All Articles Tagged "home loans"
Bank of America has agreed to pay Fannie Mae $10 billion to settle claims that the bank’s Countrywide Financial business issued home loans that contributed to the housing crash and economic recession in 2008.
“Both Fannie and Freddie [Mac], which have suffered billions of dollars in losses in recent years, have argued that Countrywide misrepresented the quality of home loans that it sold to the two entities at the height of the mortgage bubble,” The New York Times reports. “Bank of America assumed those troubles when it bought Countrywide in 2008.” The bank will pay $3.6 billion to Fannie Mae and buy back $6.75 billion in mortgages.
Bank of America is trying to get out of the mortgage business all together, but as the Times reports, they’ve run into problems with other outstanding lawsuits, including one from the Justice Department that could take $1 billion to settle. Last week, The Wall Street Journal reported that that settlement, which is meant “to compensate minority borrowers for alleged discrimination,” has been delayed with homeowners still being contacted and the possibility that checks won’t go out for another two years.
“The department said Countrywide charged black and Hispanic borrowers higher mortgage-lending fees or steered them into costly subprime loans even though their credit histories qualified them for a mortgage with more favorable terms,” the WSJ says. In its response, BofA tries to distance itself from Countrywide’s pre-acquisition business practices. Recipients will get between $200 and more than $15,000.
Bank of America is also participating in an $8.5 billion settlement (along with other financial institutions like JPMorgan Chase, Wells Fargo, and Citibank) to settle bad loan claims. Only $3.3 billion will go directly to borrowers (3.8 million customers total). The rest will be used for loan modifications and other adjustments, according to Forbes.
Hey weekend loves!! Has everyone been to the movies already to see “it?” Well if not, you probably will have gone by the time this day is over because Think Like A Man is killing it so far! We’ve got a couple more tidbits for you just in case you missed it during the week and as I’ve been doing, there’s a new artist you need to “meet.” Let’s go!
Michelle Thornhill is the Senior Vice President and African American Segment Manager at Wells Fargo/Wachovia. Michelle has over 15 years of experience developing consumer initiatives for diverse audiences in the financial services and non-profit sector. Michelle earned a Bachelor of Science from Virgina Polytechnic Institute and State University, a Master of Science in Administration from Central Michigan University and a Master of Public Administration from Harvard University, the John F. Kennedy School of Government. Michelle resides in Charlotte, N.C. with her husband and two sons.
As you prepare to buy a home, you may be applying for financing. Consider your current and future financial situation when deciding how much you can afford in a mortgage payment. Think about the type of loan you may want. Are you comfortable with an adjustable interest rate or do you prefer a fixed rate?
Although adjustable interest rates tend to be lower, you might be more comfortable with a mortgage payment that is stable and predictable, as with a fixed interest rate. Take into consideration how you will be using the loan. Someone buying a fixer-upper might need a different loan than someone buying a newly constructed home. Wells Fargo’s Home Loan Workbench is an online tool that can help you find the right mortgage to fit your needs. You can compare loan scenarios and request a free consultation.
For more financial tips and information, visit wellsfargo.com/mortgage.
(Bankrate) — Why refi? There are at least seven reasons to refinance a mortgage. You probably can think of the first one — to get a lower mortgage rate. The average interest rate on an outstanding mortgage at the beginning of 2010 was 5.979 percent, according to the Bureau of Economic Analysis. However, lenders today are offering rates well below that benchmark, making a refinance a no-brainer for many. But low rates are not the only motive for refinancing a home loan nowadays. The following are good reasons to consider a new home loan.
Refi for a Lower Rate: The No. 1 reason to refi is to get a lower mortgage rate. Despite sinking rates, a lot of people haven’t refinanced. Many homeowners would like to refinance but can’t because they have little or no equity due to falling home values. Jim Sahnger, mortgage consultant for Palm Beach Financial Network in Stuart, Fla., says too many of his clients can’t refi for this reason. ”But there are people who can, and some people who get so into whatever they’re doing that they don’t pay attention to the news and don’t pay attention to where rates are at,” Sahnger says. So Sahnger will call to tell them that rates are near record lows.
Defaulting on your monthly mortgage payments leads to the either foreclosure or short sale. Both the processes have an adverse effect on your credit score.
Compared with the foreclosure process, the short sale process is always considered to be a better option because it gives the owner some time to make alternate arrangements to pay their mortgage. Additionally, house owners can also seek the government’s help if they do not want to face the consequences of a foreclosure.
Home foreclosures do not allow the owner to be a part of the sale whereas they have complete control when it comes to short sales. The downside is that most lending institutions do not agree to short sales because they lose out on an opportunity to sell the house at the price that they want for it.
A short sale specialist may encourage the owner to sell the house for an amount that is lesser than what they expect from the market. In spite of this, foreclosure listings are easier to find when compared with short sales listings. Depending on your credit report, you can avail a new mortgage only 5 years after the foreclosure process while the same can be availed in a time period of just two years with the help of a short sale negotiator.
It is highly recommend that owners who fall behind in their payments speak with their lender as soon as possible to discuss a short sale with them before it is too late.
(New York Times) — Did the proliferation of low-down-payment, low-documentation loans cause the housing bubble? Last week, I discussed one core problem with answering that question — we don’t really know what happened to approval rates or loan-to-value levels over time. But let’s assume that we did know, and that loan-to-value ratios increased by 5 percent over the bubble while approval rates went up by 10 percent (or pick whatever numbers you want). Could such changes explain the 53 percent real increase in housing prices between 1996 and 2006?
(Smart Money) — A mortgage with an interest rate lower than 4% may have seemed like a pipedream during the housing boom five years ago, but plenty of Americans are locking them down in August. Could they be kicking themselves in September? With mortgage rates hovering near 40-year lows and selling prices still depressed, many potential borrowers are wondering whether rates have further to fall.
(Wall Street Journal) – The housing crash has left at least 11 million people in the unenviable position of owing more on their homes than they are worth—and many more millions with properties worth far less than they paid for them. But some might not be as trapped as they think.
(CNN Money) — Slick TV commercials and online ads tell delinquent borrowers that they can save their homes by filing for personal bankruptcy. But is it true — or just too good to be true?
(Wall Street Journal) — Dennis Davis has a nearly perfect credit score, equity in his home, considerable savings and a solid pension plan. But Mr. Davis recently found that his lender didn’t want to refinance his mortgage. The problem? Mr. Davis’s income-tax return showed he had taken a loss on an investment he made in a small, family-owned business. That was enough to raise doubts about his otherwise strong financial condition.