Your Questions About Mortgage Rates News

Betty asks…

Opinions: What are the effects of constant exposure to advertisements?

What percentage of the pages in popular magazines are for advertisements? How many TV and radio commercials do we see and hear every day?

And now, consider this. To a greater extent every day, we rely on interactive and multi-media internet tools for our information. Weather, sports, news, and other interesting or necessary information for our daily lives are now accessed through websites, and ever-increasing amounts of bandwidth have allowed for video advertisements to be found nearly everywhere. Load a site? See an advertisement. Find a sports update? Watch a video ad first. Check the weather? See a dancing figure beg you to pay attention to the advertisement of their new super-low rate mortgage offer. I perceive advertisements to be increasingly trespassing onto our every waking moment.

Over a long enough period of time, what do you think this does to us?

admin answers:

Advertisements are quite impeding, aren’t they? In fact, I can’t stand to watch regular TV. My husband and I watch movies and purchase educational documentaries, many from BBC.

Ads are degrading – they are meant to scare you, keep you in fear of what the neighbor has you don’t, keep you feeling ugly, not worthy, always hungry, needing to spend more, etc. And what you end up with are decent folks who are in debt up to their eyelids, who feel terrible about themselves and feel they have every possible disease that pharmaceutical ads are trying push on them. Unable to think, and relate to each other personally, and scared that they will lose everything.

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Susan asks…

Are there any statistics available on who is being foreclosed on and why?

Apparently, this financial mess started with massive foreclosures, and was made exponentially worse by shady trading. But, I haven’t heard anything explaining why people all the sudden are defaulting. At one time, they had enough money to pay their mortgage, why not now? Are most of these people defaulting because they lost their jobs? Are they defaulting because the banks raised their rates?

The only news I’ve heard about this, is a 90yr old woman shot herself when she was being foreclosed on (didn’t say why) and people on FOX talking about how the financial crisis is all the consumer’s fault for lying about their income, which still doesn’t explain how these people were able to make payments before, and not now. And everybody except people on FOX (lol) say it’s because of some kind of shadow, unregulated derivatives market.

Since foreclosures seem to be one of the causes of the financial crisis, you’d think there would be a lot of research going into who and why people are being foreclosed on.

admin answers:

Edward it really is simple, people were given adjustable rate mortgages by lenders, when the lender knew full well that these folks wouldn’t be able to afford the payments once the mortgage started to adjust. Our regulators decided to relax the regulations in lending back in the early 90’s so that more people could buy their own homes. So let’s see, that goes back to the Clinton days. Which he approved and signed into law. So this has been some years in coming.

Now when the credit market began to crash as well, that pulled in a lot more people, because they were losing jobs, or as for me I’m a Realtor, my business dropped off by 98% in less than 2 years. Most companies won’t hire Realtors. Anyway, that has added to the housing crisis.

I’m sure someone out there is keeping track of foreclosures, but when you ask the question as to why each one is happening, that most likely isn’t being asked nor address. I can tell you that no one in our government has asked me why Countrywide is foreclosing on me. We had 3 years of reserve income, that is gone and now we’re living on our retirement savings. So even good people have bad things happen to them.

Joseph asks…

Subprime mortgage “crisis”. Several questions?

I keep hearing on the news where Subprime mortgage borrowers are losing their homes due to the rising interest rates. I have even seen where some of the companies who granted the loans are closing up shop. What happens to the mortgage after the lender folds? Did the companies not see this coming? What will happen to the people who can’t afford the mortgage payments?

admin answers:

There are other companies as well as private investors that will purchase the loans from the sub-prime companies that are going BK or out of business.

Sub-prime mortgages have been around for years and years as well as adjustable rate mortgages (ARMS). The difference in this market is that the properties did not appreciate in value as they had in the past.

Therefore since the properties did not appreciate the borrowers could not refinance even if they had to refinance into another ARM, because the equity was not there.

Had the properties appreciated in value this crisis would not exist. The media would not be writing or talking about it and our stupid senators and congressmen would not be attempting to make laws restricting sub-prime lenders.

There are presently other sub-prime mortgage companies positioning themselves to take the place of the ones that will no longer be around.

Now as far as those homeowners that can not make their monthly mortgage payments they will lose their homes through foreclosure or will have to sell to someone else that can make the mortgage company.

I hope this has been of some use to you, good luck.

“FIGHT ON”

Helen asks…

When did E*Trade stop issuing mortgages?

The rates page is gone from their website. There was nothing about it on the news.

I just heard a rumor this weekend that mortgage rates on conforming loans (<$417K) are going to go up to 7% this week. Mortgage brokers are circulating this.

I wanted to check from a more reliable source, and noticed E*Trade apparently no longer offer mortgages!!

When did they stop it?

admin answers:

I suspect they stopped after their past dues skyrocketed. Seems that would be indication enough that their business model needed more than a tweak.

Also, don’t their high rate offerings on savings products indicate that they are badly in need of liquidity? Seems to be the case to me.

Lizzie asks…

Mortgage Bailout USA, Now how does this work?

2 families miles apart, both have mortgages around $2000 a month.

Family #1 see problems in the future so they save their money, cut expenses and brace themselves for the turmoil of today. They are fortunate enough even though with the drop in employment, they so far have successfully suffered through these tough times Barely making each mortgage payment.

Family #2 on the other hand did not prepare at all. They went about their daily lives and did not change their spending habits. Soon enough they were falling behind on their mortgage payments and other bills. They are now on the foreclosure list waiting anxiously for some government mortgage bailout help.

Who do you feel needs the help?
Family #1 are just getting by with their existing mortgage.
Family #2 have no money and are in foreclosure.

Family #2 gets ALL the help. They get a reduced interest rate on their mortgage and possibly even a reduced amount on the principal amount of the total mortgage.

Family #1 gets NOTHING. They get no reduction in their mortgage interest rate and must continue to pay their full mortgage on a home that has lost almost $100,000.00 in value.

How do you feel about the way the gov’t is handling the mortgage crisis after reading this story that was on the news this morning?
Good Answer Carl Marx, only thing is Family 1 can’t sell because their home is not worth todays values and probably can’t refinance either because they have negative equity.
Dave S, not according to GMA on this morning. Family #1 is going to get no help at all.

admin answers:

Family 2 files for bankruptcy and the judge adjusts their interest rate, off the ARM rate, onto a 30-year fixed (what family 1 responsibly had).

Family 2 then has a BANKRUPTCY on its record and will pay higher for any credit used, and will be pretty much incapable of buying a different house or moving up.

Family 1 will have good credit and be able to refinance or move as they see fit.

……

The alternative:

Family 2 loses the house and gets foreclosed/evicted. The value of family 1’s home drops even more with the vacant homes in the neighbor hood.

The banks take a huge loss on Family 2’s home, and continue their downward spiral.

The economy gets worse, so the value of Family 1’s home NEVER recovers.

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