Friday, November 14, 2008
Wednesday, October 8, 2008
Not sure where the bailout money is going?
AIG throws $440,000 party after bailout
WASHINGTON – Days after it got a federal bailout, American International Group Inc. (AIG) spent $440,000 on a posh California retreat for its executives, complete with spa treatments, banquets and golf outings, according to lawmakers investigating the company’s meltdown.
AIG sent its executives to the coastal St. Regis resort south of Los Angeles even as the company tapped into an $85-billion loan from the government it needed to stave off bankruptcy. The resort tab included $23,380 worth of spa treatments for AIG employees, according to invoices the resort turned over to the House Oversight and Government Reform Committee.
The retreat didn’t include anyone from the financial products division that nearly drove AIG under, but lawmakers still were enraged over thousands of dollars spent on outing for executives of AIG’s main US life insurance subsidiary.
“Average Americans are suffering economically. They’re losing their jobs, their homes and their health insurance,” the committee’s chairman, Rep. Henry Waxman, scolded the company during a lengthy opening statement at a hearing Tuesday. “Yet less than one week after the taxpayers rescued AIG, company executives could be found wining and dining at one of the most exclusive resorts in the nation.”
Former AIG CEO Robert Willumstad, who lost his job a day after the Federal Reserve put up the $85 billion on Sept. 16, said he was not familiar with the conference and would not have gone along with it.
“It seems very inappropriate,” Willumstad said in response to questioning from Rep. Elijah Cummings.
“Those executives should be fired,” Democratic presidential candidate Sen. Barack Obama said at a debate with Sen. John McCain on Tuesday, referring to the retreat participants. Obama also said AIG should give the Treasury $440,000 to cover the costs of the retreat.
But Eric Dinallo, superintendent of the New York State Insurance Department, said he could see the value of such a retreat under the circumstances.
“Having been at large global companies and knowing what condition AIG was in ... the absolute worst thing that could have happened” would have been for employees and underwriters in its life insurance subsidiary to flee the company.
“I do agree there is some profligate spending there, but the concept of bringing all the major employees together ... to ensure that the $85 billion could be as greatly as possible paid back, would have been not a crazy corporate decision,” Dinallo told the House committee.
The hearing disclosed that AIG executives hid the full range of its risky financial products from auditors as losses mounted, according to documents released by the committee, which is examining the chain of events that forced the government to bail out the conglomerate.
The panel sharply criticized AIG’s former top executives, who cast blame on each other for the company’s financial woes.
“You have cost my constituents and the taxpayers of this country $85 billion and run into the ground one of the most respected insurance companies in the history of our country,” said Rep. Carolyn Maloney. “You were just gambling billions, possibly trillions of dollars.”
AIG, crippled by huge losses linked to mortgage defaults, was forced last month to accept the $85-billion government loan that gives the US the right to an 80 percent stake in the company.
Waxman unveiled documents showing AIG executives hid the full extent of the firm’s risky financial products from auditors, both outside and inside the firm, as losses mounted.
For instance, federal regulators at the Office of Thrift Supervision warned in March that “corporate oversight of AIG Financial Products ... lack critical elements of independence.” At the same time, PricewaterhouseCoopers confidentially warned the company that the “root cause” of its mounting problems was denying internal overseers in charge of limiting AIG’s exposure access to what was going on in its highly leveraged financial products branch.
Waxman also released testimony from former AIG auditor Joseph St. Denis, who resigned after being blocked from giving his input on how the firm estimated its liabilities.
Three former AIG executives were summoned to appear before the hearing. One of them, Maurice “Hank” Greenberg – who ran AIG for 38 years until 2005 – canceled his appearance citing illness but submitted prepared testimony. In it, he blamed the company’s financial woes on his successors, former CEOs Martin Sullivan and Willumstad.
“When I left AIG, the company operated in 130 countries and employed approximately 92,000 people,” Greenberg said. “Today, the company we built up over almost four decades has been virtually destroyed.”
Sullivan and Willumstad, in turn, cast much of the blame on accounting rules that forced AIG to take tens of billions of dollars in losses stemming from exposure to toxic mortgage-related securities.
Lawmakers also upbraided Sullivan, who ran the firm from 2005 until June of this year, for urging AIG’s board of directors to waive pay guidelines to win a $5-million bonus for 2007 – even as the company lost $5 billion in the 4th quarter of that year. Sullivan countered that he was mainly concerned with helping other senior executives. – AP
Wednesday, July 30, 2008
Federal Housing Finance Agency
FEDERAL HOUSING FINANCE AGENCY
STATEMENT
--------------------------------------------------------------------------------
For Immediate Release
July 30, 2008
STATEMENT OF DIRECTOR
JAMES B. LOCKHART
ON THE CREATION OF FHFA
“Today President Bush signed the ‘Housing and Economic Recovery Act of 2008.’ I thank President Bush and Secretary Paulson for their leadership in making government-sponsored enterprise (GSE) regulatory reform a reality.
