Mortgage

Breaking Down The Mortgage Bailout

2008-09-25T23:04:46Z

Understanding the mortgage bailout runs a lot deeper than the government simply buying bad mortgages from lenders and putting the on the tax payers shoulders. In fact, the government may even be able line its pockets with trillions of dollars that would once again show the resiliency of the American economy.

The issue that currently faces banks and mortgage lenders is that they have assets on their books that have become illiquid because they are continually falling in price. Even if borrowers are current on their home loans, by regulation the lender would have to take a loss on the loan reducing its capital.

The two options for banks are either to hold on to the performing loan through maturity to recover its capital or take a big loss by selling the loan to investors for pennies on the dollar. No matter how you cut it the banks still is not recovering any capital in the short term in order to make new loans. As banks are unable to raise capital the economy starts to grind to a halt.

The governments proposed $700 billion bailout would put the government into the mortgage business as it would purchase these assets for cash and receive mortgage payments from homeowners.

The process begins with banks and mortgage lenders deciding which loans they would like to sell to the government. From there the Treasury decides on which loans to purchase and for what price, which is where the dilemma comes in.

As a taxpayer, you would want the government to purchase these loans at the lowest possible price. However, that hurts banks with more write downs and less capital which is the situation they are currently in. On the other hand, if the government purchases the loan for 100 percent of the value it was lent at, then taxpayers are paying the difference between the homes purchase price and its current depreciated value.

In order to make this transaction beneficial to both the banks and taxpayers, the government would value the mortgage at the borrower's capabilities of paying back the loan over the life. This doesn't necessarily mean the government will hold onto the loan until maturity but rather sell the loan to investors once the market has recovered.

No one believes that the taxpayer will be on the hook for the entire $700 billion bailout the government is proposing. In fact, some economists say that if the cards fall right this $700 billion investment could turn into a $2 plus trillion dollar asset.

Learn more about the mortgage bailout by visiting Future Planning Financial.

Fannie Mae and Freddie Mac Placed Into Conservatorship

2008-09-07T17:36:48Z

Treasury Secretary Henry Paulson and FHFA Director James Lockhart made the official announcement today that the government will be taking over the two mortgage giants Fannie Mae and Freddie Mac.

The takeover includes an unlimited supply of money that is designed to help Fannie and Freddie increase liquiditability and help strengthen the residential housing market. It also allows the Treasury to purchase mortgage backed securities that are originated by the two mortgage giants.

Paulson stated "If the Treasury can hold the securities to maturity, taxpayer losses shall not occur, in fact the program could produce gains." My guess is that the Treasury will not be able to hold onto a good percentage of the securites as they plan to and this could cost taxpayers hundreds of thousands if not millions of dollars.

Also, James Lockhart has already replaced CEOs at the mortgage giants. Herb Allison will be taking over Fannie Mae and David Moffett will be taking over Freddie Mac. Other high ranking management positions at the two companies are not currently in jeopardy.

I believe that putting these two mortgage giants in conservatroship is just another move that prolongs the inevitable failure of Fannie and Freddie. The more involved the government becomes in the private sector of the mortgage and housing markets the longer it will take for the market to correct itself naturally.

Here is more information about the at take over of Fannie Mae and Freddie Mac and a video from MSNBC explaining the impact on the housing market.

Fannie Mae, Freddie Mac: Where Do They Stand

2008-07-20T12:51:50Z

It is no doubt that Fannie Mae and Freddie Mac are the backbone to the success of the US mortgage industry. So how is it that these two mortgage giants came to a position where the government is stepping in to make certain that they do not fail?

Fannie Mae, created in 1938, and Freddie Mac, founded in 1970, buy mortgages from lenders and package them into securities that are sold to investors. This frees lenders to provide new mortgages, making it easier for more Americans to buy homes. The entities hold or guarantee $5.3 trillion in mortgages, about half the country's total, and guarantee principal and interest on the mortgage-backed securities.

Problems with Fannie and Freddie really began to surface when they posted their earnings for 2007 when both mortgage giants lost billions of dollars, proving that the mortgage crisis was poised to impact all types of mortgage lenders.

