The Great Mortgage Fiasco!

It has been reported that UK house prices have fallen by 15% in the last year, and that if the trend continues five million homebuyers face negative equity. That is what happens when the value of their homes is less than the outstanding mortgage. It is a trend that might further depress the market, because people who were intending to move house for whatever reason, will tend to stay put in the hope that the situation will improve.

It seems that every day bigger and bigger losses are being reported by UK major banks heavily committed to the great mortgage fiasco on both sides of the Atlantic. It has constantly been suggested that the blame is mostly to do with the North American sub prime mortgage market. But who forced UK banks to get involved with what was happening the other side of the pond? In any event these captains of finance do not seem to have done too well on the home front either. It almost seems that they were recklessly trying to outdo what was happening over there.

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The media are constantly reporting, about increasing billions that have been lost by banks that could have been managed better by Punch and Judy. Some of the biggest names in banking have been on UK television apologizing for their ruinous policies. However, the latest scandal is that some of those responsible are to profit immensely for virtually breaking the banks. Lifetime pensions of around £700,000, equating to about a million dollars, seem to have been secured by some of these sorry men!

These momentous events are coming at a time when so many non-bankers, sometimes known as ordinary decent working people, are losing their jobs and wondering whether they will be able to afford to stay in their homes. They quite rightly wonder what on earth is going on and where will it all end? There is no wonder that confidence is at rock bottom.

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Some British banks that have been reluctant to continue lending in the present climate have been cajoled into doing so, on the back of a massive injection of taxpayer's money. However, the housing downturn continues and the best advice to first time buyers is probably to wait and see. People who need to move, and who have little or no outstanding mortgage, may have to sell their property for less. But when they move they will buy for less and to some extent things may balance out.

For those who really know what they are doing there may be some bargain properties and bargain mortgages available. But the old adage, 'let the buyer beware', has never been so applicable.


Obama Mortgage Plan To Stem Foreclosures

In a bold bid to resuscitate the housing market the President Barack Obama mortgage plan earmarks $275 billion, out of a massive $2 trillion financial stimulus package, for mortgage relief. A significant aim of the Obama mortgage plan will be to stem foreclosures, seen as a major factor in the continuing housing slump, which in turn has a devastating effect on the economy at large.

Not everybody agrees with the proposals, as many of those who have kept their mortgage payments up to date resent bailing out others who are seen to have bitten of more than they could chew. However, it is not really that simple because a massive lack of confidence, as is being experienced, affects almost everybody. People stop spending and there is a real danger of the economy grinding to a halt. Therefore, timely intervention by the federal government is not so much necessary as essential.

Of course the Obama mortgage plan will have to be properly administered. The grave problems in the financial sector will not be solved overnight, but confidence should start to be restored once people become convinced that plan is having the desired effect.

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The new president talks confidently, as though he means business, and his words suggest that he is well informed regarding what needs to be done. That in itself is a good thing, and it seems that a new and self-assured occupant of the White House might just pull it off. It may prove to be a long haul, but when things start moving in the right direction they are inclined to gather pace. Let us hope so, because there are millions of Americans, and billions of others throughout the world who want the presidents mortgage plan to succeed. Not just for its own sake, but for the financial security of us all.


Barack Obama Discount Mortgage

It's tough at the top and it seems there will always be snipers out to get you! Judicial Watch, the public interest group that investigates and prosecutes government corruption had been looking into a discount mortgage, obtained by President Barack Obama when he was a Senator back in 2005. The Federal Election Commission (FEC) has confirmed that Senator Barack Obama did obtain a discount mortgage, but that no laws were violated.

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Of course the spotlight is on anything to do with mortgages and the housing market, and Barack Obama might be considered to be fair game. But it has been revealed that the Presidents mortgage was granted on similar terms to other gold plated borrowers, and Northern Trust, the mortgage loan providers, have said that it was simply a good business proposition for them. They produced evidence of loans to other similarly situated borrowers, but not everybody was satisfied with the explanation.

Transparency in the dealings of elected representatives is a vital factor of any democracy; otherwise double standards may arise that are at the very least, distasteful to the electorate. In this respect the United States is considered to be much to the fore. It seems that the situation is not always so clear in some other leading democracies, which are frequently drip fed stories about the way their parliamentarians behave. Surely one of the great benefits of a free press is to keep the house/s in order!