The Act creates a world-class, empowered regulator, the Federal Housing Finance Agency (FHFA), with all the authorities necessary to oversee vital components of our country’s secondary mortgage markets -- Fannie Mae, Freddie Mac and the Federal Home Loan Banks -- at a very challenging time. As Director of the new agency I look forward to working with the combined Federal Housing Finance Board (FHFB), Office of Federal Housing Enterprise Oversight (OFHEO) and Housing and Urban Development (HUD) GSE Mission teams and with other regulators to ensure the safety and soundness of the 14 housing-related GSEs and the stability of the nation’s housing finance system.
For more than two years as Director of OFHEO I have worked to help create FHFA so that this new GSE regulator has far greater authorities than its predecessors. As Director of FHFA, I commit that we will use these authorities to ensure that the housing GSEs provide stability and liquidity to the mortgage market, support affordable housing, and operate safely and soundly.”
###
STATEMENT
--------------------------------------------------------------------------------
For Immediate Release
July 30, 2008
STATEMENT OF DIRECTOR
JAMES B. LOCKHART
ON THE CREATION OF FHFA
“Today President Bush signed the ‘Housing and Economic Recovery Act of 2008.’ I thank President Bush and Secretary Paulson for their leadership in making government-sponsored enterprise (GSE) regulatory reform a reality.
The Act creates a world-class, empowered regulator, the Federal Housing Finance Agency (FHFA), with all the authorities necessary to oversee vital components of our country’s secondary mortgage markets -- Fannie Mae, Freddie Mac and the Federal Home Loan Banks -- at a very challenging time. As Director of the new agency I look forward to working with the combined Federal Housing Finance Board (FHFB), Office of Federal Housing Enterprise Oversight (OFHEO) and Housing and Urban Development (HUD) GSE Mission teams and with other regulators to ensure the safety and soundness of the 14 housing-related GSEs and the stability of the nation’s housing finance system.
For more than two years as Director of OFHEO I have worked to help create FHFA so that this new GSE regulator has far greater authorities than its predecessors. As Director of FHFA, I commit that we will use these authorities to ensure that the housing GSEs provide stability and liquidity to the mortgage market, support affordable housing, and operate safely and soundly.”
###
Tuesday, July 22, 2008
Monday, July 21, 2008
Refinance Debt with an FHA Loan
FHA allows high loan to value to consolidate debt
Refinancing debt with an FHA loan to consolidate multiple bills into one new loan has become a popular option for homeowners. FHA, the Federal Housing Administration allows homeowners to borrow up to 95% of their home's value for a cash out refinance. This cash out can be used to refinance debt the homeowner has including: credit cards, student loans, automobile loans, personal loans, and second mortgages or home equity lines of credit.
This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A cash out refinance allows homeowners to refinance their existing mortgage by getting a new mortgage for more than they currently owe, the difference after paying closing costs and the new escrow account is the cash out. This allows homeowners to access the equity they have built up in their home. FHA does require the homeowner to have owned their current home for at least one year before obtaining a cash out refinance.
Taking consumer debt and converting it into a mortgage can be financially beneficial. Refinancing expensive credit card debt into a tax deductible, low rate mortgage can be a good thing as long as future credit card charges are paid off in full monthly.
Congress created the Federal Housing Administration in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965. FHA guidelines are unique in that they give more flexibility for qualifying than do conventional loans.
Additionally, FHA interest rates are very low when considering this flexibility and comparing rates to a conventional loan, second mortgage or home equity line of credit. Unlike conventional loans, there is no significant increase in interest rate when going to a maximum loan to value cash out.
FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely.
The downside of taking an FHA loan is the "Mortgage Insurance Premium," or MIP. Although MIP has recently dropped to 1.25% of the loan amount for borrowers with excellent credit and increases to 1.5% for borrower whose credit is not as good.
The FHA and HUD have insured over 34 million home mortgages and 47,205 multifamily project mortgages since 1934. FHA currently has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.
article
Refinancing debt with an FHA loan to consolidate multiple bills into one new loan has become a popular option for homeowners. FHA, the Federal Housing Administration allows homeowners to borrow up to 95% of their home's value for a cash out refinance. This cash out can be used to refinance debt the homeowner has including: credit cards, student loans, automobile loans, personal loans, and second mortgages or home equity lines of credit.
This refinancing option is especially beneficial to homeowners whose property has increased in market value since the home was purchased. A cash out refinance allows homeowners to refinance their existing mortgage by getting a new mortgage for more than they currently owe, the difference after paying closing costs and the new escrow account is the cash out. This allows homeowners to access the equity they have built up in their home. FHA does require the homeowner to have owned their current home for at least one year before obtaining a cash out refinance.
Taking consumer debt and converting it into a mortgage can be financially beneficial. Refinancing expensive credit card debt into a tax deductible, low rate mortgage can be a good thing as long as future credit card charges are paid off in full monthly.
Congress created the Federal Housing Administration in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965. FHA guidelines are unique in that they give more flexibility for qualifying than do conventional loans.
