years. I want to refinance. Will the new law that recently passed help me?
The new law will have no effect on your situation. (Unless, that is, you're among the relatively few who need help and will qualify.)
Some lender--I don't know which one--now owns your loan. You'll just keep paying as you always have. And if you want to refinance, check with your current lender or any of the others out there.
However, since you bought your home 2-2-1/2 years ago, you're likely to find that its value has fallen, not risen. As a result, you may have a very difficult time refinancing. There may not be enough equity for you to do so.
Good luck.
They are not originating new loans so you can refinance with another bank, just not them.
Are Equity Loans the next round in the Mortgage Crisis?
New York Times
By VIKAS BAJAJ
Little by little, millions of Americans surrendered equity in their homes in recent years. Lulled by good times, they borrowed — sometimes heavily — against the roofs over their heads.
Now the bill is coming due. As the housing market spirals downward, home equity loans, which turn home sweet home into cash sweet cash, are becoming the next flash point in the mortgage crisis.
Americans owe a staggering $1.1 trillion on home equity loans — and banks are increasingly worried they may not get some of that money back.
To get it, many lenders are taking the extraordinary step of preventing some people from selling their homes or refinancing their mortgages unless they pay off all or part of their home equity loans first.
Equity loans are a large part of the current crisis. Many of the 100% funding programs that have been used in the last 4 years were home equity loans.
These are part of the current federal investigation that is ongoing.
Keep in mind that the "Banks" that are referred to in much of the news are not your local bank but banks that deal in buying large blocks of mortgage backed securities. They are the ones that are being hurt by the crisis and posting huge losses.
Unfortunately for local and community banks, they are being painted by the same brush. Many community banks, such as the one I am with, never made a single sub-prime loan. Yet our stock has taken a hit even though we have remained as profitable in 2007 as we were in 2005 & 2006.
I hope this helps.
Banks went crazy lending equity to anyone and everyone. It's ticking and it's coming for sure.
Bank closed someones, another stating their home is now not worth what they own on it & their mortgage, others that were relying on HELOC to make their escalated mortgage payment now can not, etc.
There's going to be a lot more fall out & casualties before this is all over.
Would it be better to refinance every U.S. Citizen's Primary mortgage than give >$1tril to financial giants?
The current ~$700Billion plan looks a lot like Government is bailing out its buddies in BIG BUSINESS, and nothing will ever trickle down to the common U.S. Citizen. To turn that around use the leftover ~$300Billion Bush Administration bail-out plus President Elect Obama's $825Billion to pay the Mortgage industry (the cost of processing the loan) to alter an process every U.S. Citizens primary residence mortgage decreasing it by ~20% and refinance that amount at the current Fed bank-to-bank trading rate. Banks are writing down all these mortgages/loans anyway because of decreasing values. Yes, these institution have some medicine to take, but there are hard times ahead, and the majority (U.S. Citizens) need to feel support.
The majority of U.S. Citizens upside-down in their mortgages are more likely to see value in making payments rather than just giving their house keys to the bank and vacating, which will wash-out home values, equity, and personal wealth in our Nation with catastrophic effect. This will allow every U.S. Citizen, in our Nations consumer economy, a long-term (30-year mortgage term!) solution to add breathing room in the upcoming years of this global economic downturn. The beneficiaries are the U.S. Citizen that then trickles up to U.S. Retailers, U.S. Banks, and Wall-Street.
This provides relief to ALL U.S. Citizens, even Us that made conservative decisions knowing what we could afford, while also restructuring recent mortgages of those duped by the greedy practices of this decade. The majority of mortgages will still get paid, banks can maintain cash flow, homeowner mortgage vs. home value evens, right-sides up, or equity is built. If the U.S. Citizen losses their house it's a good bet they will walk away from Credit Card debt and any other outstanding loans. Then what will happen to the Financial industry and all the $400billion in tax-payer money that's already been handed to them to do with as they please?
