Subprime Mortgages

The one thing that has been blamed for the world's current economic problems is the subprime mortgage crisis in the United States. It wasn't just that people took on mortgage loans they could not really afford, but that they were encouraged to do so by lenders who should have known better. Furthermore, international banks parcelled up mortgages, and they were traded as mortgage backed securities.

Banks seemed to believe that they had found a never-ending source of easy money, as evidenced by the massive bonuses they lavished on themselves. To say that there was a lack of control would be an understatement as there was no sensible regulation. Banks were sucked in, Governments were sucked in, but it would seem that the general public in the form of taxpayers were the final suckers. International banks had to be bailed out using taxpayer's money.

As mortgage backed securities were devalued because of falling house prices, initially in the US, world banks began to see the error of their ways. However, it was too late to stop the rot and many of them had to be bailed out with public money. You could not blame the subprime mortgage crisis on the people whose only requirement was to own a home of their own. But many of them were trapped as the unsustainable rise in house prices went into reverse. It meant that many of those who has been persuaded to buy a home they could barely afford, were trapped in negative equity, where their mortgage loan exceeded the value of their property.

Surely someone should have seen it coming. But greed had almost become endemic. There were massive bonuses available and bankers wanted to share in the spoils. The higher up the managerial ladder you were, the more you got, and the rewards seemed to spiral onwards and upwards. Talk about 'manna from heaven' but it was all too good to be true. In fact it wasn't good at all. When the bubble burst, as all bubbles eventually do, the US subprime mortgage crisis affected global banking on a vast scale.

Now, poor old Joe Public has to foot the bill, and will have to do so in some countries for generations to come. There is a good case for getting some of the beneficiaries to pay back some of the spoils, but it won't happen. Capitalism isn't defunct but it has had a terrible shock. There is no doubt that it will recover eventually, until the next time that everything is sacrificed, in the absence of regulation, to unbridled greed.


Mortgage Cheats Never Win!

It would be nice to think that mortgage cheats never win, on either side of the mortgage market. Unfortunately, it's not true and there are unscrupulous mortgage lenders, and unscrupulous mortgage borrowers who may get away with it. It must be said that most lenders are honest, and those who are termed unscrupulous, are not usually proper mortgage loan providers anyway. There are people that go round knocking on people's doors, offering this and that, who are just out to defraud. So, if you are seeking a mortgage or endeavoring to renegotiate a better mortgage deal, don't be taken in by casual callers.

On the other side of the coin are mortgage borrowers who are not having trouble meeting their obligations, but say they are to secure a better deal under one of the government sponsored schemes. That is not to say that it is wrong for any mortgage borrower to try to obtain a better deal legitimately. However, it is wrong to pretend (lie), to get a better deal that is being made available to assist those in financial difficulties, through losing their jobs or have otherwise suffered financially, because of the credit crunch. For a start government sponsored schemes rely on taxpayer funding, so there have to be rules to deter people from becoming mortgage cheats.

Mortgage borrowers who believe that they qualify for assistance, under one of the government schemes will be required to fill out a form that will spell out the conditions of the arrangement. It is wise to answer the questions honestly, and indeed it is an offence not to do so. Don't let this put you off if you can satisfy the required criteria. There is nothing to fear, and may be much to gain for those experiencing financial hardship under set circumstances. If you are in doubt, about whether you qualify or not seek the assistance of your loan provider, who should be acquainted with the rules and procedures. Just be honest and you can't go far wrong.

You will be required to certify that the information you give on the form is the truth. You wouldn't really want it any other way because we are all taxpayers and you wouldn't want to support anybody who was on the fiddle. Understandably there are penalties for mortgage cheats who tell lies to bolster their own applications. That is only fair, but it is also fair to apply a proportion of taxpayer's money to help people in trouble with their mortgage payments through no fault of their own. Not everybody agrees but unforeseen circumstances can overtake anybody, and when that happens it is good that a degree of help is available.


Obama Introduces More Mortgage Help

President Obama must be just about the most quoted man in the world. So, if you quote him in your blog, and if you know anything about Google duplicate content filters, you might not get much credit for what you say he says! But here goes anyway.

"I believe we're moving in the right direction, but I want to remind everybody that it took many years and many failures to get us here, and it's going to take some time to get us out," Obama said. "The stock market will rise and fall. The job market has taken a beating and won't be back immediately. The housing market still has a long way to go. But I'm confident we will get there."

That is what the president recently said at a White Ceremony to launch further measures to assist some of the people in trouble with their mortgage payments. Apparently, there is a government program called, 'Home For Homeowners', that hasn't yet helped as many people as intended. Therefore, it is hoped that the new measures will assist in publicising the scheme to assist those mortgage borrowers who can benefit. A new bill also includes the provision of a further $2.2 billion to assist homeless families.