Even after the loss of billions of dollars, restrictions limiting the number of loans that Fannie and Freddie could purchase were lifted. Restrictions were imposed on the two mortgage giants for accounting scandals that happened within the two companies during the height of the mortgage boom.

Within two weeks of Fannie and Freddie having the capabilities to purchase more mortgage loans, the government made $200 billion available to the two companies to increase their purchasing power.

The latest actions by the government include making money available to Fannie and Freddie from the Federal Reserve Bank of New York should it become necessary.

However, Richard F. Syron, Chairman and CEO of Freddie Mac claims that Freddie is financially stable, stating "We are in the process of finalizing our June 30, 2008 results and we estimate that they will show we have a substantial capital cushion above the 20% mandatory target surplus established by our regulator. We expect the results will also show that we have a much greater surplus above the statutory minimum capital requirement. The company's capital and liquidity resources will enable it to continue to serve its public mission as it has always done."

Fannie Mae also claims to be a strong financial position. " We continue to hold more than adequate capital reserves and maintain access to liquidity from the capital markets. Given the market turmoil, having options to access provisional sources of liquidity if needed will help to strengthen overall confidence in the market. We will continue to do our part to provide liquidity, stability and affordability to the housing market now and in the future," states Daniel H. Mudd, President and CEO of Fannie Mae.

Fannie and Freddie may have adequate reserves to weather the storm for the time being. There is speculation however that this mortgage crisis will last beyond 2010 which could make it difficult for the two mortgage giants to continue to take losses without the government stepping in to help replenish Fannie and Freddie's reserves.

Keep updated with the latest mortgage headlines by visiting Future Planning Financial.

Mortgage Rates Continue Their Climb

2008-06-11T12:37:35Z

Mortgage rates on fixed and adjustable mortgages increased throughout the week according to the Mortgage Bankers Associations weekly survey released June 11^th. Mortgage applications, on the other hand, increased 10.9 percent throughout the week on a seasonally adjusted basis.

The number of homeowners who filled out an application to refinance their homes rose by 8.4 percent through week's end, while applications for conventional home purchase loans rose 11 percent and government purchase applications rose 17 percent.

30 year fixed mortgage rates increased sharply for the second week in a row, this weeks survey shows the 30 year rate at 6.24 percent. That is an increase of 0.07 percent this week following an increase last week of 0.21 percent.

15 year fixed mortgage rates also increased for a second week in a row. Last week the 15 year mortgage rate increased by 0.21 percent, this week the 15 year rate increased .08 percent and currently sits at 5.78 percent.

After a small decline on the 1 year adjustable mortgage rate last week, the 1 year rate increased slightly by 0.03 percent to 6.8 percent this week.

The survey by the Mortgage Bankers Association covers approximately 50 percent of all US retail residential mortgage applications. All mortgage rates are based off of 80 percent loan to value and include the origination fees.

Get the Mortgage Rate Forecast For June 2008 by visiting Future Planning Financial at www.fpf-direct.com.

Home Ownership Just Became More Affordable

2008-05-18T22:16:36Z

Coming into the month of May the biggest concern for the US economy was the grim outlook many economist had on inflation. Inflation was expected to push mortgage rates higher and slow an already slow US housing market.

However, economic reports have been coming in better than expected week after week. This has helped to push mortgage rates on a downward trend for a majority of the month. According to Freddie Mac's Primary Mortgage Market Survey the 30 year fixed mortgage rate is at it's lowest point since the survey on April 17th 2008.The 30 year fixed rate mortgage is the most common mortgage that first time homebuyer's use when financing a home.

Fannie Mae also came out with some great news, stating that they would lower down payment requirements on a national level. In December of 2007 Fannie Mae imposed down payment restrictions in declining markets which made it very difficult for first time homebuyers the ability to afford a new home. The new requirements go into effect on June 1st 2008 and require a 3 percent down payment for homebuyers approved through Fannie Maes Desktop Underwriter and 5 percent down for homebuyers approved on other underwriting systems.

If economic reports continue to come in better than expected you may see mortgage rates drop by up to an eigth of a point or more before the end of the month. Home values throughout much of the country have already began to see prices level off or even begin to rise in value, which could get many homebuyers off the fence and into their new home.