This isn't about the American public seeing immediate benefit (i.e. one-time stimulus check), but as a longer term (~30 year mortgage term!) solution to stimulating our consumer (~62%!) economy. It also shows that Government is supporting real people, not just big business. I think if You do the math You will find that the cost of writing these loans, which is consumed by the leftover ~$300Billion Bush Administration bail-out plus President Elect Obama's $825B stimulus package, doesn't compare to the cost to Financial institutions, and the U.S. Tax-payer swallowing ~10% (or greater) National home foreclosures. What will Financial institutions do with all these assumed homes and property that are now worth 30-50% less than their original cost to them? Will Government, I mean the U.S. Tax-Payer, buy them? Restoring consumer confidence is what the focus is here. How does getting 9 financial institutions to start loaning money to ultra qualified people that don't need a loan, compare to ~130,000,000 homeowners across 50 states having a few hundred extra dollars a month, for the next 30 years, to do with how they see fit?
Excellent response Jeff T, but if the U.S. is trying to support homeonwnership, which is a massive staple of our 62% consumer economy, when the next avalanche of foreclosures hit what will happen to personal wealth in all classes in the U.S. Remember the original question dealt with if the Government couldn't do nothing, would it have been better to give the money back to the people in the form of refinanced 20% decreased mortgages very low interest rates so 10's of millions of families would opt to keep paying their mortgages (and other debta) rather than just walk away to let the remaining tax paying nation to bail them out. And then what about after the next wave, then the next? As foreclosed homes flood the market and the nations wealth is swept away, and more an more credit is lost, and more and more banks board their doors, who will be left to bail them out? How can this chain of events be stopped? We must bring more minds to the table to discuss this!
Nothing being proposed, nor already spent, is touching the real underlying problem.
Jobs, family supporting jobs for the majority of our citizens.
First they took the good paying manufacturing jobs
Then they off shored "high tech" and accounting
Then the construction jobs crashed
Now the rest of us are feeling the misery.
Until our government SHRINKS and we start opening factories HERE, nothing is going to help.
At this point, it no longer matters what Congress spends. America is beyond broke, we entered this century over $5 TRILLION in the hole and this is just icing on the cake of misery.
I wish I could shake sense into people, but no one wants to see the truth of our future.
Bread lines, starvation and fascism. Change we keep voting for.
Just wait, we will be looking back fondly at today as a great time.
I know, I know, don't believe me. After all I'm not one of the over-educated, over-paid "experts" and politicians that got us into this mess.
I'm just a small business owner that thanks to the government bailouts is being bankrupted by my bank on a loan I've never missed a payment on .
Good luck to us all. I get the feeling that by years' end there will be many fewer of us hanging around here.
Only people with money can afford internet access.
If the mortgage company's bailout isn't helping, maybe we should bail out the mortgage holders?
But what about the people who are struggling in their rented apartments? Don't they deserve a paid-for house too?
Why don't we just give every US citizen a $100,000 stimulus check?
Because after all, consumer debt default is going to be the next big thing to blow up....
And if we do it this year, why don't we just vote in Congressmen who will pay us every year?
After all, those evil billionaires have all the money, and the government is the only entity powerful enough to give the money back to the poor folks, where it belongs....
Why so many foreclosures? Are Americans destined to be homeless?
Many Americans have refinanced their homes to payoff previous debts. I refinanced to pay off a student loan and other small debts. I do not own a credit card. I am now losing my home because the interest is making my payment to high. Along with the rising prices of food, insurance,gas, clothes. I have medical insurance but what good is it if you can't pay the deductible. Prescription drugs are outragious even with insurance. My paycheck is still the same. Mortgage companies are robbing people of the livihood. Why can't mortgages be recalulated be fit what people CAN afford.
This country is heading for a huge downfall if we are losing our homes.
The county where I live has over 400,000 homes in foreclosure. Next week is my court date, then my son and I will be homeless. There are no resources available when your credit is shot. Single parent knows what I am talking about. It's catch 22 - you make too much for help and too little to make it grow. I just want to keep my house.
Do you have a lawyer, a mortgage broker, and a money adviser, if not, you need to get one. Often it is just a single call away from knowing what you can do to help yourself in the situation you find yourself in.
Look in your telephone book under the experts all their like . These specialist people and find a free consultation with each one you talk to. Call everyone of them until you find a way to save your home. One in three Lawyers will talk to you for a free consultation if you promise them that if pursue a case against the Bank of whoever owns your mortgage.
You can do it! If not for yourself, for your kids, and do it!