There is no doubt that the president has a greater interest than anybody else in steering the economy towards better times. Equally, there is no doubt that many people continue to suffer from the recession, and many of them will not be aware of just how much help is available or how to get it. Some people may even be too proud to ask, but there is no shame in falling on hard times, especially when it is through no fault of your own.

The message is facilities are in place to help people in trouble with their mortgages. It may be that not everybody can be helped, but there is an old saying that if you don't ask, you don't get. Responsible lenders have had funds made available so that they in turn can assist many borrowers. So, don't be put off, talk to your loan provider and find out how you might benefit from government supported schemes, particularly those designed to assist homeowners in trouble with their mortgage payments.


Bill to Catch Mortgage Cheats

President Obama is set to sign a bill designed to assist in bringing mortgage outlaws to justice. Supporters believe the bill will be self-financing, because the cost of implementation, estimated to be around $265 million per year, will be recovered through fines and other penalties levied against the perpetrators.

Unfortunately, when times are hard, and people are finding it difficult to meet their financial obligations, there will always be unscrupulous villains out to take advantage. It is good to know that the US government is determined to do all it can to catch these fraudsters, and make them pay dearly for their crimes.

Moves are afoot to have the FBI mortgage fraud squad increased by around 160 special agents. That should go some way to ensuring that many of the mortgage outlaws finish up in jail, with their ill begotten gains being confiscated and used to support the program.

The fact that the US government, is contemplating spending so much money on catching the mortgage conmen, serves to show how common the problem is. In such circumstances there is a need for homeowners to be particularly vigilant. Just remember if you are offered anything that seems too good to be true it probably is! But the conmen are very good, or bad, at what they do, and they will not readily take no for an answer. As a general rule, do not sign any paperwork or part with any money unless you know for certain whom you are dealing with, and even then be very careful.

You certainly, should never be prepared to discuss your financial circumstances with strangers, who might come knocking at your door, even if they seem to promise the earth. Fortunately, there are reputable people with whom it is safe to deal. They number among them qualified individuals who work at banks and in government departments. So, it is by far the best plan to discuss your requirements at respected premises, with qualified people who have been recommended to you, or whom you know you can trust. Whilst it is true that the image of the banking world has slipped, personal deposits and loans are frequently backed by the state.

Finance is a bit like health in that you cannot protect yourself against every eventuality. However, with due diligence you can be one of the vast number of people who are not victims of financial fraud. Just remember to be on your guard and don't get taken in.


British MP's Mortgage Fiddle

There is a scandal raging in the UK about the expenses of members of Parliament, including the way some honorable members have claimed mortgage assistance.

It seems that there has been a very lax system of expenditure control, as a result of which some MP's have milked the system for all it's worth. There are even instances of phantom mortgage claims. Astonishingly, it has been suggested by the British Daily Telegraph, which has launched a campaign into the mortgage scandal, that several MP's were offered opportunities to claim phantom mortgage payments.

As the name suggests a phantom mortgage is about claims against a mortgage that has already been paid off. The Telegraph has suggested that although phantom mortgages were eventually discouraged around 2004. those MP's who benefited have not been asked to pay the money back. However, they are like rabbits caught in the spotlight, and it may not be long before they are named and shamed.

Dodgy mortgage claims are just part of an expenses scam that is currently tainting British politics. It would be an understatement to suggest that the public at large are disgusted at the conduct of some of their representatives. The economy generally is in a bad state, and many people have had to tighten their belts or worse. There have been many job losses and mortgage foreclosures, and the last thing people want when they might be experiencing genuine mortgage difficulties of their own, is avaricious excesses by those in public office.

Of course, not all Members of Parliament have acted dishonorably, but some of those who have, suggest that they have not broken any rules but are part of a rotten system. The public find this hard to swallow, and it seems that whenever there is a general election, which must be within the next 12 months or so, they will get a chance to 'get their own back' by sweeping many of their representatives out of office.

The phrase 'getting their own back' seems particularly apt, because MP's expenses are met from public funds. Some party leaders are requiring some of their own MP's to pay some of the money back, but presently that seems to be only the tip of the iceberg, of a story that is set to run and run.


Obama Mortgage Plan Progressing

It seems that there has been a slow start to the Obama plan to assist millions of homeowners avoid foreclosure through reducing the amount of their mortgage repayments. At this time there are only about 55,000 homeowners who have taken advantage of the Obama administration mortgage repayment reduction plan, whereas it is estimated that a further 2.1 million homeowners will loose their homes this year. Those who have succeeded suggest that they have done so with sheer persistence, Therefore, the message must be that if at first you don't succeed, try, try, try again, although the situation is forecast to get easier as lending sources get up to speed. Meanwhile, interested parties are advised to familiarize themselves with mortgage procedures.