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It is necessary, and right, that the highest politicians are open to scrutiny, and good to know that Barack Obama has been exonerated from any particular fault in this investigation. Much is expected of the new man in the White House, and there seems to be no reason why through the implementation of right decisions, the honeymoon should not continue for some time to come.


Fannie, Freddie, and Barack Obama - Mortgage Rescue Initiative

It is reported that the Barack Obama Administration is working closely with Fannie May And Freddie Mac, to see what can be done to expedite plans to assist hundreds of thousands of borrowers with their mortgages. It would appear that similar plans already under way have stalled, and only assisted a tiny minority.

Officials are reported to be determined to ease the restrictions which have limited the success of past endeavors, whilst remaining alert to the problems of using billions of dollars of taxpayers money.

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Negotiations include plans to replace many high cost mortgages, thereby reducing the incidence of foreclosures, and allowing as many as 1.5 million people to remain in their homes. Any moves are likely to prove to be expensive and complicated, but where there's a will there's a way! Of course Fannie and Freddie are already government controlled, and have been reorganized to assist with the current housing crisis.

Unfortunately, progress has not yet met with expectations. Therefore, additional measures are under serious and urgent consideration. It is intended to target between $50-$100 billion mortgage aid out of the $700 billion financial rescue package, to ease the housing burden. The aim is to make funds also available to other mortgage companies, to allow them to follow the lead of Fannie and Freddie. These two, jointly own or insure around 31 million mortgages, but despite the best intentions, very few have so far qualified for help.

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So substantial funds have been earmarked, and there is now a concerted effort to find the best way of injecting the money to provide help where it is most needed. There are some legal hurdles to overcome but top level intervention, may be just what is required to bring about the necessary stimulus.


Mortgage Default and Foreclosure

There are many borrowers who are unsure of what could happen if they default on their mortgages.

As with most things there are serious cases and others that are not so bad. This applies to mortgage default as much as anything, and it is unlikely that there would be foreclosure, because a borrower was experiencing temporary financial difficulties and fell behind with a month or two's mortgage repayments. However, if the position became more serious the position would be looked at on its merits. In any event, the best way forward is to discuss the situation with your loan provider, as soon as you are aware that your finances are becoming overstretched.

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As a general rule Banks do not want to own houses, and incur the associated expenses, such as insurance and real estate taxes. Of course speculators attend foreclosure sales but they are inclined to 'cherry pick', leaving the bank stuck with properties they don't want. Most times, and particularly at present, banks have matters they consider more important to be getting on with, than foreclosures.

In the first instance talk to your loan provider and see whether you can work out a mutually satisfactory arrangement. It might be possible to modify the loan by applying a lower interest rate or a longer term. It may even be possible to arrange a repayment holiday, and you may be pleasantly surprised by the banks willingness to help.

In the second instance seek help from federal agencies and/or local or state sources, because there is a lot of endeavor being targeted at supporting people in danger of losing their homes. Remember you are not alone in your predicament, and additional assistance is under consideration at the highest levels.

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Thirdly seek information regarding other schemes such as shared equity arrangements. These might be thought of as a last resort, and you should be aware of financial and other implications. However, unless the situation really is becoming hopeless, there are ways and means of avoiding foreclosure. It is about the nastiest way to lose home, but should be increasingly avoidable as government plans materialize.


Real-estate agent gets 41 months in prison in mortgage-fraud case - Denver Business Journal:

A recent article in the Denver Business Journal covered the case of a real estate agent imprisoned for mortgage fraud.

The acting US attorney for Colorado, commenting on a recent mortgage fraud case, stated that, "During these difficult economic times, the citizens of Colorado and the nation must have confidence in the financial marketplace. Those who perpetrate this crime must be held accountable.”

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Real-estate agent gets 41 months in prison in mortgage-fraud case - Denver Business Journal::

"Real estate agent Linda Edwards was sentenced Friday to up to three years and five months in federal prison and ordered to pay nearly $800,000 after her conviction in a mortgage fraud case.

Edwards, 55, of Centennial, operated Affable Realty in Aurora. She was convicted July 25 after a jury trial on charges of wire fraud, false statements, and false use of a Social Security number, according to the office of David Gaouette, acting U.S. attorney for Colorado."


Most citizens agree that those involved in mortgage fraud must pay the consequences. However, there will undoubtedly be some who get away with it.

