City Attorney Michael Aguirre plans to file similar lawsuits against Washington Mutual, Wells Fargo and Wachovia in an effort to make the lenders negotiate with mortgage borrowers facing foreclosure.
“We would like to see
Housing markets across Southern California, including the city of
“We haven’t seen the lawsuit and can’t comment,” Bank of America spokeswoman Shirley Norton told Reuters.
Filed under California by Luke Ford
RENEGOTIATING MORTGAGES Part of the bill is devoted to the creation of a program that may allow some people to cancel their old mortgage loans and replace them with new fixed-rate loans lasting at least 30 years. You need to have originated your troubled loan or loans on or before Jan. 1, 2008. Vacation homes and investment properties are ineligible. If you manage to get a new loan, you cannot take out a home equity loan for at least five years after you get the new mortgage. If you earn a modified adjusted gross income of more than $75,000, or $150,000 if you are married and filing your tax return jointly, the credit starts to phase out. That makes this more like an interest-free loan than a true credit. The tax credit is retroactive to home purchases on April 9, 2008, and expires on July 1, 2009. If you purchase a home from Jan. 1, 2009 to June 30, 2009, you can claim the tax credit on your 2008 tax return.
You can now take an additional federal tax deduction of $500, or $1,000 if you are married and filing your tax returns jointly. Since itemizers are often people who pay a lot of mortgage interest, this deduction will generally benefit people who pay little or none, like those who have paid off their mortgages entirely or close to it. REVERSE MORTGAGE CHANGES Reverse mortgages allow older Americans, generally 62 and older, to get a lump sum or a monthly check that comes out of their home equity. First, it limits origination fees on reverse mortgages at 2 percent of any loan up to $200,000 and 1 percent beyond that, up to a maximum of $6,000.
Under the new bill, Fannie and Freddie have permanent authority to buy bigger loans in areas with high housing costs. (Temporary measures allow them to buy bigger loans, but those expire on Dec. 31.) They can buy loans up to 115 percent of the local median home price, though they cannot buy any loans larger than $625,500. Any larger loan will generally be a jumbo loan, which will cost more in interest.
Filed under Politics by Luke Ford
WASHINGTON — The House approved far-reaching government assistance on Wednesday for the nation’s housing market, including broad authority for the Treasury Department to protect the nation’s two largest mortgage finance companies from collapse.
The measure also includes an aggressive plan to help hundreds of thousands of troubled borrowers avoid foreclosure by refinancing their mortgages with more affordable government-insured loans.
The White House, citing an urgent need to restore market confidence in the two mortgage giants, Fannie Mae and Freddie Mac, said President Bush would sign the measure despite his opposition to the inclusion of nearly $4 billion in grants for local governments to buy and refurbish foreclosed properties.
The House approved the bill 272 to 152, with just 45 Republicans joining 227 Democrats voting in favor.
Lawmakers and experts described the legislation as a landmark shift in the government’s role in the housing market, extending a helping hand to both Wall Street and
The bill authorizes the Federal Housing Administration to insure up to $300 billion in refinanced loans for homeowners at risk of foreclosure, aiming to help as many as 400,000 homeowners trade expensive adjustable-rate mortgages for more affordable 30-year fixed-rate loans. The bill creates a permanent affordable housing trust fund that will initially help pay for the mortgage refinancing plan and eventually sponsor the creation of rental housing for Americans too poor to buy homes.
The bill also grants authority for state and local housing agencies to issue $11 billion in tax-exempt bonds to refinance bad mortgages, calls for stricter oversight of mortgage brokers and sets new disclosure requirements to make loan terms more transparent.
Mr. Bush has long supported tighter regulation of the mortgage giants.
Filed under Politics by Luke Ford
AP: A Taunton woman fatally shot herself soon after faxing a letter to her mortgage company saying that by the time they foreclosed on her house that day, she would be dead. The police said the woman, Carlene Balderrama, shot herself Tuesday, after faxing the letter at 2:30 p.m. The mortgage company called the police, who found Ms. Balderrama’s body at 3:30 p.m. The auction was scheduled to start at 5 p.m. and interested buyers arrived at the property in Taunton, about 35 miles south Boston, while Ms. Balderrama’s body was still inside, said Chief Raymond O’Berg of the Taunton Police Department. Neighbors said Ms. Balderrama, 53, her husband and her son had lived in the house for about four years.
Filed under Articles by Luke Ford
Can the bad news for banks get any worse?
After the last week brought another round of woeful quarterly results from the industry, capped by news on Tuesday of multibillion-dollar losses at the Wachovia Corporation and Washington Mutual, that question is nagging banking executives and their investors.