Additionally, FHA interest rates are very low when considering this flexibility and comparing rates to a conventional loan, second mortgage or home equity line of credit. Unlike conventional loans, there is no significant increase in interest rate when going to a maximum loan to value cash out.
FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA is the only government agency that operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely.
The downside of taking an FHA loan is the "Mortgage Insurance Premium," or MIP. Although MIP has recently dropped to 1.25% of the loan amount for borrowers with excellent credit and increases to 1.5% for borrower whose credit is not as good.
The FHA and HUD have insured over 34 million home mortgages and 47,205 multifamily project mortgages since 1934. FHA currently has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.
article
Thursday, July 3, 2008
Mortgage Overload
Why do Loan Officers and mortgage companies offer every possible loan under the sun? Even though so many loan programs have evaporated in the last year, there are still, just to name a few:
FHA/VA/Fannie Mae/Freddie Mac/jumbo/super jumbo/DPA programs/stated inc/investor/purchase/refinance/option arms/commercial/subprime/sisa/no doc/mixed use properties/hard money/non-warrantable condos/rural properties/lot loans/construction to perm loans.... I can go on and on.
All are different animals. All have different guidelines that constantly change. You can even mix and match to create more categories. It's too much for one person or company or even a website to do. Or at least to do it right.
Where I'm going with this is LO's and Mortgage Companies need to focus on a select niche to best serve their clients and to be successful. It's ok to say "We only do this" or "We don't do that". However, LO's sure have a tough time saying that to clients or Realtors they work with.
Other industries have figured that out. The mortgage industry has yet to. Doctors specialize in certain medicine. Attorneys practice certain categories of law. Even restaurants only serve certain types of food. Ever see a Greek/Italian/Mexican/American/Sushi/Chinese/Korean/BBQ/Steak House? Of course not, the food would be terrible. That's how it is in the mortgage industry.
This refinance calculator focuses on consolidating debt and gives a complete analysis while you remain anonymous. Avoid the hassle of four lenders calling.
FHA/VA/Fannie Mae/Freddie Mac/jumbo/super jumbo/DPA programs/stated inc/investor/purchase/refinance/option arms/commercial/subprime/sisa/no doc/mixed use properties/hard money/non-warrantable condos/rural properties/lot loans/construction to perm loans.... I can go on and on.
All are different animals. All have different guidelines that constantly change. You can even mix and match to create more categories. It's too much for one person or company or even a website to do. Or at least to do it right.
Where I'm going with this is LO's and Mortgage Companies need to focus on a select niche to best serve their clients and to be successful. It's ok to say "We only do this" or "We don't do that". However, LO's sure have a tough time saying that to clients or Realtors they work with.
Other industries have figured that out. The mortgage industry has yet to. Doctors specialize in certain medicine. Attorneys practice certain categories of law. Even restaurants only serve certain types of food. Ever see a Greek/Italian/Mexican/American/Sushi/Chinese/Korean/BBQ/Steak House? Of course not, the food would be terrible. That's how it is in the mortgage industry.
This refinance calculator focuses on consolidating debt and gives a complete analysis while you remain anonymous. Avoid the hassle of four lenders calling.
Wednesday, July 2, 2008
Inflation and Interest Rates Soar
U.S. Cost of Living Increases in 2008, Economy Teetering on Recession
Over the last few months, a staggering rise in food and energy prices combined with what many consider to be a much too weak dollar have pushed up the inflation rate to its highest level in many years, already reaching 4% in the first six months of 2008 (inflation rose 4.1% in all of 2007, and that was considered high). Although in the United States the real world price factors that are contributing to the rise in the overall inflation rate are contained within the food and energy industries, that's not much comfort for people buying groceries, gasoline, and heating or air conditioning for their home. Higher transportation costs have partly been to blame for the rise in food prices.
Some economic commentators have noted positively, however, that the Federal Reserve and its Chairman Ben Bernanke are aware of their own monetary policy mistakes of the 1920s and 1930s with the Great Depression and again in the 1970s, which experienced caused the dreaded "stagflation" throughout most of the decade, where sluggish economic growth was accompanied by very high inflation. By being more careful not to do anything extreme or drastic to interest rates, the Fed is attempting to contain the national inflation rate and let the market forces driving it make their own correction.
Princeton economist Paul Krugman feels the Federal Reserve has definitely learned from past mistakes. Krugman stated " During the Great Depression, the Fed was only concerned about protecting the nation's gold reserves, and the federal government believed that austerity and cutting spending was the answer to recession. I think we know more now than we did then and just the fact that we have a big federal government is a stabilizing factor. But the current problem is still pretty awesome."
The U.S. Congress continues to drag its feet over legislation to free up much more territory for private oil and gas company's exploration and drilling while at once giving what many realize are perverse incentives to literally burn up our food supply to power our cars. None of this will do anything to ease energy and food prices.
