Deep thought for the day
In order to get assistance from just about any program you have to be delinquent. So, if you need mortgage help, you have to be past due. 30, 60, 90 days past due on a mortgage is pretty severe. It will stay on your credit report for at least half a decade. AS far as delinquencies go, there are no things worse on your credit report than a d/q (delinquet) mortgage. A charge off or settled account is pretty severe as well, however a delinquent mortgage impacts your ability to get a mortgage again and the rate you pay. Over time a quarter, half, or full point on a 30 year mortgage could be the difference of tens of thousands or even a hundred thousand plus dollars on your mortgage over time.
It’s a sweet system, and Delaware and North Dakota propogate it.
What’s even better is when you stop to think how much money a bank holding a mortgage makes over the life of the loan (or used too) You’d think that on a $270k mortgage making $200k in interest would be enough….nahhhhh
Thank you Tom Carper and Pete DuPont!
Creditors aren’t as open to negotiation, either, despite claims otherwise. When the prospect of getting $0 is forever, then their tune changes…but only a little.
This is one of the reasons why I thought this prostitute money…I mean TARP should have been done ONLY on the condition of considering consumer debt PAID. You want money going back into consumer activities? That would have done it.
Lots of business use a bullshit risk model to justify higher rates.
Credit, medical insurance, auto insurance… none of their risk models would survive an audit to prove that higher rates are justified at the lower end of risk.
Yet we have the credit bureau Mafia adding more and more people to so-called “sub-prime” status… and the other industries (health, auto, etc) all want to do a credit check before they quote you a price.
I recall reading 110 million Americans now have some kind of negative credit info. It’s all a scam to juice the price we pay for everything.
I know John Kowalko has been working with a constituent that proactively is trying to get ahead of his looming mortgage problem. No one wants to deal unless he is d/q. It is Countrywide, and he is a small businessman (just him in doing his one-man job) and they won’t accept his 1099 as proof of income for a refi. It is crazy.
So he will have to go d/q and get dinged on the credit report before he can save his home.
I would like the TARP money to go to buy down the mortgage rates. Keep those rates lower and the mortgages affordable.
I can’t tell you how whacked the system is. Unfortunately working right in the middle of this cluster F, we see people get loan mod’s that are cutting their rates 3-5%, and the truly blessed get their principal balance reduced.
So while I live in my modest house @ 6%, the turd around the corner that had to have double the house @8% is now behind and reduced to 4%, HURRAY. Maybe all of that lost income will come from Countrywides CEO, or not.
If you are going to live in your house long enough to pay it off then what is the big deal? You aren’t going to be getting a new mortgage anytime soon anyway.
Then again, thinking about it.. if you have one of those crappy subprimes, you want to get that refinanced as fast as possible, and the terms of the subprime lead to delinquency, which raises your rates on a traditional mortgage… that’s kind of a sweet gimmick they have set up there.
Screw up once with one crappy subprime mortgage, and it sets you up for paying out your ass for the rest of your mortgage’s life, never really finding a way to have a home without a note on it.
More sign o’ the times.
While the money that the banks make over the duration of a mortgage is typically a multiple of the annual amount, it has to be considered on an annualized basis.
How much would you make if you bought a $100000 bond paying 7% and held it for 30 years? You would get your principal back and earn $210,000 in interest. Is the bank really earning that money or is some pension fund collecting most of the revenue on a mortgage?
There were a lot of sleazy games being played with the more stupid borrowers. What about people who bought into negative-amortization, variable-rate mortgage loans?
What about the swindler at Countrywide? Any guesses as to his political connections? Who was Barney Frank covering for? Senator Dodd? What elected officials thought that those VIP mortgage rates were available to Joe Sixpack?
I suspect that Obama’s promise of Moon Pie in the Sky may not turn out to be economically nourishing.
Shorter AD: Bah humbug!
yes, because most banks only have one mortgage AD….yes, I pity the banks and the execs making 6 and 7 figure salaries.
greed is good
Sorry, Mr Viti, but my mother started with a mortgage company back in the 1960s, and even then, 30-year mortgages would up paying, in total, about twice as much in interest as in principle; that’s what happens when you stretch things out over thirty years!