The U.S. House of Representatives Passes American Housing Rescue and Foreclosure Prevention Act

2008-05-12T15:26:29Z

The new act which was passed on May 8^th, 2008 will help those facing foreclosure to refinance into an affordable FHA mortgage and help make homeownership more affordable for first time homebuyers.

The first amendment to the new act includes an amendment to the FHA Housing Stabilization and Homeownership Retention Act which expands FHA programs so many borrowers in danger of losing their homes can refinance into a lower cost government insured mortgage they can afford. The expansion is limited to owner occupied primary residences only and would also provide up to $230 million for financial counseling to help families stay in their homes.

The amendment also strengthens regulations on Fannie Mae, Freddie Mac and the Federal Home Loan Bank system and includes an increase jumbo mortgage loan limits in high cost areas, making home ownership more affordable for homebuyers in these areas.

The second amendment would provide $11 billion in tax benefits to help spur home sales and stabilize the U.S. housing market. First time homebuyers could receive up to $7,500 in a refundable tax credit that works like an interest free loan that is to be paid back over 15 years. There would also be a temporary increase of $10 billion in a tax exempt mortgage revenue bond to refinance subprime loans and to provide loans to first time homebuyers.

NAR President Dick Gaylord said, "This is meaningful legislation that can have a major impact. Our Realtor® members appreciate the House's hard work and bipartisan effort in bringing forth legislation that will go a long way toward helping people become and remain homeowners"

Will The Housing Market Correct Itself In 2008

2008-05-08T23:05:40Z

Today NAR posted its Pending Home Sales Index report for March 2008, showing a 1 percent decline from a month ago. As the report goes on, the problem in the housing market lies under the credit crunch that is limiting homebuyers the capability to qualify for a mortgage.

On a national level, NAR goes on to project a rise in existing home sales before the year is over. The Northeast region was the only region in March that actually showed a gain on the index from last month. In an unpublished snapshot data report, sales in Bakersfield, CA, and Jackson, MS, were higher than a year ago.

In order for the housing market to correct itself before the end of the year, changes need to be made on credit standards for homebuyers. This will need to start with reforming the FHA, who is responsible for helping low to moderate income households qualify for a new home loan. Incentives such as tax breaks for first time homebuyers who purchase foreclosed and distressed properties could make 2008 the year the market corrects itself.

NAR Applauds Fannie Mae's Latest Initiative

2008-05-06T18:58:33Z

Today Fannie Mae posted a $2.2 billion dollar loss, but underneath their announcement Fannie Mae showed initiative with a new mortgage aid program which could put $10 billion in financing to play for qualified first time homebuyers.

"Keys To Recovery" is the new multi-purpose aid program that has a series of "keys" to help not only first time homebuyers but those who are in fear of losing their homes. Additionally the program includes a rent-to-own option for those who have been hit the hardest.

NAR President Richard F. Gaylord stated, "We appreciate these new initiatives, which demonstrate Fannie Mae's commitment to sustainable homeownership."

Steps The MBA Believes Will Help Stabilize Housing Market

2008-05-04T23:54:27Z

Step 1: Modernize FHA

The FHA plays a vital role in helping low to moderate income famalies achieve homeownership.

Step 2: Tax Incentives

Offer a tax incentive for 1st time homebuyers to purchase foreclosed and abandoned properties. The MBA believes this will spur the demand for housing and slow or even stop national home values from declining.

Step 3: Licensing Of Loan Originators

Individual loan originators should all be licensed and registered in a national database. The instills consumer confidence in the professional handling all the paper work.

Step 4: "Rescue Plans"

A number of "rescue plans" have been proposed to Congress, the MBA ask for quick consideration of these plans so the benefits can begin to impact the current meltdown.

Step 5: Fighting Fraud

The MBA seeks $6.25 million of dedicated funding to fight mortgage fraud. This involves creating task forces to monitor the top 15 areas that have seen high levels of mortgage fraud.

The MBA has more steps on their agenda to help stabilize the housing market, but the steps I highlighted above will have the most impact.

What will mortgage rates do in May?

2008-05-04T01:01:50Z

According to Freddie Macs Primary Mortgage Market survey, mortgage rates for the 30 year fixed rate mortgage will start May off at a higher interest rate than at the end of April. The average 30 year fixed mortgage rate stands at 6.06 percent, up from 6.03 percent a week ago.