Mortgage Rates Also Up
As if inflation concerns aren't enough for many people, mortgage interest rates are at their highest level in nine months. The housing market bubble, driven by long-standing government mandates for creative loan packages intended to get practically every American adult a home of their own, burst about a year ago. With lenders and their investment backers losing loads of money hand over fist as people across the nation defaulted on their mortgages and lose their homes, lenders' purse strings have tightened. It's now harder to qualify for a mortgage than it was just one year ago, and if you do get one you're likely to pay for other's mistakes through higher interest rates.
Government-backed mortgage company Freddie Mac reported on June 19th that 30-year fixed-rate mortgages averaged 6.42 percent. One year ago that rate averaged just 6.08%.
What it all adds up to for the average American is that the cost of living has gone up noticeably, and it may continue to do so for some time.
mortgage refinance calculator
Over the last few months, a staggering rise in food and energy prices combined with what many consider to be a much too weak dollar have pushed up the inflation rate to its highest level in many years, already reaching 4% in the first six months of 2008 (inflation rose 4.1% in all of 2007, and that was considered high). Although in the United States the real world price factors that are contributing to the rise in the overall inflation rate are contained within the food and energy industries, that's not much comfort for people buying groceries, gasoline, and heating or air conditioning for their home. Higher transportation costs have partly been to blame for the rise in food prices.
Some economic commentators have noted positively, however, that the Federal Reserve and its Chairman Ben Bernanke are aware of their own monetary policy mistakes of the 1920s and 1930s with the Great Depression and again in the 1970s, which experienced caused the dreaded "stagflation" throughout most of the decade, where sluggish economic growth was accompanied by very high inflation. By being more careful not to do anything extreme or drastic to interest rates, the Fed is attempting to contain the national inflation rate and let the market forces driving it make their own correction.
Princeton economist Paul Krugman feels the Federal Reserve has definitely learned from past mistakes. Krugman stated " During the Great Depression, the Fed was only concerned about protecting the nation's gold reserves, and the federal government believed that austerity and cutting spending was the answer to recession. I think we know more now than we did then and just the fact that we have a big federal government is a stabilizing factor. But the current problem is still pretty awesome."
The U.S. Congress continues to drag its feet over legislation to free up much more territory for private oil and gas company's exploration and drilling while at once giving what many realize are perverse incentives to literally burn up our food supply to power our cars. None of this will do anything to ease energy and food prices.
Mortgage Rates Also Up
As if inflation concerns aren't enough for many people, mortgage interest rates are at their highest level in nine months. The housing market bubble, driven by long-standing government mandates for creative loan packages intended to get practically every American adult a home of their own, burst about a year ago. With lenders and their investment backers losing loads of money hand over fist as people across the nation defaulted on their mortgages and lose their homes, lenders' purse strings have tightened. It's now harder to qualify for a mortgage than it was just one year ago, and if you do get one you're likely to pay for other's mistakes through higher interest rates.
Government-backed mortgage company Freddie Mac reported on June 19th that 30-year fixed-rate mortgages averaged 6.42 percent. One year ago that rate averaged just 6.08%.
What it all adds up to for the average American is that the cost of living has gone up noticeably, and it may continue to do so for some time.
mortgage refinance calculator
Tuesday, June 24, 2008
The 9 Credit Reporting Rights of Every Consumer
Consumers have legal rights to correct mistakes
Good credit is essential for everything from buying a car or new home to applying for a job. Credit reports are compiled by credit bureaus with information gathered from creditors. The three largest credit bureaus are Experian, TransUnion, and Equifax.
Not all creditors report information accurately or completely to the bureaus. The Fair Credit Reporting Act (FCRA) is a federal law that was enacted to regulate the collection and use of consumer credit information. It requires compliance from credit bureaus to protect the consumer and forms the base of consumer credit rights.
The FCRA is designed to promote accuracy, fairness, and privacy of information in the files of every credit bureau. Most credit bureaus gather and sell information on you. For example, whether or not you pay your bills on time or have filed bankruptcy. This information is potentially given to creditors, employers, landlords, and other businesses.
One of the most important provisions of the FCRA allows a consumer to dispute information on a credit report. In turn, the credit bureau must either remove the disputed information from the credit report or verify its truth with the creditor if that information is to be left on the credit report.
A study released by the U.S. Public Interest Research Group found that 79% of the consumer credit reports surveyed contained some kind of error or mistake. Consumers affected can invoke their rights under the FCRA to review and correct their credit reports.
The FCRA gives consumers 9 specific rights:
Right #1- Consumers can challenge the accuracy of a credit report at any time.
Right #2- The credit bureau must investigate anything challenged.
Right #3- The credit bureau must investigate within 30 days.
Right #4- Access to a consumer's credit information is limited.
Right #5- If the credit bureau does not or cannot confirm the information challenged within 30 days, it must delete the information from the credit report .
Right #6- If a creditor verifies the information challenged, the negative marks must remain on record. Consumers have the right to maintain the information reported is in dispute and can submit a Consumer Statement of the issue. This statement (100 words max) is then attached to every report that is sent out to explain the consumer's side.
Right #7- Consumers must be told if information on their report has been used against them.
