WASHINGTON — Treasury Secretary Henry Paulson said Wednesday that the turbulence that has hit financial markets will take some time to be resolved, especially in the area of subprime mortgages.
Paulson, speaking to officials of some of the country's biggest financial firms, said the Bush administration was looking for their help in making sure subprime homeowners get assistance in dealing with sharply rising mortgage payments as their initial low adjustable rate mortgages now reset to higher levels.
"We have been experiencing market turbulence and as I have said for awhile, it is going to take some time to work its way out,'' Paulson told the finance officials at a meeting at the Treasury Department. "We are going to work our way through this, in some markets more quickly than others.''
Paulson said that "we are already seeing signs of improvements in a number of markets that have been experiencing stress.''
But he said it was going to "take longer to work through the problems in the subprime market,'' noting that there are a number of loans in this market that are scheduled to reset at sharply higher mortgage payments over the next two years.
Estimates are that 2 million homeowners will be facing steep increases in their mortgage payments over the next two years, putting many of them at risk of losing their homes. The session Wednesday was called as a follow-up to efforts announced by President Bush on Aug. 31 to provide more government help to borrowers struggling to cope with the higher mortgage payments.
Among those attending the meeting with Paulson was Angelo Mozilo, the chairman of mortgage giant Countrywide Financial Corp., which announced last week that it is facing the prospect of having to lay off 20 percent of its work force as it struggles with rising loan defaults.
Other companies represented were Wells Fargo & Co., CitiMortgage Inc. and JP Morgan Chase.
Wall Street has been on a rollercoaster ride over the past several weeks as investors have worried about mounting loan losses that began in the market for subprime loans — mortgages made to people with weak credit histories — but which have now spread to other types of credit.
The financial market turmoil has triggered steep declines in stock prices and prompted the Federal Reserve to signal that it stood ready to cut interest rates if necessary to keep the unfolding credit crunch from the country into a full-blown recession.
The government reported last week that businesses trimmed payrolls by 4,000 workers in August, the first monthly job losses in four years.
Paulson told the executives that in a positive sign, all the market turmoil is occurring against "the backdrop of a strong economy. And unlike the periods of financial turbulence I have witnessed over many years, this turbulence wasn't precipitated by problems in the real economy.''
He said the issue the administration wanted to discuss with the executives was how they could work together to make sure as many homeowners as possible are protected against losing their homes through such efforts as allowing them to refinance adjustable-rate loans into more affordable fixed-rate loans.
Bush, in his August proposal, expanded in some limited cases the eligibility requirements for refinancing loans guaranteed by the Federal Housing Administration under a new program to be called FHA Secure.
Critics, however, said the Bush proposals offered only modest relief that would help perhaps 80,000 current homeowners whose mortgages are resetting.
That would be a small fraction of the 2 million adjustable rate mortgages scheduled to reset by the end of 2008. Those homeowners are facing a payment shock as their loans move from low "teaser'' rates to higher interest rates that in some cases will mean an extra $250 to $300 in higher monthly payments on a typical $1,200 monthly mortgage.
Alphonso Jackson, head of the Department of Housing and Urban Development, told the finance executives that it was important that they work with the government to make sure that American dream of homeownership does not turn into a nightmare.
"Around this table are the people who can make a difference,'' he said.
http://www.startribune.com/535/story/1418009.html
Thursday, September 13, 2007
Refi rescue
And potentially some tax help, too. Here are breaks that borrowers in a pickle may receive in the next few months.
EW YORK (CNNMoney.com) -- Hundreds of thousands of homeowners who may struggle to make mortgage payments are likely to get some relief in coming months, including more options to refinance into lower-cost, fixed-rate loans and tax relief if they do face foreclosure.
About 240,000 borrowers of the estimated 2 million with adjustable-rate loans scheduled to reset in the next year already are eligible to refinance into a loan insured by the Federal Housing Administration (FHA) - roughly 80,000 of them are eligible because of the newly created FHASecure Act, which loosens FHA's criteria for refinancing.