The 30 year fixed rate mortgage is a popular mortgage for first time homebuyers, as this mortgage loan generally offers these mortgage consumers a comfortable mortgage payment without the fears of a rate adjustment.

However, many first time homebuyers took out riskier mortgages during the recent boom and many are facing a finacial crisis when their mortgage rate adjust. This has investors tightening credit standards and requiring down payments to ease the pain in this particular niche of the market.

With a weakening national housing market and news of higher inflation throughout the month of May, the 30 year fixed rate mortgage stands a good chance of increasing through out the month of May. By raising mortgage rates and tightening credit standards lenders are looking to minimize the risk of homebuyers through out the 2008 homebuying season.

To some this may be bad news, but for lenders, realtors and consumers this is the track to restabalize the national housing market. In some areas the corrections that are needed will take place will not take place for months or years to be effective, while in other parts of the nation the corrections have already started to take place.

Mortgage Rates Rising While Home Values Begin To Level Off

2008-04-24T10:52:31Z

Mortgage rates have held steady for the past couple of weeks but it look as if they are on the rise once again. This may be a bad time for an increase in mortgage rates as signs show that home values, in some markets, have begun to appreciate.

Mortgage rate averages for both the 30 year and 15 year fixed mortgages rose more than 0.25 percent from last week. The average for the 30 year fixed rate mortgage now sits at 6.04 percent which is up an astonishing 0.30 percent. The average for the 15 year fixed rate mortgage rose a whopping 0.33 percent during the week and now stands at 5.6 percent.

Mortgage applications are down an overall of 14.2 percent with refinance applications falling 20.2 percent and purchase applications falling just 6.4 percent. FHA mortgage applications also fell this week by 2.7 percent. However, FHA applications have risen 148 percent since last year. More and more lenders are turning to FHA mortgage programs from the government as banks are reluctant to lend money.

The National Association of Realtors (NAR) reported that home sales continue to decline but the median home value actually rose last month. Home sales are down 19.3 percent from the 6.11-million-unit pace recorded in March 2007. The average US home price, for the first time in about a year, rose to $200,700 in March from $195,600 in February.

If home values truly begin to stabilize, this spring may be the season that many home buyers have been waiting for… rock bottom prices.

Minneapolis Advantage Loan Program

2008-04-19T13:54:23Z

If you are looking to purchase a home in the Twin Cities area, you may want to look in Minneapolis where the Advantage Loan Program can assist you with up to $10,000 on the purchase of a new home.

The terms of the loan include a zero percent interest rate, no monthly mortgage payment and the mortgage loan is forgivable after 5 years. The forgiveness rate is 20 percent per year, which equates to $2,000 a year. If you sale the property or pay off your current mortgage within 5 years, the remaining balance that has not been forgiven will need to paid off.

However, if you refinance within 5 years the loan can be subordinated only after the homeowners receives counseling.

A lot of neighborhoods within Minneapolis are also contributing up to an additional $4,000 to homebuyers who purchase a home within the neighborhood. These neighborhoods include The McKinley, Webber-Camden and Folwell. The city of Minneapolis is also looking for more partnerships from other neighborhoods in the city.

The loan funds can be used as a down payment towards the closing cost associated with buying a new, principle reduction, and towards repairs on the property.

To be eligible for the Advantage Loan Program includes purchasing a home in a neighborhood that has been approved by the city. The homebuyer must qualify for and receive a traditional fixed rate mortgage loan that is considered an “A” or “prime mortgage loan. The homebuyer will also need to complete homeownership counseling course through the Homestretch counseling program.

Opportunity For Homebuyers?

2008-04-17T21:10:15Z

A video clip from clip syndicate about home values in West Escondido, CA caught my attention and brings forth an important question. How can purchasing a home now be more beneficial than waiting for home values to decrease?

In the news video it stats that home values have decreased by more then 42 percent in West Escondido. I would consider an area like West Escondido to be a very risky investment until home values stop decreasing into the single digit numbers. I could be wrong though, home values may increase next year but the odds to that happening are slim to none.

Another news video at clip syndicate also talk about Houston, TX being a good market to buy in as the housing slump did not hit that market as bad as the rest of the country. Purchasing a home in a market like that sounds like a better investment than West Escondido.