Right #8- If a consumer is denied credit within the last 60 days, they are entitled to a free copy of their credit report.
Right #9- A consumer's consent is required for reports that are provided to employers or that contain medical information.
The length of time information remains on a credit report for credit and collection accounts is seven years from the date of last activity, for courthouse Records is seven years from the date filed, and for bankruptcy chapters 7 and 11 are ten years from the date filed. The complete statute of the FCRA is located at http://www.ftc.gov/
Adjustable Rate Mortgages are On the Rise
What you need to know to save money with the increasing rates.
There is an estimated two million 3 and 5 year adjustable rate mortgages (ARMs
) set to adjust in coming months. The adjustable rate mortgages that are about
to adjust are all predicted to go up as high as fifty percent. This fact has many homeowners ready to panic since there are around five billion to one trillion dollars worth of adjustable rate mortgages that are on the rise.
The good news is that by having an adjustable rate mortgage you have already seen a savings in interest of thousands over the last few years. Now if you are worried that the new rate for your ARM is going to be a bit more than you can manage there is good news there as well. The options that exist for those facing an increase in both interest rates and monthly mortgage payments may surprise you.
Many Homeowners Need Not Worry
There are options for refinancing to a fixed rate mortgage. If you are worried about basically starting over with a mortgage that you are nearly through paying off you shouldn't be. By refinancing to a fixed rate mortgage you will no longer have to worry about your interest rate adjusting every few months as the market works to find some measure of stability. In the event that you cannot find a fixed rate that you are comfortable with then there is also the option of refinancing your home with another mortgage with an adjustable rate.
When you refinance to another adjustable rate mortgage it provides you with a lower interest rate that is set for a specified amount of time, usually 3 to 5 years. Both of these options will save you on the currently increasing rates. Even an interest increase of one percent can make payments go up from a hundred to five hundred dollars or more a month.
Since the adjustable rate mortgage will follow the market trend check a reliable refinance calculator on the web. When you refinance not only do you have the possibility of a lower interest rate you could possibly lower the monthly payment.
Some homeowners are opting for a fixed rate mortgage in order to get the security that goes with knowing that the rate will not increase in the future. Due to the current status of the market the interest rate for a thirty year fixed rate mortgage is not much higher than it is for a short term adjustable rate mortgage.
Those with hybrid mortgages that are fixed for a time then adjust should look into refinancing now. Once the adjustable rates kick in there is the possibility of having higher payments and interest rates. If you are in an adjustable rate at the present time it is, of course, in your best interest to refinance before your payments start to increase. If you have a home equity line of credit or second mortgage, more than likely the interest rate has already increased dramatically and it will be better to consolidate that into the refinance.
There is an estimated two million 3 and 5 year adjustable rate mortgages (ARMs
) set to adjust in coming months. The adjustable rate mortgages that are about
to adjust are all predicted to go up as high as fifty percent. This fact has many homeowners ready to panic since there are around five billion to one trillion dollars worth of adjustable rate mortgages that are on the rise.
The good news is that by having an adjustable rate mortgage you have already seen a savings in interest of thousands over the last few years. Now if you are worried that the new rate for your ARM is going to be a bit more than you can manage there is good news there as well. The options that exist for those facing an increase in both interest rates and monthly mortgage payments may surprise you.
Many Homeowners Need Not Worry
There are options for refinancing to a fixed rate mortgage. If you are worried about basically starting over with a mortgage that you are nearly through paying off you shouldn't be. By refinancing to a fixed rate mortgage you will no longer have to worry about your interest rate adjusting every few months as the market works to find some measure of stability. In the event that you cannot find a fixed rate that you are comfortable with then there is also the option of refinancing your home with another mortgage with an adjustable rate.
When you refinance to another adjustable rate mortgage it provides you with a lower interest rate that is set for a specified amount of time, usually 3 to 5 years. Both of these options will save you on the currently increasing rates. Even an interest increase of one percent can make payments go up from a hundred to five hundred dollars or more a month.
Since the adjustable rate mortgage will follow the market trend check a reliable refinance calculator on the web. When you refinance not only do you have the possibility of a lower interest rate you could possibly lower the monthly payment.
Some homeowners are opting for a fixed rate mortgage in order to get the security that goes with knowing that the rate will not increase in the future. Due to the current status of the market the interest rate for a thirty year fixed rate mortgage is not much higher than it is for a short term adjustable rate mortgage.
Those with hybrid mortgages that are fixed for a time then adjust should look into refinancing now. Once the adjustable rates kick in there is the possibility of having higher payments and interest rates. If you are in an adjustable rate at the present time it is, of course, in your best interest to refinance before your payments start to increase. If you have a home equity line of credit or second mortgage, more than likely the interest rate has already increased dramatically and it will be better to consolidate that into the refinance.
New Mortgage Sites Give Quotes Without a Catch
Empowering consumers with anonymous, hassle-free answers marks change in industry
For years, well-known mortgage sites have operated by collecting a borrower's contact information and selling it to four lenders who call with a quote. Of course, this can lead to unwanted calls, spam, and junk mail.