2) No.
You need to change your Medical Insurance to a company without a deductible.
You need to buy a used Honda Insight or Toyota Prius to save on gasoline.
Your house is gone.
The next time you buy a house do it with a FIXED INTEREST RATE and you will be fine.
the reason your mortgage cant be redone is you signed on the dotted line to agree to the terms.... what you need to do is refinance your house at a fixed rate and see of there is someone that can help you. The only time an ARM is the best is if you plan on moving before the adjustable rate kicks in.... if only you had a mortgage lender who would have done what is best for you instead of their wallet
There are tons and tons and tons of them because people are, to put it bluntly, completely stupid when it comes to buying a house. They have no common sense and only think about the here and now. They think "Hey I can afford a 200,000 house and I only make 2500 a month." You can't do that. Banks are...or were i should say, giving just about anyone loans and credit to buy houses that people knew they couldn't afford. They would get an interest only loan or a loan where the first say 1-10 years have significantly lower payments then hit in the face with payments that are 400+ more than they are use to, so they start to get behind. They never look at what the payments are in the long run. They here "...and only pay 660 a month...."....for a 190 thousand dollar house.....Yea like that is how its going to be for 30 yeasr.
Destined for homlessness.
At the rate of America's intelligence. Yes
As far as medical insurance, if your employer offers medical insurance that doesn't work for you, there are ways to get independent insurance... we did this since my employer's offers were way too high for what we needed so we found an independent so we have the coverage we need and the payments we can afford. Just go online and look at the different companies.
Good luck with everything!
In short, they already have a house of their own and they had a house or a flip gone bad. This is particularly true in high growth areas like California and Florida where the majority of houses in foreclosures are empty.
For more info on foreclosures, and how to invest in them, I suggest reading up with a book rather than an expensive infomercial. Best book I have read on the subject can be found here: Complete Guide to Real Estate Tax Liens and Foreclosure Deeds: Learn in 7 Days by Don Sausa [isbn 0978834682]
Complaints against Nova Star Mortgage?
In summer 2005 by the time the Nova Star agent finished refinancing my sister's home, they had caused her credit to be ruined & then put her in an ARM that increased her house payment by $500 per month. By signing time, she had no option but to sign the paperwork presented. They assigned a prepay penalty for 2 yrs. Two wks ago she finds out that it was really for 3 yrs. Nova Star has since closed the office in Phx stating that he was not really a Nova Star rep. Now in Jan my sister's house payment will jump another $500 more per month. Please do not say that she should have known better. I think it's criminal that the finance insitutions took unfair advantage of individual who were just attemping to live the American Dream & own a home. I am curious to see how many other unsuspecting home buyers were ripped. Before January there just has to be a solution other than foreclosure, bankrupcy or insanity.
Have your sister review her initial disclosures such as the Truth in Lending to see if the pre-pay penalty was properly disclosed. There should have also been a Pre-payment Penalty Disclosure (separate document) that clearly indicated whether or not the loan contained a penalty and for how long. If the initial documents (ones received at application) were not properly disclosed, then she should seek the advice of an attorney as she may have a case.
******For all those stuck in sub-prime loans, your best option is to see if you can refinance through FHA. Seek the advice of a reputable lender - preferrably not the last one you used********
Approx. 1 month ago I received some paperwork stating there is a class action law suit against Nova Star for inappropriate loaning...Your sister might want to check into that...if u need more information I could probably find the class action paperwork that was mailed to me.
http://www.freedomforeclosure.com/smahon
And secondly.... everyone talks about this American Dream and owning a home. Many lenders gave people who had no business owning a home with their credit and/or income a chance to qualify. HOWEVER, bad credit and low income means higher risk and that means higher interest rates. The "teaser" rates were nothing different than Captial One Credit Card offering a 5.9% rate for six months then jumping to 24.99%. The mortgage industry offers the same thing except the idea is to get a person with lower income a way to qualify. It is still up to the borrower to make the choice if they will be able to afford these payments and to make educated choices before signing on a dotted line for a loan of hundreds of thousands of dollars. It is a chance for the borrowers to own a home with the idea that their income will increase and/or their credit scores will improve which will allow them to buy today and be in a great position down the road to refinanace. If it had not been for these Adjustable Rate Mortgages (ARM) and teaser rates, many of the people would never had the chance given them to EVER own a home. By time their credit scores and income increase, so have the values of homes making it impossible to afford.