Taking into consideration that the housing market is working to correct itself, what should consumers keep an eye out for? Where do you draw the line between good investment and bad investment?

Fannie Mae Releases Warning To Those Facing Foreclosure

2008-04-13T03:07:37Z

If you are facing foreclosure or planning to walk away from your mortgage obligations, Fannie Mae has a strict warning for you.

Borrowers facing foreclosure will be unable to obtain a loan for up to five years through the mortgage giant, unless there is "documented extenuating circumstances” in which those borrowers would have to wait up to 3 years for a new mortgage, according to a release by Fannie Mae.

If your home does end up in foreclosure, in order to get a new mortgage loan you will need to come up with a 10 percent down payment and your FICO score must be 680 or higher after waiting 3 to 5 years.

With home values decreasing dramatically in certain markets around the country, many homeowners owe more than what their property is worth. This has led to a number of websites claiming that for a small fee they will show you how to stay in your home for 8 months or more without making any mortgage payment.

If you are facing foreclosure there are programs out there such as Project Lifeline, Home Now and FHASecure that the US government has set in place. These programs have helped hundreds of thousands of homeowners save their home from foreclosure.

Fannie Mae wants it to be known that foreclosure should be your last option after you have exhausted all other possibilities.

A Week Of Dismal Reports

2008-04-10T22:48:57Z

Mortgage rates were just about the only report this week that were not disappointing to the US economy.

According to Freddie Mac's Primary Mortgage Market Survey, rates for the 30 year fixed mortgage remained unchanged throughout the week at an average of 5.88 percent while the 15 year fixed rate mortgage actually rose from 5.34 percent to 5.42 percent. On the other hand short term mortgage rates such as the 5 year arm and the 1 year arm fell during the week.

The much anticipated pending home sales for the month of February fell short of what analyst predicted, coming in at a seasonally adjusted index of 84.6, down 21 percent from last year.

To top of this week of dismal reports, Henry Paulson added that the US economy is facing a sharp downturn with housing being the biggest risk. The International Monetary Fund added that the US economy is "definantly" in a recession.

Washington Mutual Dropping Wholesale Mortgage Lending

2008-04-10T18:42:43Z

Washington Mutual, once the second largest residential mortgage lender in the US will stop originating mortgage loans through independent mortgage brokers. However, WAMU will still originate mortgage loans through its 2,200 retail bank branches located throughout the country.

Washington Mutual was an early leader to offer subprime adjustable rate mortgages to the general public and by the end of last year the losses started to mount. In the fourth quarter of 2007 WAMU posted a loss of $1.87 billion wiping out all earnings for the 2007 year. The beginning of 2008 is not looking good for WAMU’s mortgage lending business with an estimated $1.1 billion loss in the first quarter alone.

On April 8th WAMU announced that it would receive a cash infusion of $7 billion from Texas Pacific Group, a principal investment firm specializing in buyouts and investments in distressed companies. TPG was founded in 1992 by Mr. David Bonderman, Mr. Jim Coulter, and Mr. William Price and is based in Fort Worth, Texas. The firm has additional offices in the U.S., U.K., Hong Kong, Luxembourg, Australia, Russia, India, China, Singapore, and Japan.

Washington Mutual said that it will sell 176 million shares of its stock at $8.75 dollars per share and other special shares to help raise much needed capital. To further boost capital WAMU said that it would cut its quarterly dividend to 1 cent per share compared to prior dividends of 15 cents per share.

"This substantial new capital, along with the other steps we are announcing today will position us for a return to profitability as these elevated credit costs subside," said WaMu's chairman and chief executive Kerry Killinger.

AR Blogger Making The News

2008-03-27T16:37:03Z

Today I was looking for new videos to upload onto my website and I came accros an interesting title: "Real Estate Agent Blogs For Business." The first thing that came to mind is if AR plays any role at in this success. Sure enough as she says she is knew to blogging but she hit the right tone with local press.

The Video From clipsyndicate.com
Real Estate Agent Blogs For Business

Congratulations Dru Bloomfield, Scottsdale, Arizona Real Estate Agent!!!

