All holders of mortgage contracts, regardless of type, have three options: keep their payments current, prepay (usually through refinancing), or default on the loan. The latter two options terminate the loan. The termination rates of subprime mortgages that originated each year from 2001 through 2006 are surprisingly similar: about 20, 50, and 80 percent, respectively, at one, two, and three years after origination. For loans originated when house prices appreciated the most, terminations were dominated by prepayments. For loans originated when the housing market slowed, defaults dominated. The similarity of the loan termination rates for all vintages in the sample suggests that subprime mortgage loans were intended to be "bridge" (i.e., temporary) loans. In addition, between 2001 and 2...
Changes in an adjustable-rate mortgage's (ARM) interest rate result primarily from changes in the index rate on which it is based. Borrowers whose mortgages are based on an interest rate known as Libor might face a higher interest rate than the comparable borrower whose mortgage is tied to the other frequently used index, which is based on US Treasury rates. Using actual data for the six-month Libor and assuming a rate of 3.0% otherwise after July 2008, the authors see that interest rates, on average, stay roughly the same or fall for Libor-based mortgages scheduled to see their first rate reset in the second half of 2008. Interestingly, interest rates for mortgages that were adjusted for the first time before July 2008 are now about a percentage point higher than their initial rates, o...
In this article the authors make two claims. First, they argue that the current subprime mortgage and credit crisis would have been avoided, or at least greatly mitigated, if existing securities laws had been properly applied to subprime mortgage brokers and originators. Second, they argue that under any of what they regard as three reasonable interpretations of the securities laws, many of the problematic mortgage brokers are actually under the SEC's jurisdiction. This tantalizing possibility does not appear to have occurred to anybody in this crisis, at least to this point. Part II of this article describes how the evolution of the mortgage industry has dramatically changed the economic properties of the financial products known as mortgages. They describe the growth of the subprime m...
WASHINGTON, March 25 /PRNewswire-USNewswire/ -- Congressman Chaka Fattah (D-PA), author of major legislation to provide emergency mortgage assistance to unemployed homeowners who face foreclosure, praised steps by major banks in recent days to aid homeowners with "underwater" and distressed mortgages. These new programs announced by Bank of America, Citigroup and others are a breath of fresh air from our major financial institutions," said Fattah, chairman of the Congressional Urban Caucus and a member of the House Appropriations Committee's subcommittee on financial services. "These programs are steps in the right direction. That is a significant and welcome change of direction for finding creative solutions to the mortgage crisis to maintain the American dream of home ownership.
Today's borrowers who use reverse mortgages represent every level of the economic spectrum. Chris Warner, a reverse-mortgage consultant with MetLife Bank in Bethesda, Md., says he has helped homeowners in countless situations, from a couple borrowing against their multimillion-dollar Georgetown home in order to make a substantial donation to a university to an elderly low-income woman who needed money to repair her home and her health after a home invasion. That woman not only was able to fix her home. but also had enough home equity to receive substantial monthly cash payments through a reverse mortgage even after she had paid for repairs. While few traditional-mortgage borrowers give me a hug after the closing, it is very common to have that happen after we close on a reverse mortgag...
ver las páginas en versión mobile | web
ver las páginas en versión mobile | web
© Copyright 2012, vLex. All Rights Reserved.
Contents in vLex United States
Explore vLex
For Professionals
For Partners
Company
Other interesting searches:
Steven Walt | WisdomTools | settlement statement poc | mootsies tootsies | Milano | ordenanzas municipales sevilla | patria potestad concepto | desarme de armas | daniela perugini | Competencias en materia de tráfico
