Upside Down Mortgage

Archive for September, 2007

Fannie Freddie Subprime Loans

Question: Should I wait some weeks before illegaly emigrating to USA?

Rigth now I am reading "The Economist" and their forecast is for more plummeting of US currency, my Gold and Euros will buy more of US properties. What do you think ?
"Even cuts in interest rates, which financial markets are pricing in increasingly aggressively, would not necessarily address the underlying problem. Restoring faith in American mortgage markets, and the cornucopia of investments derived from them, is the bigger challenge. To do that, many had hoped this week that Fannie Mae and Freddie Mac, America’s two governement-sponsored mortgage giants, could step in and mop up some of the subprime loans that the private sector is too fearful to buy. But President George Bush appeared to dismiss such a response on August 8th, which may be another reason why the markets so suddenly lost their nerves once again" - The Economist

Answer: NEVER enter Illegally!

EVIDENCE FOUND!!! Clinton administration's "BANK AFFIRMATIVE ACTION" They forced banks to make BAD LOANS and ACORN and Obama's tie to all of it!!!

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Subprime Loans Explained

Question: What about not finding WMD in Iraq caused this housing loan crash? ?

I know it's Bush's fault, because everything is Bush's fault, but I would like a Democrat to explain how going to war caused this subprime lending fiasco?

Answer: I think it all started when Pelosi was voted to win speaker of the House. When she gives a speech she makes Bush look like a scholar

SUB-PRIME caused by Fraudulent Builder Loans

The Great Subprime Meltdown Of 2007

"Subprime rate" mortgages are deceptively appealing. They have enabled families to buy a home (usually their first home) with little money down, an immediate low, affordable interest rate, and a hope that interest rates won't rise.

From 1938 to 1968, Fannie Mae was a government monopoly, and in 1968 the federal government created competition for Fannie Mae by authorizing the creation of privately-owned Freddie Mac.

Because of the great appeal of lending to families not qualified to obtain a regular mortgage, the lenders set significantly higher interest rates (after expiration of the initial period of less than a year in which the interest rate is artificially low) than are being paid on regular mortgages.

Most of these originating lenders (including Fannie Mae and Freddie Mac) never intended to hold these mortgages. They package and sell mortgages to investors of various types. The originating lenders would generally put together a group of recently-created home mortgages (together with the promissory note and personal guarantees) and sell them as a package to investors or groups of investors often specializing in the acquisition and service of home mortgages.

Another interest obtained by the lender, and assigned to investors, is the right to take back your property in the event of a default, and (if they comply with various rules) wind up owning the property while you, the borrower, still owe them a sizeable amount on the loan, including default interest at a much higher rate, attorneys' fees for the foreclosure proceedings, costs and other expensesIt is not inconceivable that you could wind up owing far more than the principal amount of the loan and lose all interest in your property. This is a neat way for the lender or investor to have his cake and eat it too. The lender still has you owing at least as much and the lender winds up owning the property.

An Associated Press article on March 25, 2007 entitled Senator "Schumer urges more regulation of subprime mortgage rates" stated that over the next few years there is going to be "the biggest foreclosure crisis ever", unless action is taken to prevent "economic forces" from pulling the trigger.  "The subprime market is the wild west of mortgage loans, and it's time we bring a sheriff into town," Schumer said. "The first step is making sure that borrowers are protected from these usurious lenders.

Subprime lenders peddle mortgages that often require no money down and are made at "teaser" interest rates that soon rise. They target marginal borrowers with weak credit or questionable incomes who previously might not have gotten a loan at all. Schumer said an analysis by his office found that an estimated 1.8 million American families are at risk of foreclosure when the rates are reset within two years. Schumer said his bill would establish a suitability standard for borrowers so that lenders won't be able to issue a loan that the borrower cannot afford."

Further information about  the meltdown in the subprime market, look at the Wikipedia article "Subprime Meltdown" at Wikipedia: Subprime Meltdown.

About the Author:

Peter is a leadding expert on the topic of loan modification. His firm The Loan Modification Network connects homeowners with a nationally recognized group of attorneys licensed in all fifty states to assist homeowners in forclosure preventioan strategies and loan modifications. Call 800-437-2185 or go to http://www.us-loan-modification.com to learn more.

Source - About The Subprime Mortgage Metldown

2007: The subprime meltdown