Refinancing Boom Amid Falling Mortgage Rates

2008-03-26T12:37:00Z

Refinancing Boom Amid Falling Mortgage Rates
Mortgage applications nearly doubled last week after the Federal Reserve slashed interest rates by 0.75 percent last week.

Refinance mortgage applications increased by 82 percent last week as mortgage rates begun to decline for the first time since February 2008. Home purchase applications also increased last week by 10.6 percent which helped bring the overall mortgage application increase to 48.1 percent.

Over the past two weeks the fixed cost of borrowing dropped 0.63 percentage points, which is the largest drop in over four years. In response homeowners raced to refinance by applying for more mortgages in any one week period since the beginning of 2001.

Mortgage rates have also been declining since the Federal Reserve announced an interest rate cut on March 18. The 30 year fixed rate mortgage is ranging anywhere from 5.75 percent to 5.875 percent, which is also the lowest the 30 year fixed rate mortgage has been since February 2008.

According to the National Association of Realtors existing home sales for the month of February increased for the first time since July of 2007. This could be a sign that the housing industry is beginning to stabilize and home values have hit rock bottom.

Have Home Prices Hit Bottom?

2008-03-24T12:48:38Z

The data for February existing home sales are in, and the numbers came in stronger then expected. Could this be the first signal to the US housing market recovering?

Today's Economic Data:
February Existing Home Sales

Some Mortgage Companies Blackball Arizona

At this point it is really hard to say as many lenders have begun to make home financing for A+ clients nearly impossible. Some lenders have even gone as far as to blackball some states in which they lend in.

Mortgage lenders are still losing money in their mortgage investments which will likely continue to push mortgage rates higher and keep pressure on home sales.

Mortgage Rates Fall During Week

2008-03-20T15:35:27Z

This week there has been a number of huge factors contributing to the recent decline in mortgage rates. The Fed has lowered interest rates by 0.75 percent, JP Mortgage purchase Bear Sterns and Fannie Mae and Freddie Mac are pumping $200 billion into the housing industry.

The 30 year fixed rate mortgage average fell from 6.13 percent to 5.87 percent from a week earlier, while the 15 year fixed rate mortgage average fell from 5.60 percent to 5.27 percent during the same week according to Freddie Mac. This is the first time that mortgage rates have fallen since February of this year.

Headlines of the week which contributed to declining mortgage rates include the Federal Reserve slashing the Federal Fund interest rate by 0.75 percent. When the Feds slash interest rates it allows bank to borrow money from one another at a cheaper interest rate and also allows for banks and lenders to lend to consumers at a cheaper interest rate.

Also this week, JP Morgan Chase purchased Bear Sterns, the fifth largest investment bank, for $236.2 million which equates to just $2 a share. The purchase was approved on Sunday before the markets opened.

On Wednesday, mortgage giants Fannie Mae and Freddie Mac won government approval to pump $200 billion into the US housing market. The move is designed to free up credit and to allow lenders who sell mortgage loans to the mortgage giants to offer more home loans to American citizens.

This has been a good week for homeowners and homebuyers to take advantage of interest rates. The only question is, how long will it last?

Real Estate Agent Found Dead In Jefferson House

2008-03-20T15:29:22Z

I just found this clip and thought I would share it. It is a grim reminder on how dangerous a career as a Realtor can be. Be safe out there and don't let your gaurd down. My prayers and condolences go out to the family and friends of Ann Nelson.

Fed Rate Cut – Mortgage Rate Affect

2008-03-18T16:49:32Z

The Federal Reserve cut interest rates today, but the rate cut was not as deep as many investors had hoped that it would be.

Rates were cut by 0.75 percent today bringing the Federal Fund rate down to 2.25 percent which is the lowest that it has been since January 2005. The rate cut has helped the US dollar gain some ground against many major curriencies and has led to a mini rebound for the NYSE.

When the Fed cuts interest rates, it is cutting the rate at which banks lend to one another allowing banks to offer lower interest rates to consumers. With the recent turmoil in the US real estate and financial industries, a Fed rate cut does not automatically mean a decrease in mortgage rates.

So what is going to happen with mortgage rates since the Feds just cut rates? It is likely that mortgage rates will see a slight decline as the market has reacted positively to the news. The window for declining mortgage rates will be short lived as the overall economic status looks dismal for the immediate future.

