December saw one of the highest amount of loan applications in decades. But in the recent months, with credit tightening and a slow but steady increase in interest rates loan applications have fallen dramatically. To top it off now credit is becoming even tighter than before. Not many people see it letting up…at least not any time soon.
“In its latest survey of loan officers, the Fed reveals that the percentage of banks that tightened their lending policies on both consumer and commercial loans fell during the fourth quarter as compared to the previous quarter.” Read more about the article that reports the banks’ credit, or lack thereof.
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It appears that Freddie Mac’s chief executive Richard Syron dismissed initial warnings of the impending mortgage mess and real estate crisis at hand. Had the warning resulted in some sort of action, he may have been able to protect Freddie Mac from the current problems it is facing. But can we really blame him? (more…)
It appears that the real estate crisis that has gripped our nation doesn’t leave anyone out. In the recent months past we have seen many a famous name in the papers with “foreclosure” stamped on their pictures. Read on for these celebs and others facing real estate difficulty. (more…)
In the latest round of financial difficulties banks have begun freezing homeowners’ existing lines of credit. Oftentimes with no more notice than a letter in the mail. This action began due to the fact that many homes have suffered from declining values and increasing mortgage defaults.
For homeowners that believe their properties are averse to falling home values they can contact their bank and argue their case. Worst case if for any reason their equity line check bounces they may be reimbursed with the property proof of fee. (more…)
Yet another blow to Countrywide’s stable and “spotless” reputation.
“The Florida attorney general on Monday [June 30, 2008] filed a civil lawsuit against Countrywide Financial Corp. and its chief executive, Angelo Mozilo, alleging the company engaged in deceptive and unfair trade practices. The lawsuite, filed in state court in Broward County by Florida Attorney General Bill McCollum, alleges that Countrywide put borrowers into mortgages they couldn’t afford or loans with rates and penalties that were misleading. It seeks civil penalties and damages.”
Think anything will come of it?
Shareholders of mortgage-giant Countrywide has approved the sale to Bank of America. No one can tell whether BofA’s investment in the troubled mortgage lender will ultimately end happily with profits for all or if it will end up being one of the worst decisions in the bank’s history of acquisition.
Opinion has been scattered on both sides. Some believe that Bank of America made a stable and solid decision by purchasing the majority share of Countrywide stock. They believe that the estimates of how many loans will go into default, how much trouble Countrywide is in with this mortgage crisis, is overly exaggerated, giving BofA a grand opportunity to become the largest mortgage lender in the country. On the other hand others think that BofA will soon be reeling with the defaults and foreclosures Countrywide has been plagued with among its estimated $95 billion loan portfolio.
Only time will tell. Read on to read the entire article on CNN. (more…)
Provided by CNN
WASHINGTON (AP) — President Bush and Congress have settled their differences on terrorist surveillance and Iraq war money. Now attention turns to a potential housing rescue, probably the last major initiative with any chance of passing before lawmakers scatter to campaign for re-election.
Bush has threatened a veto. But lawmakers in both parties say the housing legislation is a political imperative, and negotiators see the makings of a summertime bargain. (more…)
Yet another version of “celebrity” favoritism. It appears that “top congressional leaders received preferential mortgage rates and fees from Countrywide Financial — the ailing giant home loan company that will soon be acquired by Bank of America.”
What does this mean? Could this mean that the discounted rates were used as bribes? Could this mean Countrywide was actively working on getting on the good side of federal officials? How do we know how much corruption, favoritism, and unfairness has gone on in the market? How can there be a return to trust if we are reading articles about how certain people that have more “power” in government or society are receiving better loans and better opportunities than the rest of us “common” people?
Sadly, I think this is something that many people knew was probably reality but none of us wanted to admit or think about it — me included. Continue reading for the article. (more…)
Article provided by: Mortgage News Daily
Testifying before the Senate Banking Committee on risk management and systemic risk, Federal Reserve Vice-Chairman Donald Kohn said that while liquidity pressures have eased, the Federal Reserve must protect the markets from a possible relapse.
Kohn said that home loan losses are increasingly significantly and that the commercial real estate market needs to be supervised closely. Kohn added that the Federal Reserve is working closely with financial institutions by providing feedback to banking officials.
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The banks have been burned. Home owners have been burned by the banks. What’s next?
The banks have become increasingly determined to return the previously risky underwriting standards to the conservative guidelines they used to follow before the real estate boom got to their pocket books. Unfortunately their impeccable timing is one of the things hurting homeowners and homebuyers today. It is now that the economy needs people to buy real estate as a first step to stimulate the economy and perhaps even go back to some semblance of stability. But with lenders making it more difficult for borrowers to obtain loans it is no wonder that potential home buyers have just given up.
I’ve heard the same question from many clients: “Is it really impossible to get a loan now?” My response? It’s not impossible but it’s definitely harder than before. (more…)