There is a lot of anger at the way the financial institutions have behaved, not fraudulently, but recklessly playing a part in the damage to the nations economy. It seems that many are still receiving bonuses that many ordinary people see as a reward for failure. There seems to be a suggestion, in high places, that the bonuses must continue to be paid otherwise highly skilled financial managers will week work elsewhere, possible overseas. Many people see this merely as a system trying to justify and protect its own!

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It seems unfeasible that there are not business graduates who could handle top jobs in the financial centers without breaking the banks! Leaving the same people to clear up the mess is a bit like putting a rat in charge of the cheese factory!

Should Americans Be Forced To Pay Their Neighbors Mortgages?

As more tax payer's money is designated to assist the ailing housing market. Republican Jeb Hensarling, R-Texas, has asked, "While Americans all over this country are struggling with their own mortgages, should they be forced to pay their neighbors mortgages?" However, there are many who take the opposite view that not enough is being done, and that such help that is available is not fast enough.

There is anger, in some quarters at proposals to subsidize borrowers who some consider, have acted irresponsibly and are largely to blame for their own predicaments. However, the Obama economic team appears to be sympathetic to assisting homebuyers experiencing difficulties, as there is a view that such help would assist the wider economy.

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There is no doubt that the number of foreclosures is a major factor in depressing the housing market. Government intervention will not prevent all such foreclosures, but it could assist in stemming the tide, and restore a measure of confidence.

It has been reported that the Obama Administration want to spend $100 billion to assist people to stay in their homes. Various proposals are under consideration including tax breaks of up to $15,000 for buyers of new or existing properties.

The government had hoped that measures introduced by the lending industry would stem the increase of foreclosures, but that hasn't happened. Unless effective help is made available the position is likely to get even worse as unemployment rises in the continuing recession. It was intended that bail out money handed to the banks would assist in halting foreclosures, but so far that has not happened.

It seems that well-intended plans to assist homeowners in trouble, are not having much of an effect so far. There is no denying the Government's will to offer positive assistance, but there seems to be some difficulty in implementing the right way to go about it.


Democrats and Republicans Consider Reducing Mortgage Rates

Republican policymakers are proposing a plan to reduce interest rates on 30-year mortgages by one per cent from 5.1% to 4.1%. The $300 billion plan, would be part of a $900 billion financial stimulus, with the aim of kick starting the ailing housing market, so vital to the US economy as a whole.

The plan would be intended to assist prospective new homeowners thereby stimulating the housing market, and also increase the spending power of existing homeowners by lowering their borrowing costs. It would lead to a saving of around $180 per month on a $300,000 mortgage that would be available to drip feed into the wider economy, to add to the impetus of other elements in the overall plan.

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President Obama's economic team is said to be considering the proposals, along with other leading Democrats. There is a general consensus to get the cost of mortgages down to stimulate markets, and assist in restoring confidence.

It has been estimated that each percentage point drop in mortgage rates can assist with 500,000 house sales. That should assist with the over supply of properties, that is a major factor in the continuing downturn. Of course, there is no magic wand to cure the ills of the depressed housing market.

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It is good to know that there is consensus and cooperation, between Democrats and Republicans, to help things get back to some degree of normality. There is little doubt that the current crisis continues to affect millions of ordinary Americans. Regardless of which way they recently voted, there are expectations that all their elected representatives will unite to do whatever is necessary to overcome the current malaise.


Why Help 'Buy To Let' Landlords Get Rich Part 1-Free Mortgage Advice

Why Help 'Buy To Let' Landlords Get Rich Part 1-Free Mortgage Advice

The following is an extract from an interesting article about the 'Buy to Let' sector of the housing market. The gist of the article is that it generally preferable to buy your own home rather than rent from a landlord. There are pros and cons both ways. Although the trend of house prices has generally been upwards, resulting in substantial potential gains for homeowners, at times like the present, the market turns, and negative equity shows, its ugly head.

"If anybody told you that you could buy a home, without having any monthly payments to find, and that you could keep all the profits in the event of a sale, you might think they were mad.

There are many people who have jumped on the buy to let bandwagon and recently some of them have caught a cold. It had become all too simple, and there were easy pickings until the housing market downturn. However, it must be remembered that prior to the downturn prices had rocketed to unprecedented levels, and there has been nothing like a correction to the levels apparent before the bubble burst.

Some people have done very well out of buy to let, and many are still doing so. Sure, there are those who have caught a cold, because they over extended themselves when prices were high. There is not a great deal of sympathy for them, because at the end of the day they were in the game to make a fast buck. That some may not have done so is down to the luck of the draw, or in some other cases to lack of investment know-how."

