Upside Down Mortgage

Archive for December, 2007

Loan Modification Underwriting

Question: Loan modification is now in underwriting, what does that mean?

Hello,
I called to check on my load mod(after months and months and months,) and I was told that my loan mod has moved from processing to underwriting. Can anyone chime in and tell me does that mean I'm getting close to a loan mod or is this probably another stall tactic?????

I'm desperate but I'd at least like some info!
Thanks.

Answer: Being moved from processing to underwriting means that most of the necessary forms, information and documents have been assembled so that someone can now consider an approval or denial of your loan modification request.

There are several things that the underwriter might consider, they might even ask for additional information or documentation prior to the approval or denial.

You might call, find out who your underwriter is. Then make a direct call to this person to find out the status of your loan modification.

I hope this has been of some benefit to you, good luck.

"FIGHT ON"

Home Loan Modification 7 - Mortgage & Real Estate Marketing Nov08 - Avoid Scams & Huge Loan Mod Fees

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Subprime Federal Reserve

Question: What will our 65 cent dollar be worth now that the Federal Reserve will dump...?

200 Billion to ease the financial crisis created by the subprime corruption?
Since when do bankers gamble with depositors money? No money down on a house means no collateral...100% risk.
You all are talking Voodoo economics here...everyone talks the same talk and it makes no sense to anyone who lives on a budget and shops at the grocery store on a weekly basis watching the cost of milk go up 30 cents as well as everything else.

Answer: Edited Non-"Voodoo Economics" Answer:

You ask two questions:
1) How will the Fed's auction affect inflation
2) What is causing inflation for milk and day-to-day items

1) You're asking how much inflation will go up with $200 Billion put into the economy. It really won't. The $200 Billion is in the form of low-interest 28-day loans to banks. The $100 Billion auctioned yesterday will effectively exit the economy when banks repay it to the Fed next month; same for the $100 billion to be auctioned in two weeks.

It WOULD be inflation if the money was just given out without a corresponding demand for it, ie if the US economy needed $1 Trillion in cash to operate daily, but had $2 Trillion in circulation. The 28-day auction provides a temporary greasing, ie raising the cash in the economy to $1.2 Trillion for one month.

What these loans do is give banks money to lend and make a profit off of - which is where banks do make their money.

You call it gambling, but the truth is that banks in the U.S. make money by lending out funds deposited with them. By Federal statute, banks can lend up to 90% of deposits. This is the only way besides fees that banks make money, and accounts for the bulk of revenue. This is known as the fractional reserve system.

A 100% mortgage is not a mortgage without collateral (since the house still has value) but is a loan in which the borrower has no equity. Equity is just the difference between what the collateral is worth, and what the borrower owes.

2) The source of the inflation we're experiencing isn't monetary - we were feeling it even while interest rates were being increased by the Fed, which meant that money was becoming more scarce. The source is at the production level.

Let's look at milk, which has gone up about 30% in our area in the past two years.

Dairy cows are usually fed corn (unless you buy organic milk produced by free-range cows). The price of corn has gone up tremendously due to three factors:
a) A long-lasting drought in much of the U.S., Australia, and other parts of the world that make corn.
b) American farmers' producing fuel corn for ethanol because it pays better, rather than feed corn.
c) Greater consumption of corn by cattle farmers worldwide to meet the increased demand for beef by the growing Chinese middle class.

In short, more people want more corn, but there's less being grown, so the price goes up. The farmer passes this price to you and I in the form of higher milk and beef prices.

We will see some relief if the droughts alleviate. We may also see some relief if state subsidies for ethanol fizzle, or if scientists figure out how to mass-produce ethanol using garbage instead of corn.

______________________________________________
"Voodoo Economics" Answer

A dollar is still a dollar within the U.S. unless you're buying imported goods. That doesn't help petrol prices, but it makes our exports more competitive.

I doubt the dollar will depreciate much following today's $50 billion auction, or following a similar auction two weeks from now, since these are already anticipated by world markets and have likely been taken into account by market participants.

On a side note, liquidity won't help nearly as much as the successful creation of a securities-repurchasing vehicle, something the Fed tried to coax four investment banks into doing, but none of them hung together. Ironically, such a vehicle, while costing money up front, may have prevented them from having to write off so much of their securities, which would encourage lending to take place. Without such a vehicle, lending rates continue to appreciate not because of economic growth or heightened demand but because of fear and the the resulting premium increase required by investors to compensate for increased perception of risk.

Citigroup Bankruptcy: Federal Reserve & SEC Response

Mortgage Help After Bankruptcy

Question: Are there any banks that will give me a mortgage after bankruptcy?

I went bankrupt 1 year ago, and while I'm not looking into buying a house just yet, I don't really want to have to wait another 6 years if I don't have to. Does anyone know of any banks (in Canada) that would let me get a mortgage before my bankruptcy is off of my credit bureau?

Answer: If 1 year has passed by, I believe that yes you can get a mortgage with some finessing. There are always more than one way to skin a cat. (figure of speech).

The only thing is that it may not be one of the 5 chartered banks of Canada, but there are other financial institutions that will.

Please take a look at CMHC (Canadian Mortgage Housing Corporation). I believe the website to be www.cmhc.ca

I have helped people from bankruptcy and put them into a home, helped them with getting a mortgage, and getting back on their feet.

The Truth About Bankruptcy