And more changes are likely, with the possibility of helping tens of thousands more.
TalkBack: Is the government taking the right steps to deal with the mortgage crisis?
The FHA program has been geared toward home buyers and homeowners with weak credit. Lenders may be more willing to lend to a buyer with shaky credit when the FHA is insuring the loan.
Borrowers with FHA-insured loans - which they get from private lenders as they would any other mortgage - pay a small premium to the FHA every month. The FHA, in turn, uses those premiums to cover the lender in the event of foreclosure and requires lenders to pursue viable ways to help borrowers avoid foreclosure if they become delinquent.
If you are behind on payments by at least four months but no more than 12, the FHA may even make a one-time interest-free loan to you to make your account current with your lender.
It used to be you couldn't refinance into an FHA loan if you'd been delinquent in your payments for any reason. But with the FHASecure Act, delinquent homeowners qualify for an FHA-insured refi if they have:
* A history of on-time payments for at least six months before their loans reset to higher rates
* Interest rates scheduled to reset between June 2005 and December 2009
* 3 percent equity in their home, or the cash equivalent
* A sustained history of employment
* Sufficient income to make their FHA-insured mortgage payment and all other obligations
The FHA will still insist that lenders verify borrowers' income and ensure that their total debt payments don't exceed 43 percent of their income or that their mortgage payment won't exceed 31 percent of income. If those ratios are exceeded, the lender must explain how the homeowner can compensate for that.
For borrowers who qualify, an FHA refi can save them money. Even with the premiums FHA charges, an FHA-insured loan could save a borrower $100 or more a month for every $100,000 borrowed compared to the payments they'd owe under an adjustable-rate mortgage that readjusts upward by 3 percentage points.
And if the homeowner has an FHA-insured loan for five years and has built up 22 percent equity in the home, the borrower no longer needs to pay the premium.
FHA requirements may get even more liberal
Lawmakers also are considering legislation to modernize FHA guidelines, which could make FHA refis available to another 60,000 troubled mortgage borrowers, and open the door to another 140,000 new home buyers who today wouldn't qualify for an FHA-insured loan, according to FHA estimates.
Jaret Seiberg, a financial services analyst at policy research firm Stanford Group, expects lawmakers will pass the FHA legislation, noting that it has broad support in both parties. "FHA reform is the lowest hanging fruit. It's the easiest thing to do."
That legislation would further liberalize FHA loan requirements. Among its key provisions, it would:
Raise loan limits. Today the FHA won't insure loans above $362,790 for single-family homes, and even less in lower-cost areas. Under the bill before the House, which is expected to vote next week, that ceiling would increase to 100 percent of the conforming loan limit for mortgages backed by Fannie Mae and Freddie Mac, currently $417,000.
But Barney Frank, chairman of the House Financial Services Committee, plans to propose an amendment that would boost that new limit to $500,000, and give the FHA commissioner discretion to raise that limit further during mortgage crises.
Reduce down payment requirements. Homeowners would no longer be required to have 3 percent equity or the cash equivalent. They could get an FHA-insured loan with 0 percent down.
Reduce complexity. Reform also would "clear away a bunch of burdensome rules that make FHA difficult to use," Seiberg said.
Foreclosed borrowers may get tax break
For homeowners whose situations can't be remedied with a refi, they may get tax relief if they end up facing foreclosure.
Currently, if you foreclose on your home and the bank forgives a portion of your mortgage debt which isn't recovered by the sale of your home, that forgiven debt is treated as taxable income to you. President Bush has asked lawmakers to provide a temporary exemption from that rule.
Both Seiberg and Clint Stretch, managing principal of tax policy at Deloitte Tax LLP, think it's likely lawmakers will pass that exemption this fall and make it retroactive so that homeowners who foreclosed in 2007 would be covered.
http://money.cnn.com/2007/09/12/real_estate/refi_rescue_status_check/index.htm?postversion=2007091213
EW YORK (CNNMoney.com) -- Hundreds of thousands of homeowners who may struggle to make mortgage payments are likely to get some relief in coming months, including more options to refinance into lower-cost, fixed-rate loans and tax relief if they do face foreclosure.