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Option Adjustable Rate Mortgages

Option adjustable-rate mortgages are counted among the so called 'sucker mortgages', widely available during the housing boom. It is understandable that people desperate to acquire a home of their own, could resort to mortgages that might be considered risky in normal times. Most people who had not profited substantially from the housing boom knew somebody else who had. Therefore, almost everybody wanted to jump on the bandwagon, and lenders were only too willing to oblige.

The trouble was that many people were encouraged to take out loans they could not really afford. It's all very well taking out an option ARM with very small initial outlay but what about when the day arrives to reset the terms. Not so bad if you are in progressive employment with housing prices soaring, but what about the downturn with all its painful consequences.

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There were many in the mortgage sector who were prepared to sell option ARM's to almost any applicant. They were getting substantial; most would say unreasonable bonuses, and ostensibly helping others onto a housing ladder extending forever upwards. There were, of course those who knew that the bubble was sure to burst, but human nature being what it is few were prepared to contemplate an end to the boom, and a largely unregulated situation prevailed, until the alarm bells started ringing.

If there is nothing better than obtaining a home of your own, there is nothing worse than losing it. Those who are in the unfortunate situation of not being able to afford mortgage repayments should talk to their loan providers at the earliest opportunity. It may be that the resetting of option ARM's requires mortgage repayments that are beyond your means. Whatever the reason, if you are in financial difficulties, or likely to be in the near future, talk to your loan advisor. Remember that there is no shame in seeking help, and it is because a bad situation has been allowed to get worse, that the worst consequences often occur.

President Obama has pledged to assist homeowners by lowering costs, and responsible mortgage providers are expected to be sympathetic to periods of temporary hardship, including those with option adjustable rate mortgages. There will always be investors who buy and sell speculatively, and there are many ordinary people who have sold their homes and made substantial gains. Of course it is all relative for those who sell a home to buy a similar priced property elsewhere. The general trend of property prices, over time, has been upward, and there are many middle-aged people whose property value far exceeds their initial expectations.

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There is a lot of consideration being directed at the housing and associated mortgage markets. Foreclosure is rightly being considered as a last resort, and a major contributor to current malaise. Repossession and foreclosure auctions force prices down further, as those involved seek fast cash returns. There will come a time when prices will bottom out and property will again become not only a fundamental necessity but a good investment as well. In the meantime, resist foreclosure if it is within your means to do so, and take advantage of the help that is becoming increasingly available.


Obama Help For Home Owners

President Barack Obama has pledged to help homeowners by lowering mortgage costs as part of a financial rescue package. He seems determined to bring his influence to bear to assist homeowners, many of whom believe that the only assistance so far has been directed towards bankers, whom they consider to be largely to blame for the current crisis.

It seems that the housing market is suffering from a crisis of confidence as much as anything, and any stimulus to stop the rot would be welcomed by homeowners and the construction industry at large. People who had become disillusioned by the Bush Administration swept Obama to power, as much on a desire for change as anything else. The collapse of the US housing bubble has affected millions of homeowners and is widely considered to be at the center of the recession.

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The outlook for an improvement in the property market remains grim, but it is to be hoped that the Obama factor will help to turn things round, and restore a measure of confidence in the housing sector. Donald Kohn, the Vice Chairman at the US Federal Reserve, has spoken out about the need to utilize government funds to assist the ailing mortgage market. He stressed the link between preventable foreclosures, affected borrowers and their communities, and the knock on effect to the broader economy and financial system.

There are expectations, that part of an Obama inspired rescue package, may be used to buy up so called toxic assets, through the creation of a bad bank or the issue of guarantees. Such measures may assist in freeing up the credit that has tended to freeze up during the banking crisis.

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There are many analysts who believe that in addition to the $700 billion already approved, much more will be required to begin to restore confidence to financial markets. However, there is a great deal of unrest at the sort of money being allocated to assist the rescue of the banking sector and Wall Street whilst ordinary people are losing their homes and their jobs. There is particular outrage at the way some banks have continued to pay what are generally believed to be absurd bonuses while being bailed out by taxpayers.

There is little doubt that the 'man in the street' expects to share in the benefits of any further application of taxpayer's funds. All too often those who lose their homes become the actual man on the street. The financial crisis is causing a great deal of hardship and unrest, not only in the United States, but also in Europe and throughout the world.