As mortgage lenders and financial institution continue to lose money in the US real estate industry, mortgage rates for the long term will continue to rise. With many adjustable rate mortgage facing an increase throughout 2009 it is unlikely that mortgage rates will see a long term decrease, especailly with home values in the US depreciating.

As with every Fed rate cut, there is a window of opportunity for homeowners and homebuyers to take advantage of mortgage rates before they start to climb again.

Yellowpages.com.... Save Your Money

2008-03-12T18:49:24Z

I am finally out from under my contract that I had with yellowpages.com and I could not be happier. Just over a year ago I was contacted by yellowpages.com, and being new to the "Internet World" I thought that it would be a great idea to have one of the top positions on their website.

While discussing details with the salesman I was under the impression that I would be positioned as the 6th lender on the first page in their directory for mortgage companies in Hennipen Co. Minnesota. I was very excited about the opportunity and couldn't wait for things to get rolling.

After about 3 months of waiting for my simple ad listing to get published I found my listing towards the bottom of the first page for the search results in my area. Needless to say I was not happy and the salesman who sold me the listing was no longer with the company, imagine that. At this point I felt like I was scammed, if I knew that my listing would be at the bottom of the first page there is no way I would have went forward with the deal.

The thing that sparked this blog is that yellowpages.com just gave me a call and really got on my nerves. He acted as if I have no idea what I am doing and that yellowpages.com in the only place in the world that can get you results. I went on to inform him that Google sends me over 200 visitors a day, which got him very curious. He wanted to know some keywords that I rank on the first page for so I told him to Google Minnesota mortgage. Once he saw me positioned on the first page fourth listing down he quickly gave up on trying to sell me an SEO package.

If you do have a yellowpages.com listing out there, just because you signed a 12 month contract does not mean that the contract will end after 12 months. Once the 12 months has expired you need to sign a "zero out contract" with them or they will continue to bill you on the regular monthly basis.

When the gentleman from yellowpages.com asked me for referrals I told him I would write a blog about my experience with his company, so here it is. There are better, easier and cheaper ways to generate leads online without having to shell out hundreds of dollars, AR is one of many examples.

Let The Mortgage Bailout Begin

2008-03-11T23:58:43Z

Just recently the government made $200 billion available to none other than Fannie Mae and Freddit Mac. Well this seems to be a good idea to help revive the US economy and housing market, it very well may also be the first major financial step in a mortgage bailout.

Recently I wrote a post, Fannie & Freddie…. Setting Up The Mortgage “Bailout”, which explains how I believe the government is going to use these two government backed agency that will ultimiately receive the funds to "bailout" mortgage lenders from the current US mortgage crisis.

The first step in this mortgage bailout was to give Fannie and Freddie the ability to purchase more home loans by lifting a restriction that was imposed on them because of mis-management of money.

The second step, which is happening now, is to provide these two agencies with liquidablity so they can actually purchase more home loans. Now the government has basically given these two agencies $200 billion to purchase home loans to sell to investors. Since these mortgages are government backed investors have more faith in these investments.

Now the question is, is $200 billion enough money to make a huge difference in the current mortgage crisis? If this move fails will the government throw more money into these government backed agencies or will they look for other solutions to the problem?

Mortgage Rates Update

2008-03-07T14:39:06Z

The U.S. economy is showing further signs of weakness as mortgage rates take a slight dip throughout the week.

30 year fixed rate mortgages averaged 6.03 percent throughout the week, down from 6.24 percent last week. Last year at this time the average 30 year fixed rate mortgage was at 6.14 percent.

15 year fixed rate mortgages also took a dip this week down to 5.47 percent from 5.72 percent last week. A year ago the 15 year fixed rate mortgage averaged 5.86 percent.

The latest report out on the U.S. economy shows a declining job market, slowing in manufacturing and overall low consumer confidence.

Mortgage delinquencies continue to rise as 6 percent of all mortgages throughout the U.S. are delinquent. The trend shows that the U.S. housing market is far from making a recovery anytime soon.

Mortgage rates are very vulnerable as banks continue to lose money investing in the U.S. housing market. With the Fed expected to lower the rate at which banks borrow from one another later this month it is hard to say whether mortgage rates will follow.