About 240,000 borrowers of the estimated 2 million with adjustable-rate loans scheduled to reset in the next year already are eligible to refinance into a loan insured by the Federal Housing Administration (FHA) - roughly 80,000 of them are eligible because of the newly created FHASecure Act, which loosens FHA's criteria for refinancing.
And more changes are likely, with the possibility of helping tens of thousands more.
TalkBack: Is the government taking the right steps to deal with the mortgage crisis?
The FHA program has been geared toward home buyers and homeowners with weak credit. Lenders may be more willing to lend to a buyer with shaky credit when the FHA is insuring the loan.
Borrowers with FHA-insured loans - which they get from private lenders as they would any other mortgage - pay a small premium to the FHA every month. The FHA, in turn, uses those premiums to cover the lender in the event of foreclosure and requires lenders to pursue viable ways to help borrowers avoid foreclosure if they become delinquent.
If you are behind on payments by at least four months but no more than 12, the FHA may even make a one-time interest-free loan to you to make your account current with your lender.
It used to be you couldn't refinance into an FHA loan if you'd been delinquent in your payments for any reason. But with the FHASecure Act, delinquent homeowners qualify for an FHA-insured refi if they have:
* A history of on-time payments for at least six months before their loans reset to higher rates
* Interest rates scheduled to reset between June 2005 and December 2009
* 3 percent equity in their home, or the cash equivalent
* A sustained history of employment
* Sufficient income to make their FHA-insured mortgage payment and all other obligations
The FHA will still insist that lenders verify borrowers' income and ensure that their total debt payments don't exceed 43 percent of their income or that their mortgage payment won't exceed 31 percent of income. If those ratios are exceeded, the lender must explain how the homeowner can compensate for that.
For borrowers who qualify, an FHA refi can save them money. Even with the premiums FHA charges, an FHA-insured loan could save a borrower $100 or more a month for every $100,000 borrowed compared to the payments they'd owe under an adjustable-rate mortgage that readjusts upward by 3 percentage points.
And if the homeowner has an FHA-insured loan for five years and has built up 22 percent equity in the home, the borrower no longer needs to pay the premium.
FHA requirements may get even more liberal
Lawmakers also are considering legislation to modernize FHA guidelines, which could make FHA refis available to another 60,000 troubled mortgage borrowers, and open the door to another 140,000 new home buyers who today wouldn't qualify for an FHA-insured loan, according to FHA estimates.
Jaret Seiberg, a financial services analyst at policy research firm Stanford Group, expects lawmakers will pass the FHA legislation, noting that it has broad support in both parties. "FHA reform is the lowest hanging fruit. It's the easiest thing to do."
That legislation would further liberalize FHA loan requirements. Among its key provisions, it would:
Raise loan limits. Today the FHA won't insure loans above $362,790 for single-family homes, and even less in lower-cost areas. Under the bill before the House, which is expected to vote next week, that ceiling would increase to 100 percent of the conforming loan limit for mortgages backed by Fannie Mae and Freddie Mac, currently $417,000.
But Barney Frank, chairman of the House Financial Services Committee, plans to propose an amendment that would boost that new limit to $500,000, and give the FHA commissioner discretion to raise that limit further during mortgage crises.
Reduce down payment requirements. Homeowners would no longer be required to have 3 percent equity or the cash equivalent. They could get an FHA-insured loan with 0 percent down.
Reduce complexity. Reform also would "clear away a bunch of burdensome rules that make FHA difficult to use," Seiberg said.
Foreclosed borrowers may get tax break
For homeowners whose situations can't be remedied with a refi, they may get tax relief if they end up facing foreclosure.
Currently, if you foreclose on your home and the bank forgives a portion of your mortgage debt which isn't recovered by the sale of your home, that forgiven debt is treated as taxable income to you. President Bush has asked lawmakers to provide a temporary exemption from that rule.
