In a rare move, the City of Cleveland filed a lawsuit in Cuyahoga County Common Pleas Court, suing 21 banks over the foreclosure crisis. As some consumer advocates applaud the move, we know that it is too little too late. (more…)
Credit and Debt Blog
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Archive for the ‘Homeownership’ Category
What Does ARM Mean?
Some people will tell you that ARM stands for adjustable rate mortgage. The truth is that it is called an ARM because that is what you will pay, plus a leg, on an adjustable rate mortgage if you keep the loan for more than 2 years. (more…)
ARM Freeze Agreement Does Not Help Everyone
On December 6, President Bush revealed a plan to help some borrowers with ARMs avoid a rate hike for 5 years. The plan is designed to help homeowners build equity and have time to improve their credit so that they can refinance to a mortgage loan with better terms.
The purpose is to prevent a foreclosure fallout that would affect entire neighborhoods and further decimate housing markets in several key cities. They key compromise though is that homeowners must not be delinquent in their payments. (more…)
More Recession News
We anticipate a coming recession in 2008. As such, our counselors are planning for increased requests for assistance from financially distressed consumers.
Leading economists now put the recession risk as high as 50% in 2008. This is more than twice previous estimates. Here is why. (more…)
Slavic Village, 44105
No, Slavic Village, Ohio is not the scene for the next Hollywood teenage drama. Far from it.
Instead, the 44105 zip code has the dubious distinction of leading the nation in foreclosures. It doesn’t end there either. (more…)
House Passes H.R. 3915
On Thursday, the House passed the Mortgage Reform and Predatory Lending Act of 2007. The House voted 291 to 127 to approve legislation that would curb common abusive practices in the subprime mortgage market. These abuses are blamed for massive foreclosures.
The bill still requires Senate approval. Some consumer advocates, including the Center for Responsible Lending, are calling on the Senate to strengthen the bill. (more…)
Does Credit Counseling Affect Credit?
I hear some people say that credit counseling is just like bankruptcy. Others say that you cannot get a loan if you are on a debt management plan. There is so much incorrect information being discussed, and regrettably, it is often by professional mortgage loan officers and bankers.
Let’s bury the hatchet on those old urban legends. Here is the truth, from Fair Isaac Corporation, the Federal Housing Administration (FHA) and the US Department of Housing and Urban Development. (more…)
Foreclosure Can Add Thousands to Your Tax Bill
The IRS views forgiven debt as a form of income. We know that debt settlement can cause your taxes to go up. Did you know that foreclosure works the same way?
That’s right. If your foreclosed property sells for less than the mortgage balance, you have pay taxes on the difference. Some foreclosed properties are selling for tens of thousands of dollars below what is owed, meaning tax bills could reach several thousands of dollars extra. One proposed bill would change that though. (more…)
Washington Mutual in Big Trouble
Washington Mutual was accused of pressuring home appraisers to provide inflated values. Now New York Attorney General Andrew Cuomo is expanding the investigation to include Fannie Mae and Freddie Mac, who purchased or guaranteed many of these loans.
According to Brian Faith of Fannie Mae, “if the examiner determines we own or guarantee mortgages with inflated appraisals, our guide states that the lender must buy back the loans that do not meet our standards and requirements.” This would open Washington Mutual to tremendous liabilities from homeowner defaults. (more…)
NY Attorney General: Subprime Loans Deliberately Inflated
New York Attorney General Andrew Cuomo accused a major real estate appraisal company of colluding with First American and Washington Mutual. The company eAppraiseIT may have been pressured to provide inflated home appraisals, a violation of federal law.
His accusations hint at a more widespread practice that would explain the widespread problems in the subprime mortgage industry. Indeed, it is unlikely that these companies are the only ones responsible for current problems plaguing the industry. (more…)