New mortgage sites are reversing that model by offering answers without requiring any personal information. This signals a new trend in the mortgage industry: Putting borrowers in control by giving quotes with complete anonymity. Borrowers are provided with answers and then decide if they want to contact a lender without the hassle of lenders calling them.
This trend to empower borrowers is being led by three sites, each with a different approach and focus:
Zillow Mortgage Marketplace - purchase or refinance - Zillow recently launched its Mortgage Marketplace where borrowers and lenders come together in an open, anonymous, and free marketplace. Borrowers submit mortgage requests anonymously and then an unlimited number of mortgage lenders can respond to borrowers' private Zillow accounts by submitting mortgage quotes. Borrowers are anonymous to lenders.
Name, address, phone number or Social Security number is not required. Based on the information provided, mortgage quotes, from an unlimited number of lenders, will be sent to the private Mortgage Quotes section on Zillow. The borrower can then contact the lender, either by e-mail or phone, and ask more questions about the loan quote or apply for the loan.
LionSaves - refinance, debt consolidation - This mortgage refinance calculator focuses on consolidating debt and gives a complete analysis while you remain anonymous. LionSaves is a HUD approved lender that uses FHA and Fannie Mae mortgage refinances to consolidate debt, for which the savings potential can be high. Designed for a borrower with a few debts to consolidate, it request information without requiring any contact info. The site performs a thorough and more personalized analysis to give a debt consolidation/mortgage quote based on real time interest rates while the borrower maintains their privacy.
If there isn't enough equity to payoff all debts, it prioritizes credit card payoffs to maximize monthly savings. Borrowers can play with "what-if" scenarios and view different loan options while they remain anonymous until they choose to apply for the loan with LionSaves.
Mortgage Marvel - purchase or refinance- MortgageMarvel provides a connection portal to different lenders. It requests basic information, including the loan amount, property value and ZIP code, then returns a list of rates offered by specific lenders. Mortgage Marvel gives quotes in complete privacy.
It enables the borrower to get rough quotes quickly by entering only three pieces of non-private information, this requires a few assumptions, which are listed at the top of the results page. It displays up-to-date mortgage rate and fee quotes from multiple lenders in an easy-to-understand table to compare rates, fees, and disclosures. Borrowers can get a quick look at interest rates for the loan they are considering, and then click directly to a lender’s site to complete a loan application.
For years, well-known mortgage sites have operated by collecting a borrower's contact information and selling it to four lenders who call with a quote. Of course, this can lead to unwanted calls, spam, and junk mail.
New mortgage sites are reversing that model by offering answers without requiring any personal information. This signals a new trend in the mortgage industry: Putting borrowers in control by giving quotes with complete anonymity. Borrowers are provided with answers and then decide if they want to contact a lender without the hassle of lenders calling them.
This trend to empower borrowers is being led by three sites, each with a different approach and focus:
Zillow Mortgage Marketplace - purchase or refinance - Zillow recently launched its Mortgage Marketplace where borrowers and lenders come together in an open, anonymous, and free marketplace. Borrowers submit mortgage requests anonymously and then an unlimited number of mortgage lenders can respond to borrowers' private Zillow accounts by submitting mortgage quotes. Borrowers are anonymous to lenders.
Name, address, phone number or Social Security number is not required. Based on the information provided, mortgage quotes, from an unlimited number of lenders, will be sent to the private Mortgage Quotes section on Zillow. The borrower can then contact the lender, either by e-mail or phone, and ask more questions about the loan quote or apply for the loan.
LionSaves - refinance, debt consolidation - This mortgage refinance calculator focuses on consolidating debt and gives a complete analysis while you remain anonymous. LionSaves is a HUD approved lender that uses FHA and Fannie Mae mortgage refinances to consolidate debt, for which the savings potential can be high. Designed for a borrower with a few debts to consolidate, it request information without requiring any contact info. The site performs a thorough and more personalized analysis to give a debt consolidation/mortgage quote based on real time interest rates while the borrower maintains their privacy.
If there isn't enough equity to payoff all debts, it prioritizes credit card payoffs to maximize monthly savings. Borrowers can play with "what-if" scenarios and view different loan options while they remain anonymous until they choose to apply for the loan with LionSaves.
Mortgage Marvel - purchase or refinance- MortgageMarvel provides a connection portal to different lenders. It requests basic information, including the loan amount, property value and ZIP code, then returns a list of rates offered by specific lenders. Mortgage Marvel gives quotes in complete privacy.
It enables the borrower to get rough quotes quickly by entering only three pieces of non-private information, this requires a few assumptions, which are listed at the top of the results page. It displays up-to-date mortgage rate and fee quotes from multiple lenders in an easy-to-understand table to compare rates, fees, and disclosures. Borrowers can get a quick look at interest rates for the loan they are considering, and then click directly to a lender’s site to complete a loan application.
Wednesday, June 4, 2008
Most Lenders Don't Want You To Know This Refinance Tip
This key number can negate refinancing.