If anything, the foreclosure market today only proves why the lenders need to keep to strict guidelines and not given anyone a chance with bad credit and poor income to ever own a home.
Not the answer people are looking for? That's tough. Facts are facts and the mortgage industry didn't set out to screw anyone. They were hoping to make a profit and still be in business..... but of course, over 135 lenders have closed their doors in the last 12 months because they gave people a chance to own real estate and experience the "American Dream". Now these lenders are closed and in Bancruptcy... who is living the dream now?
Also, see if there is a consumer protection agency in your state that can help you find out where to file a complaint against this broker. They may have resources as to where your sister can go to refinance.
Finally, call a real estate lawyer to ask him or her what your options are. Some of them will talk to you for 15 minutes for free just to point you in the right direction.
Another idea---write to your congressperson. Your sister's problem is a serious national issue and his or her office may be able to help you too.
I cant sell my land or condo in tampa florida?
I cant sell my land or condo in florida..market is terrible. Hence the pain of making these mortgage payments. I'm barely making it. Paycheck to paycheck. Whats worst is the interest only payments on my condo. I live in it. But big deal. Not building equity and cant refinance either--- too costly. I will never buy property again! Everyone talks about how great it is to own property? Where are perks?? Both properties are cash cows eating away at my savings. Im better off renting and getting rich. If I would have stayed renting I would have saved 50k in the bank! Now instead, im just 150k in debt! Home ownership isnt the American Dream. Its the american nightmare. When you are making mortgage payments the bank owns it. They are just waiting for you to foreclose.
Renting is the greatest! I wish i was a renter again!..No more taxes, association fees, maintenance, and Insurance costs! What a waste of money. I need help.
Dont know what to do. Need help.
If you bought a home/condo on an interest only mortgage and you could barely afford the payments it sounds to me like you bought a home that was too expensive of a home for yourself. Homeownership can be a wonderful experience when you are not stretching yourself so thin financially that you have to live paycheck to paycheck. Unfortunately property in Florida hit a big bubble quickly because of the ridiculous appreciation levels that were happening down there. Everyone saw this coming except for those buying up real estate thinking they were going to make sooooo much money so quickly because of the 20,30 and 40 percent appreciation rates in Florida. Now everyone is stuck with property that is overpriced and they are having a hard time selling . You are not alone down there in Florida as this same situation is arising everywhere. Trust me the bank is not just sitting back waiting for you to miss some payments so they can foreclose on the home. They are going to lose a lot more than you if they have to foreclose on your property. That is the last thing that they want. My recommendation to you is to put your home and you land up for sale immediately if they are not already up for sale. Find a Realtor that is knowledgeable in the area of "short sales" and have the Realtor contact your bank about having them agree to letting you do a short sale on your property. A short sale is where the bank will agree to accept less than what you owe on the home, if you are unable to get enough to cover your mortgage. Obviously, there are limitations to what they will accept and once you have a bid you can make your request for the short sale from your lender. Best of luck and I hope it all works out for you soon.
Those who were naive enough to think that the bubble would never burst are now paying the price.
You are now in a very ugly situation. Your options are to continue paying or to let the lenders foreclose the property. If you choose the latter, good luck finding a place to rent with a badly tarnished credit history. And next time, assess your financial moves a bit better before jumping off the bridge without a lifesaver handy.
As far as renting, it does serve a purpose but does not build any kind of equity or wealth. I understand that you got burned in purchasing, but you've learned a valuable lesson the hard way! It won't happen to you again because the knowledge you've gained has opened your eyes to the bigger picture of real estate investing. Best of luck to you!
Why don't Americans get to avoid foreclosure as part of the Bailout plan?
I know i am naive and not a financial whiz, but if we are going to be buying subprime mortgages at lets say 50 cents on the dollar, couldnt we refinance peoples houses at lets say 60 cents on the dollar. They get to keep their homes, the foreclosure rate does not go up, home values do not go down and the government gets to make a 20 percent profit. What all am i missing?
