When Government Gives You a Free Subsidized Lunch . . . Take It! “America’s housing system was at the centre of the last crisis. It has still not been properly reformed.” —The Economist, “Nightmare on Main Street: the Horror Underlying America’s Housing Market“; August 20th -26th 2016. If you don’t want something (else) keeping you...Read More
FHA Rates — and Especially Fees(!) — Soar Higher Prospective borrowers obviously care about the face rate on their mortgage, but what they should really care about is what’s called the “A.P.R.,” or Annual Percentage Rate. It’s the latter number that captures the various fees that the lender is charging, and reflects the true cost...Read More
More Hot Air From the White House Is the White House finally getting serious about helping underwater homeowners refinance their mortgages? Not judging by the bond market. Yesterday, mortgage-backed securities issued by Fannie Mae and Freddie Mac jumped in price. Given how refinancing affects these bonds — borrowers who re-finance pay off their expensive loans, reducing investors’ return —...Read More
Note the (Very) Fine Print One of the sleazier come-on’s I’ve seen the last few years is a very official looking document — complete with a “Case Number” and Department of Housing and Urban Development (“HUD”) seal (right) — that begins like this (all italics theirs): Dear [Home owner]: Your home loan has gone under review for the...Read More
Wouldn’t That Make it an FHA Home?? If Realtors can’t keep it straight, I doubt non-professionals can, either. So, for the record, a “HUD home” is a home that was financed by FHA, defaulted, and is now owned by the Department of Housing and Urban Development (by the time that happens, the lender has long...Read More
I Don’t Think It’s Got Anything to Do With “Learning” What is the most dismaying thing about “Some Bankers Never Learn,” Gretchen Morgenson’s article documenting mortgage bankers’ efforts to sabotage legislation (Dodd-Frank) aimed at cleaning up lending standards? It’s not the bankers disingenuously arguing that tighter standards will unfairly limit home ownership. It’s not the...Read More
