“Pay-option mortgages” are loans in which homeowners can choose to pay the interest or even just part of the interest on their mortgage each month. If they do this, the unpaid interest is added to the principal resulting in a mortgage that actually grows over time.
subprime meltdown
Fed Chairman Asks Banks To Forgive Mortgage Debt
By 3.4.08
Fed Chairman Ben Bernanke is urging lenders to “forgive portions of mortgage debt held by homeowners at risk of defaulting,” says Bloomberg.
Subprime Meltdown As Told By Stick Figures
By 2.25.08
If, despite the news telling you every day, you still don’t understand how the subprime meltdown happened, perhaps this stick-figure slideshow will help. If even flatlanders can’t see through these scams, what hope is there for the rest of us? Warning, uses naughty words.
The Administration's New Subprime Mitigation Plan: Take 30 Days To Pack Your Bags
By 2.23.08
The compassionate conservatives helming our government have an ingeniously simple new plan for homeowners facing foreclosure: take 30 days, pack your bags, and then get the !@#$ out.
Consumer Confidence Plunges To Recession Levels
By 2.15.08
Reuters says that consumer confidence has plunged to levels associated with the recessions of the ’70s, ’80s, and ’90s.
The Reuters/University of Michigan Surveys of Consumers index of consumer sentiment dropped to 69.6, the lowest reading since February 1992, and below analysts’ median forecast for a preliminary reading of 76.3.
Mortgage Meltdown Isn't Just A Subprime Problem Anymore
By 2.13.08
The New York Times says that the mortgage meltdown isn’t just a subprime problem anymore, but has spread into the prime market where consumers with good credit are now struggling to pay their bills.
By 2.11.08
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If you’re late on your mortgage payments, Countrywide may have a new workout program for you. You don’t need to have a ARM. Call them! [MarketWatch]
Subprime Meltdown Makes Foreclosure Websites Great Places To Shop
By 2.9.08
If you’re ready to buy a home and don’t mind a little ghoulish bargain-hunting, now is a great time to hit the various foreclosure sites online, reports Reuters.
Mortgage Brokers Demand Higher Down Payments From Borrowers In Risky Zip Codes
By 2.2.08
Prospective home buyers may need to pony up more cash up front to secure a mortgage if they are looking to buy in one of hundreds of zip codes that lenders now consider “soft markets.” Countrywide and GMAC recently ranked over 1,000 zip codes on a risk scale of 1-5. Lenders to moderate risk zip codes, ranked 1-3, may require borrowers to pay an additional 5% down payment. Unlucky buyers in high risk zip codes, ranked 4 or 5, are now automatically required to put down the extra 5%.
By 1.30.08
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Swiss bank UBS loses $18 billion in the subprime mortgage market. Hi ho. [BusinessWeek]
Fed Cuts Rate 1/2 Point To 3%
By 1.30.08
Financial markets remain under considerable stress, and credit has tightened further for some businesses and households. Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets.
FBI Starts Investigating The Entire Mortgage Industry
By 1.30.08
The New York Times says that the FBI has begun an investigation that includes almost the entire mortgage industry—from the lenders to the brokers to the Wall Street banks who packaged the loans as securities. They’re cooperating with the SEC and wouldn’t name which firms they’re targeting, but the Times said that it includes 14 companies.
Exciting New Service Helps You Walk Away From Your Mortgage!
By 1.30.08
You will immediately know the exact amount of days you have to live in your house payment free. We stay on top of your walk away plan and keep you up to date with weekly progress emails. We also will notify you if the lender is taking longer than expected subsequently giving you more time in your home payment free.
It’s like a spoof, except real!
Record Decline In U.S. Home Prices, Foreclosure Filings Up
By 1.30.08
The already troubled housing market is just getting worse says the latest report from S&P Case/Shiller. The 10-City Composite’s annual decline of 8.4% is a new record low for the index, which started recording home prices in 1987.
Appraiser Says Washington Mutual Blacklisted Her For Not Inflating Property Values
By 1.28.08
A Californian real-estate appraiser is suing Washington Mutual, saying she was blackballed after refusing to to give artificially inflated property value estimates.
…last May, according to the suit, a WaMu manager upbraided her for describing local property values as “declining” in an appraisal. The manager insisted that Wertz “change her report to indicate ‘stable’ conditions so that the loan could be approved.”
By 1.28.08
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Countrywide’s CEO is eschewing a $37.5 million severance package as he leaves the company that profited torrid billions during the housing bubble, sometimes through duplicity and reams of questionable fees. After all, there’s only so many gold-plated Rolls Royces one can drive. [Reuters]
New York Expands Countrywide Class Action Suit
By 1.26.08
Today, New York City and state expanded their class action lawsuit against Countrywide Financial Corp. to include two more company officers, twenty underwriters (including big investment banks like Goldman Sachs, J.P. Morgan and Merrill Lynch), and two accounting firms. “We will pursue every avenue to ensure that those who defrauded investors are held accountable for their actions,” said the NYC Comptroller.
When A House Is A Bad Investment, Is It OK To Just Walk Away?
By 1.24.08
Here’s one that’s sure to start some intense debate: If you’ve made a bad investment and your house isn’t worth what you thought it was going to be, is it OK to just walk away?