Shares of Washington Mutual, rose 6.2 percent as that company reported a $3.3 billion loss. SunTrust Banks of
Banks are pulling back. “We’ve gone from a credit crisis to a credit crunch,” said Ed Yardeni, chief investment strategist of his own research firm. The recent bath of bank results underscored that many borrowers are in trouble already. Plunging home prices, particularly in
The problems extend beyond well beyond housing. Delinquencies on auto, credit cards, and home equity loans have worsened across the industry. Commercial loans may be a ticking time bomb. Bank of America showed a sharp increase in charge-offs related to small business loans this quarter. But bigger companies are increasingly squeezed.
Filed under Banks by Luke Ford
WASHINGTON (AP) –President Bush dropped his opposition Wednesday to a broad housing package aimed at bolstering the sagging economy, despite his objections to including $3.9 billion for neighborhoods hit hardest by foreclosures. Under the bill, the government would help struggling homeowners get new, cheaper loans and would be allowed to offer troubled mortgage giants Fannie Mae and Freddie Mac a cash infusion.
The Bush administration and lawmakers in both parties teamed to negotiate the measure, which pairs Democrats' top priorities — federal help for homeowners facing foreclosure and $3.9 billion for devastated neighborhoods — with Republicans' goal of reining in mortgage giants Fannie Mae and Freddie Mac while reassuring financial markets of their stability.
White House press secretary Dana Perino announced Bush's switch in a telephone conference call with reporters. The measure hands the Treasury Department the power to extend the government-sponsored mortgage companies an unlimited line of credit and buy an unspecified amount of their stock, if necessary, to prop up Fannie Mae and Freddie Mac, two companies chartered by Congress. The bill would let hundreds of thousands of homeowners trapped in mortgages they can't afford on homes that have plummeted in value escape foreclosure by refinancing into more affordable, fixed-rate loans backed by the Federal Housing Administration. The bill sets a cap of $625,000 on the loans that Fannie Mae and Freddie Mac may buy and the FHA may insure.
Filed under Politics by Luke Ford
When Fannie Mae and Freddie Mac's stock prices plunged and rumors of their insolvency swirled, the presidential campaigns of Sens. John McCain and Barack Obama released terse statements about the mortgage giants, then went nearly silent.
Rick Davis, McCain's campaign manager, was president of the Homeownership Alliance, which advocates the expansion of homeownership through low-interest mortgages funded by Fannie and Freddie. Arthur B. Culvahouse Jr., who is heading McCain's vice presidential vetting panel, was a lobbyist for Fannie Mae. Mark Buse, a longtime McCain aide, lobbied for Freddie Mac before returning to McCain's Senate staff.
Alberto R. Cardenas, one of McCain's top fundraisers, has lobbied for Fannie Mae, as have former
Maria Echaveste, a top Clinton White House official whose husband, Christopher Edley Jr., is a close Obama friend and adviser, has lobbied for Freddie Mac, and former commerce secretary William M. Daley, a top Obama backer, was an in-house lobbyist.
Jamie Gorelick, a deputy attorney general in the
That payroll has cost Fannie and Freddie nearly $200 million in lobbying and campaign contributions over the past decade, according to lobbying reports and Federal Election Commission disclosures. Fannie Mae and Freddie Mac grew huge and powerful by buying up home mortgages and consolidating them into fixed return bonds and other financial instruments with the implicit backing of the Treasury. Douglas Elmendorf argued that federal loans will minimize the personal risks to Fannie and Freddie managers and shareholders, while leaving taxpayers with all the risk.
Filed under Politics by Luke Ford
"Hopefully it will stabilize investor confidence and enable the (loan) providers to play their role." says Allen Fishbein, director of housing for the Consumer Federation of America.
Fannie and Freddie don't make loans directly to consumers, but they play an important role in the housing market. They purchase mortgages from lenders, and also repackage those loans as securities that are sold to investors.
Jay Brinkman, vice president of research and economics for the Mortgage Bankers Association, says: "The good news is there is no change for consumers. If you have pretty good credit, you should have no problem getting a mortgage."
Mike Schenk, senior economist for the Credit Union National Association, says the Treasury plan "confirms that the government would step in and provide liquidity."
The Fannie Mae/Freddie Mac saga and seizure of IndyMac Bank by federal regulators on Friday may have an impact on consumer confidence, Schenk says. Recent headlines could scare potential buyers, especially first-time home buyers, from making purchases.
Filed under Politics by Luke Ford
From Dale Mayer's The Home Mortgage Book:
* Renting allows you more geographic flexibility. A rental lease is shorter and more finite than a mortgage.
* When you rent, you usually don't have to worry about maintenance.
* You don't have to pay property taxes.
* You don't have to worry about property values.
