US Financial News

More relief is on the way for underwater borrowers, assuming lenders agree to take part in the voluntary program.

On September 7, the FHA will begin offering FHA loans to certain underwater non-FHA borrowers who are current on their existing mortgages via the FHA Short Refinance program, originally unveiled back in March.

In order to take advantage of the FHA’s “short refi,” homeowners must qualify for the new loan under standard FHA underwriting requirements, and have a credit score of 500 or higher.

The property must be the homeowner’s primary residence (1-4 units), and the borrower’s existing first mortgage holder must agree to write off at least 10 percent of their unpaid principal balance, bringing the borrower’s combined loan-to-value ratio (CLTV) to no more than 115 percent.

Additionally, the existing loan must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent.

The Treasury will provide incentives to existing second lien holders who agree to full or partial extinguishment of the liens – though second mortgages can be re-subordinated so long as the CLTV stays below 115 percent.

“We’re throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined,” said FHA Commissioner David H. Stevens, in a state

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| Tags: Program, Program Launch
Posted August 8, 2010 by Admin under Financial Guru

For the first time since February, the average length that the typical jobless worker has been looking for work declined, to 34.2 weeks in July.

The previous month it had hit 35.2 weeks, the highest average duration on record since the government began collecting these data in 1948:

Source: Bureau of Labor Statistics

While the decline in the average duration of unemployment looks like good news on its face, it is hard to discern how much of the drop may be attributed to some of the long-term unemployed merely giving up and dropping out of the labor force. (People who give up on actively looking for work cease to be officially counted as unemployed.)

| Tags: Average Length, Length
Posted August 8, 2010 by Hanna Silver under Financial News

Heading out to do some back-to-school shopping can really be a drain on the pocketbook if it is not done with a strategic plan in place. The retail shops are counting on the young ones to beg and plead with their parents for the newest and greatest school supplies.

There will be a lot of advertising and setups placed in shops, and if you don’t know exactly what you are shopping for, you may be tempted to purchase everything the store says you need.

Back to school with the young ones

Find out what your children really need to go back to school. You can contact the teacher before you head out shopping so that you can get a list of items. You can bring your children with you to go shopping as long as you let them know that you are going to be sticking to the list no matter what.

If you let your children make up the list with you they will be more actively involved in the decision-making and it will be easier once you hit the stores. Don’t forget to check what items you already have at home. Your child will probably want all new items, but you can let them know before you go shopping that you do not intend to purchase anything you already have in stock. Read more…

| Tags: Backtoschool Shopping, Shopping
Posted August 5, 2010 by John Wane under Financial News

A Treasury spokesman today put to rest rumors government mortgage financiers Fannie Mae and Freddie Mac were set to forgive mortgage debt for millions of American homeowners.

There had been speculation the pair would soon offer principal balance reductions to underwater borrowers, those who owe more on their mortgages than the current value of their homes, so they could refinance and take advantage of the record low mortgage rates.

But Treasury spokesman Andrew Williams told Reuters “the administration is not considering a change in policy in this area.”

Before the statement, investors were dumping mortgage bonds in anticipation they would sustain large losses if a refinancing wave were to come – they have since parred losses.

Some political pundits speculated that the White House would give orders to forgive portions of underwater mortgages backed by Fannie and Freddie “to win back the hearts and minds of voters” before a key midterm election.

Obviously, such a massive principal write-down would cost billions, likely paid for taxpayers, making it an unlikely proposal.

It would probably also prop up home prices that are still unsustainable in many parts of the country, even with mortgage rates as low as they are.

There’s still always the option of easing underwriting requirements so more borrowers can refinance, regardless of how high their loan-to-value is, or how insufficient their income is.

Currently, borrowers with mortgages backed by Fannie and Freddie can refinance with negative equity up to 125 percent LTV, which clearly isn’t high enough…

| Tags: Homeowner, No Homeowner
Posted August 5, 2010 by Admin under Financial Guru

Fifty-seven percent of the 500 Pennsylvania homeowners surveyed by the Pennsylvania Association of Realtors said they experienced job loss in the 12 months leading up foreclosure.

