Homeowners, Mortgage Debt in Negative Equity Q1 2010
See Calculated Risk Post: Negative Equity Breakdown
Source: http://calculatedriskimages.blogspot.com/2010/07/homeowners-mortgage-debt-in-negative.html
July 31, 2010
Economics 31/7/10: Credit flows in Ireland
Central Bank quarterly was published yesterday. Here are some updated charts on credit flows (data through May). The main conclusions are:
Private sector credit continues to contract and is again accelerating in the annual rate of decline (-10.4% yoy in May as compared to -9.3% declines in April and March).
Mortgage credit contractions are steadily declining (-1.8% in May against -1.6% in April & 1.4% in March).
Non-mortgage credit is accelerating in the rate of decline (-12.8% in May compared to -11.4% in April)
Nama – now through 50% of the loans buys – has had no positive impact on credit supply. If anything, as charts for households lending show blow, it is being accompanied by a dramatic increase in the cost of borrowing for ordinary families.
Charts:
Aggregate private sector credit above. Disastrous trends of the last 2 year continue unabated, despite the already noteworthy contraction in the credit supply. This suggests that we are in a continued downward spiral when it comes to affair and household investment (prospect capacity is under continued pressure down and the only thing that provides some positive support to capital side is, most likely, MNCs own inter-company investments). This goes to clarify why one cannot accept earlier DofF projections for 2013-2015 the makings rates of progression. We are in a circumstances very similar to Japan in the mid-1990s, where existent production is being driven at the expense of capital stock.
Mortgages:Clearly, no signs of moderation in the rates of decay anywhere here. But the picture is more sluggish than that for non-mortgages lending:
The reason for the different dynamics is that it is simpler for households to cut back on smaller credit demand than on massive mortgages burden. Hence, non-mortgages lending is a leading indicator for what we can expect to follow in the mortgages markets. Not exactly a bright prospect for the housing markets, then.
Deposits side of our financial system:
Notice that deposits are down, mom, across the board, except for shorter term maturity corporate deposits. But yoy all deposits are down. Combined decline in all deposits in volume since January 2010 is €1,869 mln, or 3.4%. Not a small change. All deposit rates are down year on year – we are being paid less to save, but are charged more to use.
Loans stats next.
Loans for house buys are falling, even as mortgages rates are rocketing. The orange line above shows just what is happening with the cost of financing one’s own home in Ireland, courtesy of our regulators (keen on talking about ‘moral hazard’), all the special ‘Working Groups’ aiming to address the problems in the housing markets, and Nama. Remember – our Government (by now pretty much every minister in the cabinet) had sworn to us that Nama will restore functional banking. May be this is what they had in mind…
Last year I predicted that the game in the mortgages markets will play as follows:
Once Nama starts transfers, incentives for the banks to play a Excellent Fella will diminish – repossessions will wait low, but rates will rise. We now can see this happening around us.
Once Nama completes transfers, banks will go in earnest at rebuilding their margins & capital, meaning – repossessions will accelerate dramatically and rates will rise to the levels where the burden of financing mortgages will become a driver for more repossessions.
3-6 months after the above stage, banks will start hoarding repossessed property on their books. They will be forced to start selling it ca 6-9 months after February 2011 (completion date for Nama buys).
Combined effect of massively more expensive mortgages credit and inflow of repossessed properties into the market will drive prices in housing markets even further down.
So far, we are through the 1st bullet point and getting closer to the second one.
Meanwhile, in the land of small term loans, rates are more steady and credit supply is falling gently.
Now, let me question you this question. What should be the priority here? Making sure people are not being skinned to pay for their homes, or making sure that credit cards rates and car loans are being underpinned by more stable interest rates?
Credit to non-financial corporations is continuing to slide. Year on year, shorter term (working capital) credit is now off a massive 19.3%. Longer term credit is off 2.7% yoy. What does this tell me about the economy?
Capital investment is going nowhere quick, with any rosy figures on volumes we might hear over the coming weeks being most likely driven by the MNCs own in-house investment flows; and
Companies have no capacity to refinance shorter term credit obligations, resulting in a cash flow pressures and lack of operating capital.
Not exactly a success tale for our financial system administrators and regulators, then.