Both Seiberg and Clint Stretch, managing principal of tax policy at Deloitte Tax LLP, think it's likely lawmakers will pass that exemption this fall and make it retroactive so that homeowners who foreclosed in 2007 would be covered.
http://money.cnn.com/2007/09/12/real_estate/refi_rescue_status_check/index.htm?postversion=2007091213
How to handle a likely interest rate cut
If you're banking on an interest rate cut fairly soon -- and you should -- it's time to consider what moves to make with your money.
Do you lock up a CD now? Wait around to refinance? Drag your feet on a car loan?
The Federal Reserve board meets Tuesday, and we'll likely see the first rate cut in four years.
Diane Swonk, chief economist for Mesirow Financial in Chicago, expects the Fed to cut the short-term federal funds rate to 5% from 5.25% next week. The federal funds rate is the rate banks charge each other for overnight loans.
Swonk is also predicting that the Fed would cut rates by a quarter percentage point again at its Oct. 30-31 meetings.
The reasons to make a move: Housing stinks, the U.S. economy is hurting and the jobs picture is getting bleaker.
"There's absolutely no reason in my view why they wouldn't ease at this point," said Mark Zandi, chief economist at Moody's Economy.com.
Zandi is forecasting at least two rate cuts this year, starting next week.
But if the Fed drops rates, consumers would get a break, too. The prime rate -- a rate that influences credit cards, home equity lines of credit and other loans -- would drop to 8% from 8.25% by next week, if the Fed cuts rates by 25 basis points. If we get a second similar cut in October, too, the prime would drop again to 7.75%.
"There is a light at the end of the tunnel -- and it's not a train," Swonk said.
Bad for CDs
A round of rate cuts should make investors and lenders less skittish -- and help the U.S. economy regain its footing.
As the Fed starts cutting rates now, the downside is that savers would make less money on deposits.
"The outlook for the Fed cutting interest rates does not bode well for CD rates in the coming months," said Greg McBride, senior financial analyst for Bankrate.com.
The national average yield for a one-year CD was 3.75% last week compared with 3.78% in January and 3.89% a year ago.
Given that the rates are likely to move lower, McBride advises that savers might want to lock in some higher CD rates for one year or longer.
Some banks, such as LaSalle Bank, have CD specials for less than a year. LaSalle has a seven-month CD that has a yield of 4.65% for a minimum deposit of $2,000. The yield goes up to 5% if the saver has a minimum of $15,000 to put into the CD. It has to be new money to the bank.
A waiting game
As for buying a home? Refinancing? Or borrowing to buy a car?
Playing the rate game could be trickier.
Overall, Zandi notes that consumers would likely get better deals by waiting to borrow money. If you're shopping for a home, Zandi said it could pay to be patient and wait until rates and home prices fall further.
If you've got an adjustable-rate mortgage, it might seem logical to wait to refinance until rates fall a bit more from here.
If you have an ARM that will reset and climb higher in the months ahead, you'd take on more risk by waiting.
Will home prices fall even further in the next few months, making it harder to refinance? Will you be out of a job in six months or so -- again making it far harder to refinance? Will the mortgage reset and then make it harder for you to pay your bills on time? And will your credit score drop?
"It's a gamble, and I'm not sure it's a gamble that's going to pay off," McBride said. "If you start falling behind on the payments, the lenders are going to run the other way."
So talk to the bank as early as possible anyway.
As for car loans?
The auto industry overall would benefit from any kind of rate cut. Lower rates, after all, make it easier for car companies to offer financing deals -- and move product.
In general, though, interest rates on car loans aren't likely to fall much with the first few rate cuts.
On a $25,000 car loan, for example, a quarter-point cut would produce a savings of about $3 a month, McBride said.
Instead of waiting, he said, consumers who want a car soon would be better off shopping for a good rate, a good deal -- and cleaning up the car for a better trade-in price or used car sale.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070913/COL07/709130432
Do you lock up a CD now? Wait around to refinance? Drag your feet on a car loan?
The Federal Reserve board meets Tuesday, and we'll likely see the first rate cut in four years.
