June 13, 2011
June 13, 2011 by admin
The stock market tried to mount a rally on Monday, but finished the day relatively flat, a growing signal that the pessimism in the market may be around to stay for the summer. The DOW was up almost 100 points in early trading action as investors were looking to buy into some bargains from the sell off over the last thirty days, the market was not able to hold in the gains and failed to hold the 12,000 point level in trading. The news regarding Greece and mounting concerns over their ability to maintain their financial obligations could have a lingering impact on the markets this week.
News on the home mortgage front remains good for the lending industry as interest rates remain on a downward trajectory. The dip in stocks has benefited interest rates, specifically long term fixed mortgage rates which are now at or below four and a half percent with almost every major national mortgage lender. The dip in the market has also brought down the yield on shorter term bonds, helping bring variable rates down as well. The MBS reported today that 1 year arms are now also at historical low levels and available under three percent. Most consumers are still choosing more stable, longer term options on both refinance and purchase loans due to the cloudy future of the real estate marketplace. Several large loan servicing companies today lost their financial incentive from the government to modify mortgages, including Bank of America as the government believes they have not been aggressive enough in assisting borrowers through the making home affordable program. This remains one of the biggest challenges in both banking and policy as there has been little to no progress in helping slow down home foreclosures or come up with a meaningful long term solution to keep people who are underwater in their homes. While the government believes they will “shame” the large banks outed in today’s report to modify more loans, the program remains voluntary and the lack of oversight and assistance to homeowners a huge burden on the economic recovery.
QRM Yet Another Federal Blunder In Fixing The Housing Market
June 8, 2011 by admin
QRM – Qualified Residential Mortgages is probably the dumbest idea the government has rolled out in the past 24 hours. An idea whose origination stems from the colossal collapse of the economy and U.S. housing markets would ensure the collapse of the American Real Estate Market. The simple economics of removing 30-40 of potential home buyers from a struggling real estate market should be enough to slow down the passage of this new financing regulation, but given the governments track record in analyzing and helping housing, anything is possible. The same geniuses that brought us the making home affordable, hope for homeowners, hamp and other alphabet soup scenarios for keeping borrowers in hopes that we part of a ridiculous bubble are only going to further destroy home values in what is a weakening U.S. economy.
While the lobbyist from the real estate association, mortgage bankers association and numerous other parties are pointing out the fallacy in the latest proposal, its the common disconnect between main street america and the corporate/government world that appears to be growing further apart. The QRM’s idea of keeping debt to income ratios in line is perfectly legitimate, requiring borrowers to fork over a 20% down payment is the big issue that would ensure the collapse of the real estate market. The fact that the 8 million folks lost their jobs over the last three years, income growth is stagnant at best, energy costs are surging will make saving towards a 20% down payment an almost unachievable goal.
The key to fixing the housing market is really based on simple economics, supply vs demand. Increase the demand for housing by providing the best financing options to qualified buyers. Force the government bailed out banks who played casino roulette with derivatives, forged millions of docs in mers and had zero underwriting guidelines in place for their mortgage divisions to reduce the balance of home mortgages to today’s market values. This is the only realistic way housing is ever going to get turned around and avoid the pressure that is mounting on middle class america to walk away/short sale their properties in order to see the light at the end of the tunnel financially.
June 4, 2011
June 4, 2011 by admin
The continued decline in stock prices, weakness in housing and the employment markets over the past sixty days has very few silver linings. The one area that has benefitted from the market changes is the mortgage market, where fixed home mortgage rates have continued to improve. Loan rates dropped to their lowest levels in the month of May and continued moving lower into June. Friday report on the non farm payrolls, unemployment rate and Wednesday’s report from ADP on private sector job growth will only help to keep loan rates on the downward path. Yields on the ten year bond dropped below three percent for the first time this year, and finised at 2.99% this week. This correlates to most national mortgage lenders offering thirty year loan terms at 4.5% or below and fifteen year programs back under four percent. As loan rates drop, more consumers will look to refinance their home mortgages, but their is not likely to be much improvement with home sales and the real estate market. The dip with the economy will continue to add politicial pressures to try and jump start corporate hiring, adding to this is the increased focus on corporate earnings and upcoming GOP candidacy announcements.
Need Help Paying Off Bills?
June 4, 2011 by admin
You can toss those late payment reminders in the food processor or chuck them into the garbage can but that will not make your debts go away. Debt hangs over the heads of most of us, compounding monthly, month in and month out. You cannot wish debt away but you can pay it down. Here are a few ways to get yourself out of debt so that you have more money in your pocket for the things you need.
Consider paying more than the minimum amount due. The minimum amount due on most debt is 2 to 3% of the outstanding balance and only paying this amount only prolongs your agony. Plus, this is exactly what the banks want you to do. The longer it takes you to pay off a debt the more money they make and the less green you have in your wallet. Pay as much as you can afford to each month. If you owe $50, pay $100 if you can. You may be able to find the cash by skipping eating out or by eliminating those trips to the movie rental store. Give up going out every Saturday night. Trim away some unnecessary luxuries so that you can pay more than what is owed each month.
You should find ways to save money. Consider becoming a member of a local food warehouse club so that you can buy your food in bulk. Start clipping coupons and buy off-brand name food products as many are just as tasty as top brand names that cost far more. If you get into the habit of being a frugal grocery shopper you will save yourself hundreds of dollars a year, if not more. Also you should think about shopping in second hand stores and clothing consignment shops. You may be very surprised to discover that you can find some very hip clothing in these types of stores that are in ‘like new’ condition.
The money you save on groceries and clothing can be put toward outstanding bills. Pay those credit cards down and then cut most of them in half. Do you really need to have three credit cards? One should be sufficient.
Instead of planning an extravagant vacation that involves air travel and a hotel stay, consider vacationing closer to home. Camping is a great family activity that costs very little. Americans spend a lot of money on holidays so really give this suggestion a good deal of thought. Why not have a vacation right at home? You could take day trips to the beach, visit the zoo and have barbeque parties right in your own backyard.
These are just a few ways you can save money so that you can pay off your debts. There are many more things you could do including downgrading the type of vehicle you drive, shopping around for life insurance so that you are paying less and much more. Learn to be frugal and pay more than the minimum amount due each month so that you can become debt-free in the future!