Moishe Alexander’s Blog

Posts Tagged ‘United States

Moishe Alexander has found that Federal authorities have accused Wall Street’s premier firm Goldman Sachs of perpetrating major fraud during the mortgage boom which prefaced the recent crash. This would mark a critical moment in the effort to reveal scams in one of the worst financial crisises in decades.

The fraud charges against this industry leader allege that the company broke numerous laws when it sold an intricate housing-related investment that was obvious would fail, costing $1-billion in losses.

The scam charges are the most serious blasting to date of the firm’s behavior in the leading up years to the most recent financial crisis, and since they arrive just as lawmakers are deciding on how to change the way the banking system operates, they could also drastically change the debate now happening in Washington.

News of the lawsuit, filed by the SEC, sent the firm’s shares diving almost 13% and destroyed $12.4-billion of its market value. Other bank’s shares, such as Citi and Bank of America, also paid a price as investors freaked out about the possibility of increased investigations and stronger regulation of the market.
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Before this most recent economic downturn, the mortgage market was an absolute free-for-all. Brokers would look high and low to find anyone whom they might be able to scam away as a good borrower.

These fraudulent brokers would heap excess amounts of money to the loan to cover all household purchases including furniture.

When Barack Obama took office in November 2008 he vowed to fight this scam and fraud head on with strongly regulated borrowing laws. He failed to deliver on these promises and turned out to be a closet Liberal who wants everyone to own a home regardless of whether or not he can afford it.

Back to the drawing board. The following are 5 tips I strongly advise for easy preapproval of a mortgage:

1. Shop Everywhere…and Early On

Speak with various lenders to help decide which package will suit you best, Since no one person will have the best solution for you, make a point of shopping around a lot. Though, you must ensure you begin shopping early, as when you are pressed for time you will end up with terrible advice and will end up with a package you are unhappy with.

2. Prepare your Financial Bio

In order to be preapproved, the lender is going to want to assess your file very well. Have all the information of your past written down and written well. The easier it is for the lender to understand, the higher chance you have of being preapproved nice and early.

Check of the following as you prepare them:

  • W2’s from the past two years
  • The last two months bank statements
  • Proof of income from investments
  • Last 2 years worth of tax returns
  • Recent proof of income

3. No ONE lender can obligate you

4. Watch your Credit Score

The credit score is a crucial part of the lending process and as we explained earlier, this is now becoming something you will not be able to play around with. Bad credit score, no loan.

5. Watch the Expiration Dates

The preapproval letters from various lenders usually tend to have expiration dates usually around 90 days from the date issued. Ensure you have not passed the date, as you risk losing the quoted rate.

Wishing you luck on your mortgage!

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Loan.com wants to make your mortgage refinance process as straightforward as possible for you by arming you with the tools that will help you to make informed choices when looking for a mortgage refinance rate and terms. These tools include:

  1. The Borrower’s Bill of Rights – Our Borrowers Bill of Rights helps you avoid unethical lenders and get the most from ethical lenders.
  2. Truth about Loans – Our in-depth library of helpful articles tells you what to expect at every step of mortgage process.
  3. The Ethical Lender Rate Directory – The Truth about Loans section allows consumers to search for mortgage rates while at the same time flagging those mortgage lenders that abide by the Borrower’s Bill of Rights and are in good standing with the Better Business Bureau.

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Another advantage of home refinancing is that you can shorten the term of your mortgage. Let’s say, for example, that you originally had a 30-year mortgage and have been paying it for eight years. Thanks to mortgage refinancing, you can switch to a shorter term of either 10, 15 or 20 years. This can save you thousands of dollars of interest. Also, if the refinance rate is lower, but you maintain the same monthly payment, you will build up equity in your home more quickly, because more of your payment will be going towards principal.
Exchange an Adjustable Rate for a Fixed Refinance Rate

When interest rates are low, adjustable rate mortgages (ARMs) are the housing market’s darlings. However, as interest rates increase, that adjustable rate may not look as sweet. It’s also possible that you opted for an ARM because your financial future was less secure, or you weren’t sure how long you’d stay in your home. If, however, you’ve become financially stable and know that you’ll be staying in your home for several years, it may be beneficial to swap that . You’ll have more security knowing that your monthly payment will remain steady, regardless of the current market environment.
Access to Extra Cash – Cash-out refinancing

One way to put more money in your pocket is to tap into the equity you’ve built in your home and do a “cash-out” refinancing. In this scenario, you can refinance for an amount higher than your current principal balance and take the extra funds as cash. This can provide money for remodeling your home, paying off high-interest rate bills, or sending your kids to college.