* Average monthly rent is less than a mortgage payment.
Product Description
Finding and arranging the best mortgage for your dream home purchase can be a confusing and daunting experience. With so many mortgage offers to choose from, you will want to be sure that you are getting the best loan and rate for your particular circumstances. Buying a new home can be an ominous process, whether it is your first or your tenth. It is definitely not something that you do everyday, but finding that perfect mortgage loan at the best rate does not have to be a difficult task. The best defense against feeling overwhelmed is to become informed, and with the help of this new book the process will become easy. You will learn how to find the best opportunities, how to negotiate, how to get the type of mortgage loan you need; how to calculate how much you can afford, understand the true cost of a mortgage and your capacity to repay, how to pre-qualify, understand the lending process, and analyze various mortgage products. With this book, you will understand financing, budgets, needs and wants, credit reports, home-buying timeline, the process of building a house, manufactured homes, negotiating with lenders, using the Internet to get the best rates, credit reports, home-buying timeline, construction loans, manufactured homes, real estate and mortgage glossaries, setting values, home warranties, homeowners insurance, creative financing, buying with little or no money down, closing and settlement inspections, legal contracts, mortgage agreements. You will know what you can afford, which government agencies can help, considerations for veterans, calculating monthly payments, and escrow. This comprehensive resource contains a wealth of modern tips and strategies for financing and closing on your house. The author shows readers how to find out how much they re really worth, how to uncover unknown assets, and how to enhance credit ratings within six months. It provides information and suggestions on everything from no-down-payment mortgages to finding the right mortgage agent. Though you may be relatively cash-poor or have a less-than-perfect credit rating, now you can find the house you ve always wanted and acquire a favorable mortgage.
Charles Moyer writes on Amazon.com:
efore you start into the home buying process, buy this book. Right from the beginning Dale Mayer spells it out: "…purchase of your dream home can be a confusing and daunting experience." In an easy, explaining style Mayer leads you through the experience, leaving you informed and with eyes wide open.
Many books on such a complex and life altering event like home purchase, tend to either stray on overwrought details for particulars that are beneficial to only a few or deal in cliché or shallow descriptions and glossed over details that end up being no help at all. The Home Mortgage Book has balanced a readable and informational tone with an obvious knowledge and logical sequence that will help anyone, but particularly novices in the mortgage process.
Mayer has done his research and offers honest and valuable tips that will save the home owner money not only on their initial purchase, but in managing the financial responsibilities and challenges over the life of the mortgage. His suggestions around PMI insurance, refinance guidelines, and peculiarities between Reverse Mortgage, Second Mortgage and HELOC more than pay back the investment in this book.
More than just a mortgage book, there are tips and worksheets for financial analysis and a blunt discussion on wants versus needs in your home features and options selections. Additional sections on managing your credit, the case for renting and doing research and obtaining advice go a long way to avoiding "buyer's remorse" and leaving you secure and happy as a homeowner.
TERRENCE MCELHANEY WRITES:
Buying a house can be so exciting particularly for a first time home buyer. The idea of actually owning one's own piece of land is incredible. However the process and the complexities of mortgages can be a confusing headache at best. The Home Mortgage Book is a really good book for getting rid of some of that confusion.
This book breaks down the mortgage process step by step. Elements beyond just the mortgage payment like escrow and mortgage points are explained. The Mortgage Book doesn't just explain mortgages but explains the entire process of buying a house. The reader learns how what to look for when inspecting a house and how to determine what type of home is right for them.
When buying a house there are so many decisions to make. Several times throughout the Mortgage Book the author helps the reader make a decision by weighing the advantages and disadvantages of that choice. Should one buy a manufactured home or not? Should one use a bank or mortgage company? Should one get a fixed or adjustable loan? The reader isn't told what to do but just given more information in order to make an informed decision.
Even if one isn't buying a house right now, it's a good book. This is simply because everyone needs to at least know what the mortgage process is like. This is just good information that every adult should know. Also if a reader has less than perfect credit, tips are given on how to improve credit. So that when one is in the market to buy that first home he or she can be knowledgeable about what to expect.
Overall this is a great book for the first time home buyer. The language is simple and thorough explanations are given without bogging the reader down in too many unnecessary details. This book is a really good idea for someone in their twenties who may have just graduated college or newlyweds wanting to start a family. Even if you're not buying a house at the moment it's just good information to know.
FROM MIDWEST BOOK REVIEW: "Finding and understanding the best mortgage for a dream home can be a confusing experience; but with this book the process will be easy, making it a fine beginner's pick for public libraries and collections where introductory real estate investing is a hot topic. Modern strategies for financing and closing on a house tell how to uncover unknown assets, enhance credit ratings, understand lender requirements and timelines, and more. Other books of course give some of this information, but this title's expansive subjects and approaches make it a top recommendation."