Diane Swonk, chief economist for Mesirow Financial in Chicago, expects the Fed to cut the short-term federal funds rate to 5% from 5.25% next week. The federal funds rate is the rate banks charge each other for overnight loans.
Swonk is also predicting that the Fed would cut rates by a quarter percentage point again at its Oct. 30-31 meetings.
The reasons to make a move: Housing stinks, the U.S. economy is hurting and the jobs picture is getting bleaker.
"There's absolutely no reason in my view why they wouldn't ease at this point," said Mark Zandi, chief economist at Moody's Economy.com.
Zandi is forecasting at least two rate cuts this year, starting next week.
But if the Fed drops rates, consumers would get a break, too. The prime rate -- a rate that influences credit cards, home equity lines of credit and other loans -- would drop to 8% from 8.25% by next week, if the Fed cuts rates by 25 basis points. If we get a second similar cut in October, too, the prime would drop again to 7.75%.
"There is a light at the end of the tunnel -- and it's not a train," Swonk said.
Bad for CDs
A round of rate cuts should make investors and lenders less skittish -- and help the U.S. economy regain its footing.
As the Fed starts cutting rates now, the downside is that savers would make less money on deposits.
"The outlook for the Fed cutting interest rates does not bode well for CD rates in the coming months," said Greg McBride, senior financial analyst for Bankrate.com.
The national average yield for a one-year CD was 3.75% last week compared with 3.78% in January and 3.89% a year ago.
Given that the rates are likely to move lower, McBride advises that savers might want to lock in some higher CD rates for one year or longer.
Some banks, such as LaSalle Bank, have CD specials for less than a year. LaSalle has a seven-month CD that has a yield of 4.65% for a minimum deposit of $2,000. The yield goes up to 5% if the saver has a minimum of $15,000 to put into the CD. It has to be new money to the bank.
A waiting game
As for buying a home? Refinancing? Or borrowing to buy a car?
Playing the rate game could be trickier.
Overall, Zandi notes that consumers would likely get better deals by waiting to borrow money. If you're shopping for a home, Zandi said it could pay to be patient and wait until rates and home prices fall further.
If you've got an adjustable-rate mortgage, it might seem logical to wait to refinance until rates fall a bit more from here.
If you have an ARM that will reset and climb higher in the months ahead, you'd take on more risk by waiting.
Will home prices fall even further in the next few months, making it harder to refinance? Will you be out of a job in six months or so -- again making it far harder to refinance? Will the mortgage reset and then make it harder for you to pay your bills on time? And will your credit score drop?
"It's a gamble, and I'm not sure it's a gamble that's going to pay off," McBride said. "If you start falling behind on the payments, the lenders are going to run the other way."
So talk to the bank as early as possible anyway.
As for car loans?
The auto industry overall would benefit from any kind of rate cut. Lower rates, after all, make it easier for car companies to offer financing deals -- and move product.
In general, though, interest rates on car loans aren't likely to fall much with the first few rate cuts.
On a $25,000 car loan, for example, a quarter-point cut would produce a savings of about $3 a month, McBride said.
Instead of waiting, he said, consumers who want a car soon would be better off shopping for a good rate, a good deal -- and cleaning up the car for a better trade-in price or used car sale.
http://www.freep.com/apps/pbcs.dll/article?AID=/20070913/COL07/709130432
A Home Loan Trap
Homeowners whose loan rates are soaring may want to head for the exits. Many of them, though, will find no way out. If they sell their home or refinance, they will face a penalty of thousands of dollars for paying off their loans early.
Timm Larson is in just such a predicament. Two years ago, he refinanced his home outside Minneapolis with a loan at a low interest rate that has since risen sharply. The monthly payment is eating up nearly half of their family income of about $45,000 a year.
Mr. Larson wants to move into a traditional loan, but can’t see how. He would have to pay the lender a $9,000 exit fee.
