Gov. Arnold Schwarzenegger approved seven new laws that provide a range of consumer protections to home-mortgage holders and may allow some to hold on to their houses.
The governor signed AB 260 by Assemblyman Ted Lieu (D-Torrance). The measure, which takes effect Jan. 1, tightens restrictions on mortgage brokers so they cannot steer borrowers to riskier, higher-interest loans when they qualify for less-expensive ones.
The new law also bans so-called negative-amortization loans, which offer the option of monthly payments so low that the loan amounts can actually grow over time. The law also limits prepayment penalties to no more than 2% of the loan balance and allows state regulators to enforce federal lending laws.
The governor banned similar legislation last year at the urging of some groups in the mortgage and real estate industries. Read more…
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This has been noticed that the mortgage rates fell again in this week. The average ratio on 30-year fixed-rate mortgages found retreating deeper below 5% and several others reaching lows, according to Freddie Mac’s weekly survey.
The 30-year fixed-rate mortgage averaged 4.87% for the week ended Thursday, the lowest since May. It compares with last week’s 4.94% average and 5.94% a year ago.
Watch the video “Fed Boss Sees No Rush to Boost Rates”
Rates on 15-year fixed-rate mortgages were 4.33%, down from 4.36% last week and 5.63% a year earlier. The latest figure is the lowest since Freddie began tracking such loans in 1991.
Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.35%, down from last week’s 4.42% and 5.9% a year earlier. Those loans haven’t had such low average rates in the four years Freddie has kept such data. The average rate on one-year Treasury-indexed ARMs rose to 4.53% from 4.49%. The prior-year average was 5.15%. Read more…
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As we know that U.S is in the Decade’s worst financial and economical crunch and Obama is giving his 100 % to resolve all these issues. Mr. Obama is trying to shape Fed policy. He has already appointed one Fed governor, Daniel Tarullo, and has an opportunity to fill two more vacancies in the months ahead. The reappointment of Ben Bernanke is a very good decision made by the President Obama. Mr. Bernanke’s to-do list is developing rules to close big, failing financial institutions like Bear Stearns Cos. and Lehman Brothers Holdings Inc. outside of bankruptcy court. It has been nearly 18 months since the failure of Bear Stearns, and Congress hasn’t passed legislation giving the Fed and Treasury the authority they are seeking to deal with institutions other than banks that they deem too big to fail. Bernanke is doing a fantastic job so, In the two years since the onset of the global financial crisis, Mr. Bernanke’s Fed has cut short-term interest rates nearly to zero, has initiated a slew of ways to bypass banks to keep credit flowing in the economy, and is on course to purchase up to $1.25 trillion in mortgage-backed securities and $300 billion in long-term U.S. Treasury.
Mr. Geithner gave a proposal to Mr. Bernanke and he has opposed to strip the Fed of its power to oversee consumer-finance protections. Lawmakers, including Senate Banking Chairman Christopher Dodd of Connecticut, are wary of giving the Fed more power to oversee large financial institutions after some big banks, like Citigroup Inc., teetered under its oversight. Earlier this month, Mr. Geithner lashed out at other financial regulators in a private meeting for not taking a unified stance with the Treasury on overhauls. So, Ben Bernanke’s to do list is long where he has to settle down the Mortgage crisis, renomination elation, Wall Street crisis, banking sector collapse and countries other problem and we are hoping that he will be successful in the future!
Obama administration efforts to revive housing include an $8,000 federal tax credit for first-time buyers who complete the transaction before Dec. 1, 2009. The government is now trying the best to regain the economical boost. So, for that the US government is offering lenders some incentives to modify the terms of delinquent mortgages, and the Federal Reserve is buying mortgage-backed securities to help reduce borrowing costs. All these steps are going to stable the US home and mortgage industry according to the national association of home builder’s Wells Fargo index are showing a record home sales in the second quarter of this month which is showing of nearly 72.3 percent of homes sold out. This 72.3 percent of homes sold to the families with the national median income of $64,000 a year.
Homeowners fall behind on their mortgage payments when they lose their jobs, and declining prices mean they can’t sell to pay off loans, the median U.S. home price fell 16 percent in the second quarter from a year earlier, the steepest drop on record, according to the National Association of Realtors. These rapidly change in home’s prices is creating a positive change in the US mortgage. This is a very positive change and this will help the home sale’s go higher and can play a major role of lifting up the US economy and people will be able to purchase their own homes!
Watch the video “California’s median home price down 40%”
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US is facing so many problems now a days and the Government is planning to resolve these issues but still they are unable to resolve so good. One of the most important and most discussed issues was the failure of the housing industry that has affected badly the other mortgage and reverse mortgage industries as well. Freddie and Fannie has played a key role in every financial planning with the US government and now Fed is going again with the President Obama and his administration and attempting another deal of buying mortgage assets from the mortgage giants Freddie and Fennie. So, hope this deal might help them to get rid from the financial crisis and people can live their live peacefully again. The Federal Reserve says it will buy up to $600 billion in mortgage-backed assets which will be another attempt to take out the US form the financial crisis. Fed told that it will purchase up to $100 billion in direct obligation form the giants in the Mortgage industry Freddie Mac and Fannie Mae as well as form the Federal Home Loan Banks. These two giants are the main asset of the US financial market and now a day’s they are very busy with the President Obama to resolve the financial issues. In this deal it will also purchase another $500 billion in mortgage-backed securities, pools of mortgages that are bundled together and sold to investors. This $600 billion attempt will also unveil a new program to help the marketwhich is down now and this attempt if successfully work; will also stable the country financially.
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