There is an excellent article in the New York Times giving information about progress of the Obama mortgage plan. An extract is reproduced below but please click on the heading to read the full article:

Slow Start to U.S. Plan for Modifying Mortgages

"The Obama administration’s plan to help millions of troubled homeowners avoid foreclosure by reducing the size of their mortgage payments is just getting off the ground.

Because of the size and complexity of the modification program, the administration has only recently assembled most of the pieces. In late April, officials fleshed out their plan to modify or forgive second mortgages — one of the big stumbling blocks in modifying primary mortgages — and provided more details on the Hope for Homeowners program, for borrowers who owe more than their homes are worth. Congress is close to acting on legislation to protect mortgage servicers from potential lawsuits from investors, while also expanding the Federal Housing Administration’s ability to modify loans."


Mafia Mortgage Repayment Problem

It has been reported, as far away as the UK, that even Mafia families can have difficulties in meeting their mortgage repayments.

It just goes to show that nobody is immune from the difficulties that can arise when personal circumstances change, and income is insufficient to meet outgoings. Of course, one of the main expenditures of any family is the mortgage repayment. Mortgage repayments may not be the sort of difficulty that you would expect Mafia families to get into, but they are symptomatic of what has been happening to people from many different and diverse backgrounds.

All many people want is a home of their own, and the means to pay for it, which is relative to secure employment. Unfortunately, governments in the USA and at the other side of the pond have not set the best examples, unless it is only how to make a fast buck! It seems that all the chickens have come home to roost at the same time, and the housing ladder has become a bit of a snake.

Please Click Here to visit the Free Mortgage Advice Web Site.

An extract from the news item is reproduced below. Please click the heading to read the full article:

Daughter of Mafia boss faces eviction for mortgage arrears

The daughter of a notorious Mafia crime boss has to sell her mansion or face eviction for mortgage arrears.

Victoria Gotti, 46, who starred in the reality TV series Growing Up Gotti, owes nearly £500,000 and has not made payments for two years, court papers say.


Understanding Mortgages

Whilst most people aspire to own a home of their own, there are many who, through no fault of their own, do not have a clear understanding of mortgages. In this respect there is an interesting article in the Real Estate columns of the New York Times, explaining how the Bank of America is endeavouring to enlighten and help their mortgage customers.

Of course there is already plenty of mortgage related advice available from various sources, but anything that is new, and born out of recent problems in the housing market is welcome. It is always good to know that the information you are seeking is up to date. This applies to the financial services sector in general and the mortgage industry in particular. After all a home of their own is the biggest single investment that many people will need to make. Therefore, any assistance to understand how the various mortgages fit in with personal circumstances will be particularly welcome.

An extract from the New York Times is reproduced below, and those who are interested in learning more about mortgages are invited to click the heading to read the full article:

An Emphasis on Simplicity

"SOME good may come from the home-foreclosure crisis. While the federal government imposes industry wide changes, at least one major lender has instituted improvements of its own.

Bank of America recently introduced three service improvements: a Web site to help consumers choose loans more intelligently, a disclosure document that explains loan terms more simply, and a loan with an all-inclusive closing fee. The company last month shuttered Countrywide Home Loans, which it acquired in 2008, and formally absorbed that business into a newly branded division, Bank of America Home Loans.

“We wanted to change the conversation to ‘How much house can I comfortably afford?’ rather than ‘What’s the maximum I can buy?’ ” said Aditya Bhasin, the product, pricing and strategy executive for Bank of America Home Loans.

Once would-be borrowers type in their financial information, the Web site offers “sliders” that show how the loan picture might change, say, if they reduced their monthly credit card debt."


Home Loan Program for Senior Citizens

There is an interesting Associated Press article in Google News about senior citizens helping to finance their retirement, by using reverse mortgages to borrow against the equity they have built up in their homes.

It is not difficult to realize why schemes of this nature are popular to some senior citizens. It seems that the government is also interested in keeping the scheme going. Apparently they have asked Congress for a $798 million subsidy, to enable them to continue with a plan to insure lenders against losses incurred when a property is sold for less than the total loan amount.

Please Click below to read the full article, an extract from which is included:

Home loan program for seniors needs $798M rescue

"The government said Thursday that the Federal Housing Administration needs the money to support a program that lets homeowners over 62 obtain "reverse mortgages" to borrow against their equity.

A reverse mortgage allows borrowers to convert equity in their homes to cash, without making payments until they die or sell their home. Interest is due at that point.

But with home prices projected to appreciate slowly, if at all, over the next few years, lenders that participate in the government program may not be able to collect the full loan amount from some borrowers. The government, which insures lenders that participate in the program, is on the hook if the house is sold for less than the total loan amount.

Borrowers can draw on about 60 percent of their home's equity. But they are also allowed to receive payments monthly for the rest of their lives, without any cap.

If they live longer than expected and home prices rise slower than expected, that could mean losses for the program."