“We don’t have any money,“ Mr. Larson said in a phone interview from his three-bedroom house in St. Francis, Minn. “We are barely making our house payments.“
According to the Center for Responsible Lending, these exit fees, called prepayment penalties, were added to more than two-thirds of the adjustable-rate loans. Those loans initially carry a very low interest rate, known as a teaser because it is below the market rate and rises sharply over time.
The lenders say the trade-off is the only way to offer low monthly payments initially because otherwise borrowers would flee when rates adjust upward and make the loan a losing deal. The fees usually equal several months’ interest, and they decline over a few years before disappearing altogether.
Homeowners often think they can keep up with their rising payments or that they will simply refinance later. But the penalties can dash that hope, even if market conditions and their personal circumstances allow it.
Now state governments, regulators and members of Congress are considering whether to rein in prepayment penalties, as consumer advocates suggest. “Borrowers should not be penalized for paying off their debt,” said Ellen Harnick, senior policy counsel to the Center for Responsible Lending, a nonprofit group in Durham, N.C.
Senator Christopher J. Dodd, Democrat of Connecticut, said this week that he would introduce legislation to eliminate the penalties and make other changes in home lending practices.
“About 70 percent of subprime loans have costly prepayment penalties that trap borrowers in high-cost mortgages, mortgages that strip wealth rather than build it, and these penalties keep borrowers from shopping for a better deal,” Senator Dodd said in a hearing of the Senate Banking Committee early this year. When interest rates were high in the 1970s, states took steps to protect consumers from onerous prepayment penalties. Such fees generally disappeared from standard loans. In the late 1990s, though, subprime loans to people with weak credit blossomed, and with those loans came a resurgence in prepayment penalties.
A number of states limit the penalties, but only state-regulated banks are generally subject to those restrictions; mortgage companies and national banks are not.
One state, Wisconsin, actually reversed course and allowed prepayment penalties by state-chartered institutions last year, just as the housing bubble was about to burst. Lenders contended that with lower initial payments, many more people would be able to afford homes and it would level the playing field among lenders.
“You want to give pause before banning prepayment penalties,” said Kurt Pfotenhauer, senior vice president for government affairs at the Mortgage Bankers Association. “They save consumers’ money by lowering their interest rates.”
Mr. Larson and his wife would seem to be good candidates now for a traditional loan. They both have steady jobs: he trims trees, she waits tables. Their fateful refinancing was used to pay off $10,000 in credit card debt accumulated when they traveled to Thailand, his wife’s native country, for their wedding.
The $205,000 loan, which the Larsons signed in February 2005, required them to pay only interest at first, or $11,400 a year, with the 5.6 percent rate to reset after two years. Mr. Larson knew there was a prepayment penalty, but thought it expired in two years; it was actually three years. Now the Larsons’ payments have climbed to $19,000 annually, at a new rate of 9.3 percent.
“It was a loan made with no regard for whether it would be affordable when the rate increased,” said Jordon Ash of Acorn Financial Justice Center, an organization in St. Paul that is trying to help the Larsons. The mortgage broker who advised the Larsons could not be found, and phone calls to the company, Ace Mortgage, were not returned.
Mr. Larson worries that his creditworthiness is sinking as the couple struggle to make the monthly payments. By the time the penalty expires, he may not be able to refinance.
“I had good credit,” he said. “Now it is going down because we can’t keep up. I feel like I am drowning.”
Experts say that many borrowers do not really understand the implications of prepayment penalties — if they are aware they have them at all — and fall prey to sophisticated marketing. In a 2002 lawsuit by Acorn on behalf of a group of borrowers against Household Finance, Acorn said that lenders referred to the practice as “closing the back door” by making it too costly for borrowers to get out of loans with rising rates.
The art of finding borrowers was carefully honed, according to the lawsuit. Among the techniques was sending a check and telling recipients they could have access to a small loan by cashing it. Those who did went on a hot list of prospects in a strategy referred to as target practice, according to the suit.
The penalty “is just an added fee that means more money to the lenders,” said Melissa A. Huelsman, a Seattle lawyer who specializes in predatory lending law. “It is one piece of paper that a borrower signs in a stack of 50 papers. For many people, even if they saw the words, they wouldn’t understand them.”
