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Looking for a mortgage? You might want to consider an FHA loan. The New York Times says, “The Federal Housing Administration used to be known as a place for low-income borrowers with tarnished credit histories. But now, it has become a destination for borrowers whose credentials are respectable, but not stellar.” [NYT]
60 Minutes recently took a look at World Savings Bank, the acquisition that ultimately wounded Wachovia so badly that it had to be acquired by Wells Fargo. What was wrong with an institution for which Wachovia was willing to pay $25 billion? Well, one whistleblower claims that World Savings was engaged in fraud and predatory lending — tricking its customers into signing up for dangerous “option-arm” or (as they cheerfully called them) “pick-a-payment” loans.
We’ve written about this before, but as more and more people face foreclosure (last year’s foreclosures totaled 2.3 million, according to the AP) its a good time to remind people of this strategy.
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Treasury Secretary Timothy Geithner has announced a new website, financialstability.gov, to increase transparency in the financial stability program.
Our sister publication, Consumer Reports, put together some video interviews with people who, for one reason or another, are facing foreclosure. They are the human side of this financial meltdown.
Bloomberg says that Fannie Mae will loosen standards for refinancing in the hopes that more homeowners will be able to take advantage of historically low interest rates.
Over 100,000 people have been laid off by banks, but 9 in 10 executives at banks that accepted bailout money are still working says the Associated Press.
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Here’s a resource to help you determine whether your library lends digital media such as audiobooks and ebooks. It also helps you locate other libraries that offer digital lending. [Overdrive] (Thanks to jojo319!)
Meet Scott. When builders in financial trouble stopped paying him the money he was owed as a brick and stone contractor, he became desperate. He needed a loan to buy him time while he tried to collect the money he was owed. Thinking he understood the risks, he used his wife’s 2004 Ford Expedition to get an auto title loan of $2,000 at an interest rate of 25% per month — or 300% APR.
Vikram Pandit, CEO of Citigroup, announced today that the company would be split after reporting a net loss for 2008 of $18.72 billion. He also promised to put the money from the $700 bailout to work by extending credit to consumers and businesses… responsibly.
Ever heard of a cramdown? It’s when a bankrupcty court splits a home loan into two parts: a secured loan that’s equal to the current value of the home, and an unsecured loan that covers the rest of the outstanding debt. The secured loan is paid, and the unsecured isn’t. It can result in lower monthly payments (if the new loan amount is amortized over the course of the loan), but the important part is that it helps guarantee that a significant part of the loan will still be paid off.
The credit crunch is affecting all of us differently. Right now its affecting Nick as he sits in a hotel 3,000 miles from home.
With so many people facing foreclosure these days, it’s a good idea to educate yourself about the types of scams that take advantage of folks who are having trouble paying their bills. Even if you are doing ok, perhaps you can help someone else by recognizing a scam.
The New York Times has an article detailing what promises to be the next fun financial crisis — credit card debt! Apparently, credit card companies have only just now realized that you people are broke! Whoops.
Countrywide either doesn’t know, or doesn’t care that reader Graham has a fixed rate mortgage, because they keep sending him “notices” that his mortgage is about to “adjust.”
Reader Michael has some questions about how the credit crunch is affecting private student loans. Is anyone still lending?
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