Another 47 percent said they had experienced an unexpected medical bill, while 36 percent said they had other unexpected bills.

Nearly half (41 percent) of those surveyed had prime, fixed-rate loans, while just eight percent had subprime, adjustable-rate mortgages.

Additionally, 71 percent said they had lived in their homes for more than five years when the foreclosure process began.

The findings call into the question the assertion that the majority of those in foreclosure were unqualified borrowers in over their heads.

Of course, it’s unclear if the data takes into account those that subsequently refinanced (once, maybe twice) after purchasing their homes.

And more than a quarter of respondents didn’t even know what type of mortgage they had, which could also have been part of the problem.

Interestingly, nearly 60 percent of homeowners surveyed had never heard of the Making Home Affordable program, and only about four percent said it helped them.

Roughly 91 percent of those surveyed said they attempted to contact their mortgage lender about a foreclosure solution, but 48 percent said they were “not at all” willing to work with them.

| Tags: Homeowners, Pennsylvania Homeowners
Posted August 3, 2010 by Admin under Financial Guru

Is it a pause, or are we spluttering?

That is the question facing the United States economy on the eve of the release of the July jobs report Friday morning. No one is expecting a stellar account of hiring, and the headline number will almost certainly be negative because of Census workers leaving their temporary posts.

According to a poll of economists surveyed by Bloomberg, the consensus is for a loss of 65,000 jobs, although that is due largely to what economists estimate was the cessation of about 140,000 federal Census jobs in July.

That leaves the private sector adding about 90,000 jobs, according to the median forecast, above the 83,000 added in June, but well below the 125,000 to 150,000 that economists generally say is necessary simply to accommodate new entrants to the labor market. With about 14 million people out of work and looking for jobs (not to mention millions more who have become so discouraged they aren’t even searching), policy makers want much more vibrant job creation to drive the recovery.

The median forecast for the unemployment rate is 9.6 percent, up from 9.5 percent in June. T

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| Tags: Jobs Report, Report
Posted August 3, 2010 by Hanna Silver under Financial News

Lots of individuals and families have been looking forward to a getaway this summer, but they have been forced to put those plans on hold because they are short on cash. But if they don’t take the opportunity now it may be a whole year or more before they get another chance to have that kind of well-deserved fun and relaxation. To help bridge the gap and come up with the funds to pay for a summer holiday, bad credit loans to now cover Holiday purchases.

Bad credit loans are processed much faster than conventional loans because they do not require as much background documentation and loan scrutiny. These unique loans are designed for people who do not have good credit, so a low credit score or bad credit history is not the kind of obstacle it is when trying to borrow from a mainstream bank. Many people get their loan money within hours or days, not weeks and months, and then they are able to carry on with their summer getaway plans.

Right now the UK is in the middle of a tough recession, and everyone is adversely affected by it. Many economists believe that this time next year things will be much better, and the average consumer will not be so strapped for cash or faced with so many budgetary restraints and financial austerity measures.

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| Tags: Summer, Summer Holiday
Posted July 29, 2010 by Admin under Financial Guru

In its first annual review of the Chinese economy since 2006, the International Monetary Fund has pressed Beijing to bolster consumption and allow its currency to appreciate more rapidly.

In its lengthy report, which was released Thursday, the I.M.F. applauded Beijing’s aggressive and speedy response to the global financial crisis, saying the government’s stimulus plan led to a robust recovery.

But authors of the report urged Beijing to make additional changes that could help rebalance the global economy as well as China’s domestic economy, moving the country away from heavy reliance on exports and investments and toward more private consumption.

Economists have grown increasingly worried in recent years about China’s huge trade and current account surpluses and the equally massive deficits in the United States, saying the imbalances are unsustainable and pose dangers to the global economy.

Now, Beijing and Washington are working together and holding high-level talks to address ways to ease the imbalances.

In its report this week, the I.M.F. said Ch

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| Posted July 29, 2010 by Hanna Silver under Financial News