That was the case for Gertrude Robertson, a 91-year-old widow and nurse’s aide living in Seattle who took out an adjustable-rate mortgage of $450,000 in January.
Even at her age, Mrs. Robertson was earning $3,500 a month, largely by caring for another elderly woman. Then the woman died. Mrs. Robertson’s income was reduced to her monthly Social Security payment of $1,500. Meanwhile, her loan ballooned to $475,000. Unable to make the payments, Mrs. Robertson is listing her home for $510,000.
Mrs. Robertson’s mortgage includes a prepayment penalty of $14,400. A sale at her asking price would not only wipe out any equity but require her to write a check for about $8,600 to cover the penalty and other costs.
Mrs. Robertson says her broker did not give her time to study the loan documents. “Some words I don’t understand,” she said. “When I heard the lady I used to work for tell someone that I was the ‘epitome of cleanliness,’ I went home and cried. I thought I was going to be fired.’ I didn’t know what it meant.”
Last week, Ms. Huelsman persuaded a court in California to waive the prepayment penalty for Mrs. Robertson. She is seeking to have other fees thrown out as well. The loan was made by New Century Financial, now in bankruptcy protection.
The loan servicer, HomeEq, prefers to work one-on-one with customers and does not comment on individual cases, a HomeEq spokeswoman said.
A study by the Center for Responsible Lending shows that borrowers in minority neighborhoods received a disproportionate share of loans with prepayment penalties. The Pew Hispanic Center reported in 2002 that African-American families had a median net worth of just under $6,000. Hispanic families had nearly $8,000. For white Americans, the median net worth was $88,651.
Waiting out the expiration of a penalty, especially a short one, does not sound so bad — until home prices turn south.
That is what happened to Dorinda Weisman, a social worker in Elk Grove, Calif. In 2005 she borrowed $353,000 from Pacific American Mortgage to buy a home in Sacramento with a small down payment. The prepayment penalty, of $9,000, expired in just a year.
“One of the things I always wanted was to own a house,” Ms. Weisman said in a telephone interview. “I was a single parent, and my son is a hemophiliac. I had been living in a middle-class African-American neighborhood that went downhill after the drugs came in.”
By the time the penalty expired, her house had declined in value. Refinancing was no longer possible.
Her interest rate had shot up to 9.8 percent from 4.75 percent. She says about 85 percent of what she brings home — her salary is $60,000 as a social service consultant with the state government — now goes to the mortgage.
She is trying to negotiate a new loan with the help of the Neighborhood Assistance Corporation of America, a nonprofit home ownership organization based in Jamaica Plain, Mass.
“Like a lot of people, the adjustable ate up her equity,“ said her mortgage broker, Antonio Cook of Toneco Financial. “She’s got to ride it out and sacrifice. I tell people, ‘I don’t care if you eat bologna sandwiches, just pay your bills on time.’ If she can ride it out, things start coming up good.”
http://www.timesdaily.com/article/20070913/ZNYT01/709130348&cachetime=5
Timm Larson is in just such a predicament. Two years ago, he refinanced his home outside Minneapolis with a loan at a low interest rate that has since risen sharply. The monthly payment is eating up nearly half of their family income of about $45,000 a year.
Mr. Larson wants to move into a traditional loan, but can’t see how. He would have to pay the lender a $9,000 exit fee.
“We don’t have any money,“ Mr. Larson said in a phone interview from his three-bedroom house in St. Francis, Minn. “We are barely making our house payments.“
According to the Center for Responsible Lending, these exit fees, called prepayment penalties, were added to more than two-thirds of the adjustable-rate loans. Those loans initially carry a very low interest rate, known as a teaser because it is below the market rate and rises sharply over time.
The lenders say the trade-off is the only way to offer low monthly payments initially because otherwise borrowers would flee when rates adjust upward and make the loan a losing deal. The fees usually equal several months’ interest, and they decline over a few years before disappearing altogether.
