Archive for October 1st, 2008
Mortgage Refinancing Versus Loan Modification – By Bryan Dornan
Posted by: | CommentsAlright – Raise your hand if you have the ability to pay your mortgage payment each month, but you stopped making your payment in hopes of lowering the interest rate on your current home loan. How many of you have stopped paying your mortgage because one or more of your neighbors reduced their interest rate and lowered their payments? If you raised your hand, you are not alone, because thousands of good credit borrowers who have not suffered from income loss have stopped making their mortgage loan in hopes of receiving quick payment relief.
Home refinancing activity has almost come to a complete stop. FHA refinance loans remain the only bright light for mortgage lenders and brokers, but even the government refinancing has slowed in recent months. Interest rates dropped almost half a percentage point yet refinancing activity reports indicate little increase. Once we get past the foreclosure crisis we expect mortgage refinancing activities to elevate back to normal levels.
Modifying your mortgage is just but those of you who have a stable job, we recommend not taking the approach of not paying your monthly payment in hopes that it will send a signal to the bank that they better modify your mortgage or else…Millions of homeowners are in line to get their loan modified and banks are clearly doing their best to accommodate homeowners with payment vacations and reduced mortgage rates.
Pay your mortgage on time if you can afford your monthly payment because keeping your credit score high is imperative to maximize your future home financing options. When the banks report you 30, 60 or 90 day late on your home mortgage it has a lasting derogatory effect on your credit score. Besides, banks do negotiate loan modification with homeowners who are not late. Times have changed and bank negotiates with homeowners who make their payments on time.
Raising FDIC Insurance to $250,000 Good for America – by Bryan Dornan
Posted by: | CommentsRaising the FDIC insurance from $100,000 to $250,000 is long overdue. Adding this FDIC guarantee in the new revived Mortgage Bail-Out Bill is good for business, good for homeowners and good for America. Why hasn’t it been increased in the last 30 years with rise of inflation? Most financial experts would point towards the fact that this is by far the most significant financial crisis since the great depression.
The Chinese define a crisis as a danger and an opportunity. Since we have been borrowing billions of dollars from China, maybe we should heed their language and take this opportunity to rebuild a stronger, bolder more pragmatic financial system that will bolster our economy for future generations.
The mortgage markets need more confidence and they should start with better underwriting of home loans. Stated income loans should only be allowed with strong compensating factors like credit history and assets. FHA has always gotten the underwriting end right and that is why most Americans are turning to FHA mortgage loans for home-buying and refinancing.
Raising the FDIC insurance to $250,000 is the right thing to do and Congress needs to step up their efforts to get something done that is good for business and good for the tax-payers. Whether or not the politicians look good in the process should not be our concern. Then again…it is an election year.