Source: http://trueeconomics.blogspot.com/2010/07/economics-31710-credit-flows-in-ireland.html
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Five Reasons to get a new mortgage …
If you’re on the fence about mortgage refinancing, there are a number of reasons to refinance a mortgage, regardless of what interest rates. With mortgage refinancing you can reduce your monthly payments, interest rate and also reduce cash equity in your home for any reason. Here is a list of five excellent reasons to choose if mortgage refinancing is right for you.
I. mortgage refinancing to reduce monthly mortgage
The most common reason homeowners are refinancing mortgages, their monthly mortgage payments lower. There are several ways to achieve this goal. If you plot to stay in your home for a long, consider taking a point or two to buy mortgage interest rate. If your financial circumstances has improved since you bought your home, you may receive a surpass interest rate with zero points. If you are not entitled to a lower rate, you can still lower your monthly mortgage by extending the term part of your mortgage loan. Mortgages usually for a long period of thirty being to come, but now there’s even forty and fifty being of mortgage to choose.
Second mortgage refinancing your Adjustable Rate Mortgage (ARM Switch)
If your home with an Adjustable Rate Mortgage risk and the risk involved with interest rates rising, refinancing may be a fixed rate loan gives you the financial peace of mind you need. fixed rate loans usually come with higher rates of adjustable rate mortgages, but you can make your payment amount to interest rate again to extend the tenure track below. A smaller payment with a fixed rate mortgage, you pay the mortgage monthly budget plot.
III. to avoid mortgage refinancing Balloon Payments
Balloon mortgages are well loved since they come with very low monthly payments, but when the balloon payment is due before you May possibly Be a financial hardship if you are not obliged to pay. Refinancing to a fixed or wavering rate, with a runway long term may possibly amount to your payment this year.
IV-mortgage refinancing to stop paying Private Mortgage Insurance
many owners who buy their homes with less than 20% below or above to use a certain amount of home equity loans are required to buy Private Mortgage Insurance. Private Mortgage Insurance is expensive, the premiums may be hundreds of dollars to add the monthly payment and nothing else for you. Private mortgage insurance protects the lender against loss if you default on the loan. Although we have not built sufficient equity in the house there are a number of programs refinancing a mortgage will help eliminate this expensive insurance.
V. Equity Mortgage Refinance your home loan
Another vital reason for equity cash-out mortgage refinancing your home. Money can be used for any reason you can pay off credit cards to make do for your home repair costs of college, even when buying a new car or holiday. With the repayment of mortgages, which is quick and simple. Winning is also a tax deduction for interest paid if your loan against home equity.
Read more against the rest of your mortgage refinancing options, also to avoid costly mistakes, register for a free mortgage tutorial.
Source: http://mortgage-kk.blogspot.com/2010/07/mortgage-refinancing-five-reasons-to.html
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Loan Modification Program
A loan modification program and you the home owner.
In these unique times many lenders are taking steps to get out of hot water with their own fiscal backers and help not only keep people in their homes but also keep deeds on the up and up where they may have made loans to individuals that had nearly no way of paying the debt. For all involved this is fantastic news, and if you are in your own pot of hot water that is slowly reaching that rolling boiling point I suggest to you to learn and absorb as much as you can these programs. These programs offered by the underwriters and lenders which own your debt will help you to realize the dream of being up to date on your mortgage without worries about loss of home, health, or employment.
Even as it may have taken an entire industry collapsing the time to know everything possible about loan modification is now, and simply place it is in your most best interest for all things excellent for you the home owner to stop stressing and start living. The best first step on this path is to simply pick up the phone and call your lender right this very instant and see if you can qualify directly from your own lender. Even as their will still be other options should they turn you down, keeping everything under one umbrella will be paramount to your best interest in the long term as the less their is to worry about the surpass your modification complex will be.
All this being said we can not stress calling your lender today to take advantage of deals that really are to excellent to be right, after all if they default your loan without a modification then not only do you lose but they are hit for maintenance and upkeep on the home as well as resell taking a loss by up to 50% in this market. That being said you should be able to easily see where a home loan modification program will being your best interest through and through.
