Equity Talks

Principal Writedowns + Help for Unemployed Homeowners: HAMP and Making Home Affordable Guidelines updated today are sounding pretty progressive: The much touted PR on Principal Write downs is being implemented by the first subscribers to this. If the idea of lowering your loan balance has any goodguy points be aware that citizens will be paying for this via more bailout funds or taxes. Supporting the collective good is after all what our democracy stands for. Which Banks?  Unfortunately, the major banks still standing have inherited many bad loans: Pay Option ARMS, and assorted Sub Prime loans i.e., loans famous for exploding one's principal balance or rate and payment when they adjust. Many of these loans were sold to people who simply did not understand ther terms or qualify for the full principal and interest payments. To the embarassment of some brokers and banks, these loans financed a rash of predictable defaults. So what is a lender holding so many bad loans to...

Making Home Affordable 105% Loans were introduced just this spring and the program has simply not been meeting the public need. Homeowners seeking to refinance their Fannie Mae or Freddie Mac Mortgages quickly found that the new 105% loans were helping a minority of people teetering on the edge of collapse. While it may seem obvious to people in trouble, here is why the limit was increased to 125% last week. Many homeowners simply cannot meet the required 33% debt to income limits necessary to refinance their loans due primarily to a job loss or cutback or other change in their financial situation. You see, many people purchased or refinanced their homes with much higher housing ratios: in many cases over 45%. So unless your income went up, the chances of a lower ratio will be slim even with a fixed interest rate. A careful look at the rates on the much touted 'DU Refinance' Programs our lenders are offering are just not so hot. Given you have to be in 'financial dist...