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A mortgage involves the transfer of an interest in land as security for a loan or other obligation. It is the most common method of financing real estate transactions. The mortgagor is the party transferring the interest in land. The mortgagee, usually a financial institution, is the provider of the loan or other interest given in exchange for the security interest. Normally, a mortgage is paid in installments that include both interest and a payment on the principle amount that was borrowed. Failure to make payments results in the foreclosure of the mortgage. Foreclosure allows the mortgagee to declare that the entire mortgage debt is due and must be paid immediately. This is accomplished through an acceleration clause in the mortgage. Failure to pay the mortgage debt once foreclosure of the land occurs leads to seizure of the security interest and it’s sale to pay for any remaining mortgage debt. The foreclosure process depends on state law and the terms of the mortgage. The most common processes are court proceedings (judicial foreclosure) or grants of power to the mortgagee to sell the property (power of sale foreclosure). Many states regulate acceleration clauses and allow late payments to avoid foreclosure.

Three theories exist regarding who has legal title to a mortgaged property. Under the title theory title to the security interest rests with the mortgagee. Most states, however, follow the lien theory under which the legal title remains with the mortgagor unless there is foreclosure. Finally, the intermediate theory applies the lien theory until there is a default on the mortgage whereupon the title theory applies.

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Moishe Alexander from Canadian funding corp watches the Mortgage news. http://www.youtube.com/watch?v=UcjjE43hhR8

posted by Moishe Alexander at Canadian funding corp.

A maze

The mortgage market is a bit of a maze

Mortgages should be straightforward – you borrow money to buy a house and pay interest on the loan.

But after a few enquiries, you soon realise that it’s not so simple after all.

In a hugely competitive market, building societies and banks are continually updating and extending their range of mortgages. The list is already extensive enough to baffle all but the most determined.

The most important points are how you pay back the capital you borrow and how you pay the interest on it.

Paying back the capital

You can either pay a little at a time as you go (repayment mortgage) or pay it all off at the end (Interest only or endowment mortgages).

Repayment mortgages – Each monthly payment pays off a little of the underlying debt, as well as interest on the loan. At the end of the term the mortgage is cleared.

This is widely considered to be the most easy to understand and least risky mortgage type. But remember if you do not keep up with repayments the lender can repossess the property.

Interest only mortgages – With this type of mortgage, you pay-off the interest on the loan but not the capital. At the end of the mortgage term you are expected to repay the capital, how you fund this is your business.

Interest only mortgages have grown in popularity in recent years amongst buy-to-let investors and first-time buyers in particular because, put simply, they are cheaper than a repayment mortgage.

However, some experts are concerned that many people taking out an interest only mortgage are not giving enough thought as to how they will repay the capital.

Endowment Mortgages – You use an endowment policy to provide life insurance and save funds to repay the loan at the end of the term (usually 20-25 years).

If the investment performs badly, you could face a shortfall on your loan at the end of the repayment period. In the 1980s endowments were very popular and heavily marketed by lenders.

However, many people were not told of the investment risk. This was mis-selling and lenders faced huge claims for compensation.

As a result, endowment mortgages have declined sharply in popularity. Relatively few endowments are sold today but there are still millions of policies yet to mature.

Mortgage application forms

Remember to read the small print

Paying the interest

You have to pay interest on any debt, and mortgages are no different. They differ only in the range of options offered.

Variable rates – This means you pay the going rate on your loan. The mortgage rate changes every time interest rates change or, as in most cases, the overall effect of any interest rate changes is calculated once a year and payments are altered accordingly. Whatever kind of mortgage you start with, it is likely to change to variable rates at some point.

Fixed rates – The interest rate is fixed for the period agreed – often two to five years. These are ideal for budgeting or if you think rates might increase. You do not benefit if rates fall, and will face penalties if you try to quit. Read more here