Mortgage Updates

Never, never have I seen anything like the current market conditions.  Yes, I have lived through 18% interest rates and through the rate spikes of Desert Storm, the World Trade Center bombings and the Twin Tower disaster, but this unreliable market... never.  Investors approving loans one day and not funding on the next.  Every day another national lender closing their doors.  What needs to happen to bring lending back into focus?

The lowering of the Federal Funds rate would certainly be a first step to calming the markets.  This would also bring lower rates to the burdened home owners looking to refinance out of the capital eroding negatively amortizing loans.  If you have one, be sure to watch your balance IF you are only making the minimum payment.

Hell has no furry like a neg am loan that recasts due to reaching the maximum allowable balance.  That limit is 110% - 115% OF THE ORIGIONAL BALANCE OF THE LOAN.  Once you reach the magic number you loan will fully amortize.  This means the payments will increase dramatically.  If you are in that bind now, I suggest you look into refinancing.  The sooner you take this action the sooner you can stop the bleeding.  Your best move would be into an interest only program.  This will keep your payment and your balance even.  Your payment will increase, if you have only been making the minimum payment due on your loan.  If you have been making the interest only payment on your ARM, it is likely that you will be even or even see a bit of debt relief.

Please let me know if you have questions or comments.