Should for some reason you are denied you ought to check out third party programs that will really buy the toxic asset of a loan and refinance you via a loan modification program. Sometimes this may add being to your loan or interest, but all adversely change you much less than say a default, or bankruptcy.
So delight get on the phone with your lender today and question them how they can help you.
Learn more about a loan modification today! Get help with mortgage loans and much much more….
Source: http://loan-inf.blogspot.com/2010/07/loan-modification-program.html
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Mortgage Interest Rate Trends and Forecasts For 2009
Homeowners are very interested to know where mortgage interest rates will be going. Refinancing or getting a home loan modification when interest rates are their lowest, saves a lot of money from unnecessary interest payments. Here are my home mortgage rate predictions for mortgage rates in 2009:
Right now, mortgage rates are around 5.19% for a 30 year fixed rate home loan. Remember though that only homeowners who have a excellent FICO score, and either 20% equity in their home or 20% cash down can take advantage of the lowest rates. But, homeowners with less than exact credit should still jump at the chance to refinance or modify their home loans. Even though rates are not their lowest, they are still plenty low to save millions of homeowners hundreds of dollars per month. But, if you can wait at all to go through with your refinancing or loan modification, I would, and here is why.
Recently, home interest rates have been increased across the board by about .5%. Even as this is not a extreme change, it did allow the mortgage lenders and banks a chance to catch up on their paperwork from homeowner applications which have been flooding in since Obamas “Making Home Affordable Plot” announcement. Now, with the increased rate, the lenders have pretty much stopped the applications from homeowners who just want to save money, and are focusing on homeowners who need to save their home. Once these applications are done, the mortgage lenders and banks will be hungry and ready for a new round of home loan modifications and refinancing. So, when this happens, around mid October I predict, home interest rates will drop by .5% or so to an average of 4.69% for a 30 year fixed rate home loan.
So, basically, a homeowner who is looking for a home loan refinancing or modification should wait, if they can, until October and get what I predict will be the lowest interest rate of the year. But, if you are facing foreclosure, or serious financial hardships, you should take action now and do a upset about it. The circumstances will only get worse, and more costly to get rid of. Do a upset now and ensure your financial prospect.
My Links : remortgage house refinance loans private injury solicitors
Source: http://onlyrefinanceinterest.blogspot.com/2010/07/mortgage-interest-rate-trends-and.html
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July 30, 2010
Move Your Money If Your Bank Hits You …
Image by Toban Black via Flickr
With the Dodds-Frank financial reform bill now law, banks will be looking to grab no matter what fees they can get. This will make up for the small fall from overdraft fees.
I am always looking for fresh dreams and this one has been fermenting for the last four months. And now the time might be right. Go Your Money movement is the resolution.
This started as a conversation amongst a group of friends over dinner at Christmas and it has taken traction and has grabbed the attention of the public. Millions of Americans are moving their money from the huge banks to community banks and credit unions.
Advantages of going small
Putting our money in community banks and credit unions helps build the wealth of our community and revitalize the neighborhood by promoting job progression. Loans are made to the local automobile mechanic, to the butcher and to small independent businesses. We help build a vibrant economy. We know our banker and the staff.
No more huge bonuses to executives
Last year the bailed out banks gave away over $1.6 billion of taxpayer money in bonuses to their top executives.
No more creative investing
The large wall street banks are involved in questionable and risky investments such as, credit default swaps and derivatives trading.
The main threat to the banks profit will come from the unions. The unions represent over 500,000 workers. Many workers have 2 or more bank accounts and many have mortgages. Some workers might even be in need of a loan modification. The Unions are in effect saying to the banks,”modify these loans or we will go our money”. The banks have until September 1, to come up with a specific plot on how to deal with mortgage modifications. Some of the leading locals in the nation are on board. They include local 1199 SEIU, the leading of the union locals in the U.S., DC 37, the leading public employees local in the U.S., and the United Partnership of Teachers, the leading teacher local. They say money talks, well this one is screaming. Pension money is huge and the banks would despise to lose these accounts. And if the pension accounts go, so do all of the individual limb accounts.
Churches, non-profit organizations, foundations and local government agencies can also deal a decisive blow to huge banks.
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Source: http://houserefinancecenter.blogspot.com/2010/07/go-your-money-if-your-bank-hits-you.html
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