In prior posts we have discussed some ways the government is providing opportunities to help borrowers who are struggling with their mortgage payment to try and keep their house. We discussed the HAMP program, which is a government loan modification program that helps qualified consumers make adjustments to their mortgage payments in hopes to be able to keep their house. The government recognizes that not all of these people will still be able to keep their house, so they have provided a program to help those that do need to give up their home, to do it with some extra money.
The Home Affordable Foreclosure Alternatives (HAFA) program is a government program that helps borrowers who have tried the HAMP program and have failed to be able to get rid of their house, with the possibility of receiving up to $3000 cash. For borrowers who have qualified for the HAMP program and still fail to make payments, HAFA can help you with a short sale or Died-in-Lieu foreclosure while at the same time sending you off with up to $3000 cash for “moving expenses.” If you have exhausted all possible ways to modify your loan and are still unable to afford your home, this may be a great option for you. Learn more about HAFA here.
As the economy grows weaker, consumer loans are becoming more and more scarce. On Tuesday, Wall Street reported a record setting $21.55 billion in consumer credit loss, which shows that indeed consumers are borrowing less and less. Much of this is due to the extreme tightening in lending from banks. As a result, banks are looking even more at loan modification and loan refinance for opportunities for consumers to finance.
As mortgage interest rates are hovering near record lows, it becomes many people’s consideration to refinance their house, considering the extremely low cost of borrowing that the government has provided. What many are striving to do is to refinance their house at 5% or lower rates, and then find an alternative investing vehicle that can yield much stronger gains to cover the return. If this is successful, in a sense, you have received money for free, and get to put some extra interest in your pocket.
As the economic crisis increases, it is effecting many aspects of a variety of different businesses. One in particular, Insurance Companies, have see some big changes as of late. Many larger insurance companies have had to raise their premiums, due to losses they’ve endured in their investment portfolio. As such, it may be a good time to consider switching insurance companies, as their are many that are still well capitalized.
On Monday, Secretary Geithner unveiled the new toxic debt plan, that could result in over $1 trillion in spending to assist in the acquiring of toxic debt. The plan was announced several weeks ago, but was unveiled in more detail on Monday, causing the stock market to rally 500 points. The plan involves creating a “bad bank” entity, that would work much like the RTC did back in the 90’s. Toxic assets will be transferred to this “bad bank” and then the Government will look to partner with private equity groups in disposing of the assets.
Big news was released earlier this week as once again the government has executed a plan to help reduce mortgage rates as well as people seeking loan modification. On Wednesday, The Fed met for their monthly FOMC meeting to discuss economic conditions and the future of the discount rate. The Fed announced that they will indeed be keeping the current discount rate at a range of 0-.25%, which was expected, but they continued to announce their new plan, which resulted in a huge upswing in trading, especially for banks.
On Wednesday, March 18th, The Federal Reserve will meet for their FOMC meeting to discuss updates with the economy, the discount rate, and other economic variables. It is expected that The Fed will leave the discount rate at its current level, which is a range between 0-.25%. This means that, most likely, interest rates for homes will remain low, especially those that have good credit.
For the first time since December of 2008, the DOW closed up four days consecutively. This rally in the stock market is being led by the financial institutions, as many of them saw their stock go up anywhere from 40-100% in just a week. This recent return of confidence in lending institutions is good news for your mortgage and loan modification. Both Bank of America and Citi Group announced this week that they are well capitalized and are actually yielding profits in the current quarter. Both feel that they will not need further government funding to keep them alive, as both have recieved tens of billions of dollars from the government.
In the past couple of weeks, President Obama and government agencies have been working hard to assist people across the country in working out their mortgage. Considering the current estimate for delinquent houses is roughly 10% and the FDIC is predicting that 1 out of every 3 houses will be delinquent by 2010, this has become a top priority for President Obama.