You're missing the fact that the bill is designed to bail out financial investment firms and banks -- not actually provide help to the people who are unable to pay their mortgages. The politicians realize that, because of decades of government policies and corporate subsidies, it is doubtful that many of the people who received subprime mortgages will ever be able to pay them back.
Thus, the only option they are considering now is stealing the last little bit of disposable income middle and lower class America still retains and handing it over to the banks.
Also, many of these bad mortgage securities were sold to hedge funds, pension funds, and other investors around the world. They are not happy we sold them a bunch of garbage and are demanding we buy them back from the foreign banks. Part of the $700 billion is going to be used for this purpose, especially since we still need to borrow billions of dollars every day just to run our government and our economy.
Providing help to homeowners in foreclosure? That would require politicians who care about their constituents, rather than the banks and foreign donors who really finance their campaigns. People can always just be tricked into voting for someone over and over again based on party identification. If the Chinese stop lending money to the government and buying up our Treasury securities, then we'll have real problems.
Your proposal only makes sense from the perspective of the American economy and homeowners. Look at it from the perspective of the richest banks and foreign investors and you'll see that stealing $700 billion of our money is necessary to keep the charade going a little longer (until the next bailout is required).
Hope that helps.
ForeclosureFish
Would you be more confident about the economy if?
the following proposal was made by one of the candidates and by Bush?
1. Instead of bailing out the big banks, let them fail. They sowed the seed and they must reap the harvest.
2. Instead of sending the money to those big banks, how about sending the money to our smaller home town or city banks so they can loan it out to mainstreet businesses and other citizens for expansion, hiring new employees, buying a car, a new TV buying a house, home renovation, farm input expenses like tractors, trucks etc.These loans would be based on good loan practices with adequate collaterole but would be given at a low rate of interest. No sub prime loans.
3. A law would also be put into effect that all people who are caught in the sub prime problem could have their homes refinanced at the original low rate and have the length of their mortgage moved out so their monthly payments would be manageable. They would still be responsible for the entire amount that they originally borrowed but would have much longer to pay it off. They made their decision and like any good American should take responsibility for their debt...good or not. For the empty houses or for those houses that do not take the extended loan option, turn them over to the realtors and let them sell them at the current value.
Finally, let wall street come back by itself. If main street is happy, they will start to invest quickly to take advantage of the lower prices.
That would be my ideal candidate. I don't see that person this time around. However, Obama is the closest.
How does everyone feel about what the article below addresses.?
This has been coming for a long, long time. I first read about it almost 10-months ago. It was supposed to have been in place by the end of last year but did not make it.
As far as what I think about it, what choice do we have except to sit back and see how it works. One of the largest problems we have in the world of finance is that there is so much of a difference in the three scores. At least this will eliminate this problem.
american home mortgage refinance - News
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Americas Watchdog Endorses American Interbanc As The Best Mortgage ... - PR Web (press release) Americas Watchdog Endorses American Interbanc As The Best Mortgage Typically if not always, American Interbanc has the best interest rates available to homeowners, or consumers wishing to buy, or refinance a home. |
Investors Look to Obama Mortgage Plan - Forbes
NECNInvestors Look to Obama Mortgage Plan Government-controlled Fannie Mae (nyse: FNM - news - people ) and Freddie Mac (nyse: FRE - news - people ) could be enlisted to refinance or subsidize loans McCain derides stimulus, Obama's cabinet choices and Arpaio
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Major banks suspend home foreclosures - Bizjournals.com
ABC NewsMajor banks suspend home foreclosures Washington Mutual Inc., one of the nation’s most active mortgage lenders, merged into Chase in September. WaMu had 40 offices in Colorado. • Bank of America JPMorgan, Citigroup suspend foreclosures Business Courier of
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America's New Housing Problem: Unemployment - Forbes America's New Housing Problem: Unemployment While home prices were on the upswing, an unemployed borrower could sell the property or refinance, raising cash, but now, with property depreciating, |
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Operation HOPE Mission to Deliver Practical Financial Literacy ... - SYS-CON Media Operation HOPE Mission to Deliver Practical Financial Literacy HOPE Partners in support of the Mortgage HOPE Crisis Hotline include Bank of America, HSBC, US Bank, Wells Fargo, State Bank of India, First American, |