JAMES CORNALL WRITES:
While this book is primarily about mortgages, it would be wise to point out that it, in fact, covers everything from the moment that someone decides that they're going to buy a house. And, as such, it's a great step-by-step guide to the entire process.
In fact, some of the introductory chapters, on considerations before taking the plunge are as valuable, if not more, than the more detailed banking and mortgage chapters.
The style of writing is very factual and clear, which makes it useful reading, but, at times, a little dull. However, it's good, relevant, information, and comprehensive, so it's only a minor irritant.
A better title - or sub-title - for the book might have been something along the lines of "So you want to buy a house? A step-by-step guide from decision making to mortgage." Actually, the book's title doesn't even come close to doing the book justice, it's a guide for every step of the home-buying process, and, as such, has to be regarded as a very useful - if not essential - book.
The information on every step of the process is top notch, and the tables and charts invaluable. This could easily be the homebuyers' Bible.
While not many institutions would necessarily want the customer to be totally informed about the entire process, it would be good if the first step in anyone buying a home would be the compulsory purchase of this book. It's that useful.
With the financial world and mortgages under scrutiny, it would be wonderful for all considering buying a home to save themselves a lot of potential problems - and a lot of money - by first investing in this book.
BOBBI WRITES:
Location, location, location - the three most important things when buying a home, right? Well after reading The Home Mortgage by Dale Mayer I learned that there are many factors that play an important role in your new home purchase, and location, is just one of them. This book provides information your banker and broker don't want you to know, but reading it will provide you with an insider's guide so you can make informed decisions and alleviate some of the anxiety that goes along with buying a house.
It goes through all of the stages including researching neighborhoods, hiring a home inspector, escrow, property taxes, and the purchase agreement; and helps the reader recognize that a realistic approach to what they can afford is best. This book even gives you the pros of renting versus buying, tips on how to improve your credit rating, and ways to reduce your debt. And if that weren't comprehensive enough, Dale Mayer even throws in a history lesson on mortgages.
The Home Mortgage is the book you'll want to keep with you when going through the entire home buying process; it includes invaluable resources like government web sites, on line calculators, worksheets, credit counseling services, and even a glossary to help with those confusing terms.
Gary Eldred writes in his new book:
The best source of financing for your home is the seller. If you can persuade the sellers to help wiht your financing, you can often get easier qualifying and lower costs.
In today's complex marketplace, sellers and buyers don't always see the opportunity. That's why innovative sales people need to bring owner-will-carry (OWC) into the mix of financing possibilities. You make sales happen when you know how to encourage sellers to offer the carrot of seller financing.
Seller-assisted financing offers easier qualifying, flexibility, lower closing costs, less paperwork, and quicker sales.
Here are ways you can get gouged on a mortgage:
* Garbage fees
* Bad faith estimates of closing costs
* Undisclosed prepayment penalties
* Misleading assumption clauses
* High cost, "no cost" loans
* Lowball rate quotes
* Oversized yield-spread premiums
* Flimsy rate locks
* Lowball/highball appraisals
* Deceptive advertising
* Conspiracy to commit fraud
Seller financing can be a very useful tool in bringing buyers and sellers together to close a deal. Not only used by the late-night info-commercial creating-wealth-with-no-money-down genre, seller financing is also a very viable mainstream option to help sell real estate.
As a second mortgage, seller financing has typically been used to bridge the dollar gap for a home buyer between the amount of the fist mortgage and the down payment that he or she has available. It has also been used as wraparound financing (new financing that wraps around existing financing). But seller financing can also be used in the first lien position. Some of the major advantages include a substantial savings in closing costs for both buyer and seller. The parties can also negotiate the interest rate and the repayment schedule, as well as other conditions of the loan. The seller could also possibly negotiate a higher interest rate than could be received on other types of investments. A higher selling price could also be obtained as compensation for assisting the buyer with financing. The seller could screen the buyer for creditworthiness and the ability to pay, and could also require the buyer to purchase a PMI policy to protect the seller against default. The seller could also choose which security document (mortgage, deed of trust, land sales document, etc.) to best secure his or her interest until the loan is paid.
The buyer could make payments faithfully, but the seller might not make payments on any senior financing that may be in place, thus subjecting the property to foreclosure. The seller could also agree to a small down payment from the buyer to assist in the sale, only to have the buyer abandon the property because of the minimal investment that was at stake.
In short, a seller-financed sale can be good, as long as it is good for both parties. The concerns of buyer and seller must be addressed during negotiations.
Filed under Books by Luke Ford
