Upside Down Mortgage

Archive for April, 2009

Bank Of America Loan Modification Options

Mike Warren Teaches on Judgments, Loan Mod's, Defualted Bank Notes and Social Media for Real Estate

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Subprime Lending Crisis Explained

Question: What is a subprime mortgage?

The US currently suffering from the crisis of subprime mortgage. I have read a couple of answers over here related to what the crisis was about. But I am still not able to make out what a "subprime mortgage" means?

I am from India and as far as my knowledge goes we do not have such type of lending. So could you please explain with a simple example?
I came to know from the below answers to this question that subprime mortgage is a form on lending to someone who even has a bad credit history. This is obviously risky. But why would anyone lend to someone with a bad credit history?

Answer: A sub-prime loan is a loan normally given to someone who has poor credit.

One person said it was a loan where you pay the interest for several years, but nothing on the principal. Well, that is partially true. That is an "interest only loan", which is a type of sub-prime loan.

Another type is a variable rate mortgage. This is where the interest rate is not fixed at the signing of the loan. The interest rate is based on a base amount, such as the prime lending rate, plus some extra, maybe one point, maybe a half of a point, maybe more. When interest rates go down, the loan rate goes down, making your monthly mortgage payment go down, but if it goes up, so does your monthly payment.

An interest only mortgage is normally used by two types of people.
The first type is someone who knows that they are going to be in an area for a short period of time, maybe 3 or 4 years. They are betting on the market rising and they basically pay rent, but when they leave and sell the house, they pay back the principal, and keep any increase in the price of the house.
The second type is someone who may not be able to afford the house right now, but hope that in a few years, they will be making enough money to take the increase in the cost of the mortgage payment. This is simply very, very risky, and this is where most people who are having problems with this type of loan are having problems.

Aramac Financial: REVERSE MORTGAGE VIDEO

Housing Bubble Bottom

Question: What do you prefer? If you have a funnier answer, then inject away.?

20 Questions
1. Chocolate covered strawberries vs. chocolate covered peanuts
2. Woman or man that looks hot as all get out but can't perform well vs. a homely person that will exceed all your previous lovers.
3. Cars vs. Trucks
4. Beach vs. Mountains
5. You on top vs. you on the bottom vs. from behind vs. ?your idea?
6. Movie house vs. Rent DVD's
7. Going out to fine dining restaurants vs. cooking awesome meal at home.
8. Black vs. White (clothes not people).
9. Black vs. Red
10. Blue vs. Green
11. Stability vs. taking risks
12. Fast and Furious vs. Nice and Slow
13. M&M's vs. Twix vs. Kit Kat
14. Cats vs. Dogs
15. Blond vs. Brunette
16. Dark Brown/Black vs. Red
17. Shower vs. Bubble Bath
18. Nature vs. City
19. Art vs. Music.
20. Football vs. Soccer
"What the Crap" - get a life bro!

Answer: the funny ones of course

Bottom of the Stock Market Crash!?!? More Perfect than Peter Schiff, Jim Rogers or Marc Faber!