Whether you need the extra money for bills, home improvement, or your child’s college education or you simply want a lower interest rate, refinancing your mortgage is an option homeowners can consider.
Most homeowners, however, don’t look at one of the most important factors when deciding if refinancing is the right choice for them. This factor is the Payback Period.
What is the Payback Period?
Payback Period is an economics term that refers to the amount of time it takes an investor to recoup his or her original investment. For example, if you gave a friend $1,000 to start a business, the payback period would be the amount of time it took for your friend to return that $1,000 to you.
In terms of mortgage refinancing, the Payback Period is how long it takes for the monthly savings on the refinancing to equal or exceed the closing costs of the new loan.
Calculating the Payback Period
While you can use a refinance calculator to figure out the exact payback period for your situation, let’s look at a hypothetical example to illustrate how those calculations are determined.
Let’s say you refinance your home and end up saving roughly $300 per month because of the reduced interest rate and the lower principal (by the time you refinance you should have already paid a chunk of your home’s cost). The closing costs associated with that loan are $3,500. The question is – based on these numbers – how long the payback period would be.
To find the answer, you simply divide the closing costs by the monthly savings. In this case, that would be $3,500 divided by $300. The result would be just over 11.6 months, so the payback period for this mortgage would be almost one full year.
Why Does the Payback Period Matter?
Knowing the payback period, whether you do the calculations by hand or use a refinance calculator, can help you determine whether refinancing is the best choice at this time. Let’s come back to the example we used above.
If you are planning to put the house on the market in six months, then you’ll be selling the house before you’ve been able to recoup your investment through the savings. That would be an unwise investment decision.
On the other hand, if you have no plans to sell within the next year, you would accumulate enough monthly savings to make the investment in the refinancing worth the cost.
Other Factors to Consider
Using a refinance calculator can help you determine the payback period, but there are other factors you want to consider as well. For example, if you refinance a home you’ve been paying on for five years then you need to consider if the extra savings will also be enough to cover the additional five years of interest you will be paying on the loan.
If you took out the original loan in 2008, the loan should have been paid in full by 2038. If you refinance after 5 years, you won’t pay the mortgage off until 2043. Those extra years could add on enough interest to outweigh your initial monthly savings.
Related blog
Whether you need the extra money for bills, home improvement, or your child’s college education or you simply want a lower interest rate, refinancing your mortgage is an option homeowners can consider.
Most homeowners, however, don’t look at one of the most important factors when deciding if refinancing is the right choice for them. This factor is the Payback Period.
What is the Payback Period?
Payback Period is an economics term that refers to the amount of time it takes an investor to recoup his or her original investment. For example, if you gave a friend $1,000 to start a business, the payback period would be the amount of time it took for your friend to return that $1,000 to you.
In terms of mortgage refinancing, the Payback Period is how long it takes for the monthly savings on the refinancing to equal or exceed the closing costs of the new loan.
Calculating the Payback Period
While you can use a refinance calculator to figure out the exact payback period for your situation, let’s look at a hypothetical example to illustrate how those calculations are determined.
Let’s say you refinance your home and end up saving roughly $300 per month because of the reduced interest rate and the lower principal (by the time you refinance you should have already paid a chunk of your home’s cost). The closing costs associated with that loan are $3,500. The question is – based on these numbers – how long the payback period would be.
To find the answer, you simply divide the closing costs by the monthly savings. In this case, that would be $3,500 divided by $300. The result would be just over 11.6 months, so the payback period for this mortgage would be almost one full year.
Why Does the Payback Period Matter?
Knowing the payback period, whether you do the calculations by hand or use a refinance calculator, can help you determine whether refinancing is the best choice at this time. Let’s come back to the example we used above.
If you are planning to put the house on the market in six months, then you’ll be selling the house before you’ve been able to recoup your investment through the savings. That would be an unwise investment decision.
On the other hand, if you have no plans to sell within the next year, you would accumulate enough monthly savings to make the investment in the refinancing worth the cost.
Other Factors to Consider
Using a refinance calculator can help you determine the payback period, but there are other factors you want to consider as well. For example, if you refinance a home you’ve been paying on for five years then you need to consider if the extra savings will also be enough to cover the additional five years of interest you will be paying on the loan.
If you took out the original loan in 2008, the loan should have been paid in full by 2038. If you refinance after 5 years, you won’t pay the mortgage off until 2043. Those extra years could add on enough interest to outweigh your initial monthly savings.
Related blog
Tuesday, May 27, 2008
Why be sold off as a "lead" to, well...who knows who?
For years now, well-known mortgage sites such as LendingTree, LowerMyBills and NexTag have operated by collecting a borrower's contact information and selling it off as a lead to four lenders who call with a quote. Known as lead generators, these sites all offer the same promise of having multiple lenders compete for your business.
However, the end result typically turns into a huge hassle of relentless sales calls, spam, and junk mail for the borrower. Some sites actually sell collected info to other sites, continuing the cycle of more pushy sales calls at dinner, work and elsewhere.
