Mortgage news

News, trends and analysis of the mortgage and credit market

Saturday, August 23, 2008

Mortgage forbearance vs. forgiveness

August 23 2008
Mortgage rates are skyrocketing. Some homeowners with adjustable rate mortgages who are three months to a year behind on their mortgage have chosen to leave their homes altogether.

But leaving a property to the mortgage-holder or other interested parties carries a serious credit risk and significant legal responsibility. It is a good idea to call the lender even if it’s the person you may least want to talk to. You may also contact either an FHA-sponsored or independent loan counselor to help you negotiate with your lender. Acting this way can help you reach a forbearance agreement with your lender. This agreement reduces or suspends the mortgage payment for a limited time, giving homeowners a temporary reprieve.

Ultimately the mortgage payments have to be reinstated, and anywhere from three to six months of missed payments have to be accounted for. Of course! Because a forbearance is not the same as loan forgiveness. Most lenders offer specialized payment plans in which the borrower agrees to add a portion of the missed payments to the mortgage until the account is current. You could also be eligible for a partial claim, a one-time interest-free loan that will allow you to bring your account current.

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Monday, August 18, 2008

Wachovia reaches settlement about bad securities it sold

August 18 2008
Investors who bought auction rate securities through Wachovia Securities LLC and Wachovia Capital Markets LLC. will return the securities to Wachovia for roughly $9 billion under a preliminary settlement.
Government regulators have been investigating alleged misrepresentations made by Wachovia to thousands of its customers about the liquidity risk associated with auction-rate securities. The settlement will bring real relief to tens of thousands of unsuspecting investors who were not given the forthright information they needed in the process of purchasing auction-rate securities. These investors will now get their money back.
But there speculations that some investors may be left out of auction rate settlement.


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Sunday, August 3, 2008

Citigroup under fraud probe

August 03 2008
New York state Attorney General Friday August 01, 2008 that his office intends to file charges against Citigroup for alleged fraudulent marketing and sale of troubled auction-rate securities to unsuspecting investors.
The nation's largest bank may have repeatedly and persistently committed fraud by material misrepresentations and omissions in the underwriting, distribution and sale of auction rate securities, touting them as safe investments.
The Attorney General also claimed that Citigroup destroyed recordings of telephone conversations related to the marketing and sale of auction-rate securities.
Auction-rate securities are long-term bonds that hospitals, cities and corporations sell at weekly or monthly auctions, which many investors, until now, had treated like cash investments. The market for these investments is worth about $330 billion.

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