Plus, these sites don't look for the lenders with the lowest interest rate, just lenders who are willing to pay their expensive lead fees. These lead fees, ironically, prevent you from getting the lowest rate possible.
Here's an interesting television report on the hassle of it.
Enter the Next Generation Mortgage Site
If you don't want to fend off sales pitches by phone or e-mail, there's been no other option until now. LionSaves is a leading debt consolidation calculator that shows how much you can save while you remain anonymous. An anonymous refi quote lets you avoid the hassle of four lenders calling.
Sure, there are plenty of basic refinance calculators out there that let you enter whatever interest rate and loan amount you want even though they don't apply to your situation. But what good is a calculator that give you inaccurate and incomplete results? It's useless.
This debt consolidation loan calculator is the next level. It's like talking to a loan officer that's been programmed into the site. It's an idea whose time has come because it puts you in control by giving an accurate and complete analysis while letting you remain anonymous. That's the true power of the internet.
Monday, May 19, 2008
Anonymous Mortgage Quote
Have you ever tried to get an anonymous mortgage quote online? Yeah, I know, it's a joke. You'll either get bogus information or go through several screens only to have to give your name, e-mail and phone number so four (or more) lenders can hassle you for the next two weeks.
If your a homeowner with some debt try this site: www.LionSaves.com
It shows you instantly how much you can save by consolidating debt into a refi. It does a complete analysis (including title fees, escrow and FHA loans) while you remain anonymous. It gives you a good faith estimate, all loan options and you can play with what-if scenarios without giving your name or e-mail.
Hop on now and get your analysis; it only takes a few minutes.
If your a homeowner with some debt try this site: www.LionSaves.com
It shows you instantly how much you can save by consolidating debt into a refi. It does a complete analysis (including title fees, escrow and FHA loans) while you remain anonymous. It gives you a good faith estimate, all loan options and you can play with what-if scenarios without giving your name or e-mail.
Hop on now and get your analysis; it only takes a few minutes.
Tuesday, April 15, 2008
LionSaves.com Offers Hassle-Free Mortgage, Debt Consolidation Guidance
Homeowners seeking mortgage guidance can trigger aggressive sales calls by revealing personal info too soon. Now a new website offers free, custom mortgage/debt consolidation analysis without requiring identifying info.
Mortgage lender LionSaves.com is offering loan information without requiring any personal information for people seeking answers to their loan questions.
The trouble is that some well-known mortgage-related websites and businesses aren't actual lenders but rather sales lead generators. They collect the homeowner's name, number and e-mail then sell it off to multiple lenders or websites, which typically pay a $20,000 financing fee and $400 per transaction based on homeowner sales leads. This, of course, leads to pushy sales calls, email spam, junk mail and higher rates, none of which has the homeowner's situation or best interest in mind.
"I got repeated, unwelcome calls at work from someone saying I'd inquired about mortgage refinancing," says Tim Brown, a homeowner in Centennial, Colorado. "I may have inquired years ago, but it wasn't with this outfit and I wouldn't have left my work number with them."
igh-pressure "bait and switch" style sales tactics, such as promoting a 1% interest rate or a really low payment -- which quickly increase after getting the loan -- can lead homeowners into deeper trouble, and has contributed to the current mess that the mortgage industry finds itself in.
"We'd financed our home with an adjustable rate mortgage and were scared to death of the upcoming payments," says Brown. "We weren't sure if we should sell our home in this down market or if we could reduce our payments and afford to stay by refinancing. We needed help with the decision, not false promises or generic rules of thumb
Homeowners needing expert mortgage/debt consolidation guidance without compromising their privacy or finances are finding it in a new breed of website such as mortgage company LionSaves which offers free, custom mortgage/debt consolidation analysis without requiring any identifying information.
The website, for instance, provides personalized answers with no contact info or e-mail required, using a random log-in ID and encryption to assure privacy. It shows homeowners how much they can save or if they're better off doing nothing. It performs hundreds of calculations to produce accurate results, including a complete analysis of interest rates and closing costs so the homeowner can make an informed decision. If there isn't enough equity to payoff all consumer debt, it prioritizes payoff to maximize monthly savings. The end result gives homeowners answers in seconds that would normally take a loan officer hours to calculate.
When Tim Brown turned to the website for mortgage/debt consolidation guidance he says, "It gave me the data I needed when I needed it. I'm controlling my finances and personal info, not someone else."
LionSaves is a HUD approved lender using FHA, Fannie Mae and 2nd mortgage refinances to consolidate debt. It's designed for employed homeowners with at least average credit and some equity in their home. It currently provides loans in Colorado, Utah, Idaho, Wyoming, New Mexico, North Dakota, and South Dakota, and will soon do so nationwide.
For more info, visit http://www.lionsaves.com/ on the Internet; call 800-828-0899; write: 6901 S. Yosemite St. #108, Centennial, CO 80112; or email Info@lionsaves.com
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Del Williams is a technical writer based in Torrance, California.
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