Homeowners often think they can keep up with their rising payments or that they will simply refinance later. But the penalties can dash that hope, even if market conditions and their personal circumstances allow it.
Now state governments, regulators and members of Congress are considering whether to rein in prepayment penalties, as consumer advocates suggest. “Borrowers should not be penalized for paying off their debt,” said Ellen Harnick, senior policy counsel to the Center for Responsible Lending, a nonprofit group in Durham, N.C.
Senator Christopher J. Dodd, Democrat of Connecticut, said this week that he would introduce legislation to eliminate the penalties and make other changes in home lending practices.
“About 70 percent of subprime loans have costly prepayment penalties that trap borrowers in high-cost mortgages, mortgages that strip wealth rather than build it, and these penalties keep borrowers from shopping for a better deal,” Senator Dodd said in a hearing of the Senate Banking Committee early this year. When interest rates were high in the 1970s, states took steps to protect consumers from onerous prepayment penalties. Such fees generally disappeared from standard loans. In the late 1990s, though, subprime loans to people with weak credit blossomed, and with those loans came a resurgence in prepayment penalties.
A number of states limit the penalties, but only state-regulated banks are generally subject to those restrictions; mortgage companies and national banks are not.
One state, Wisconsin, actually reversed course and allowed prepayment penalties by state-chartered institutions last year, just as the housing bubble was about to burst. Lenders contended that with lower initial payments, many more people would be able to afford homes and it would level the playing field among lenders.
“You want to give pause before banning prepayment penalties,” said Kurt Pfotenhauer, senior vice president for government affairs at the Mortgage Bankers Association. “They save consumers’ money by lowering their interest rates.”
Mr. Larson and his wife would seem to be good candidates now for a traditional loan. They both have steady jobs: he trims trees, she waits tables. Their fateful refinancing was used to pay off $10,000 in credit card debt accumulated when they traveled to Thailand, his wife’s native country, for their wedding.
The $205,000 loan, which the Larsons signed in February 2005, required them to pay only interest at first, or $11,400 a year, with the 5.6 percent rate to reset after two years. Mr. Larson knew there was a prepayment penalty, but thought it expired in two years; it was actually three years. Now the Larsons’ payments have climbed to $19,000 annually, at a new rate of 9.3 percent.
“It was a loan made with no regard for whether it would be affordable when the rate increased,” said Jordon Ash of Acorn Financial Justice Center, an organization in St. Paul that is trying to help the Larsons. The mortgage broker who advised the Larsons could not be found, and phone calls to the company, Ace Mortgage, were not returned.
Mr. Larson worries that his creditworthiness is sinking as the couple struggle to make the monthly payments. By the time the penalty expires, he may not be able to refinance.
“I had good credit,” he said. “Now it is going down because we can’t keep up. I feel like I am drowning.”
Experts say that many borrowers do not really understand the implications of prepayment penalties — if they are aware they have them at all — and fall prey to sophisticated marketing. In a 2002 lawsuit by Acorn on behalf of a group of borrowers against Household Finance, Acorn said that lenders referred to the practice as “closing the back door” by making it too costly for borrowers to get out of loans with rising rates.
The art of finding borrowers was carefully honed, according to the lawsuit. Among the techniques was sending a check and telling recipients they could have access to a small loan by cashing it. Those who did went on a hot list of prospects in a strategy referred to as target practice, according to the suit.
The penalty “is just an added fee that means more money to the lenders,” said Melissa A. Huelsman, a Seattle lawyer who specializes in predatory lending law. “It is one piece of paper that a borrower signs in a stack of 50 papers. For many people, even if they saw the words, they wouldn’t understand them.”
That was the case for Gertrude Robertson, a 91-year-old widow and nurse’s aide living in Seattle who took out an adjustable-rate mortgage of $450,000 in January.
Even at her age, Mrs. Robertson was earning $3,500 a month, largely by caring for another elderly woman. Then the woman died. Mrs. Robertson’s income was reduced to her monthly Social Security payment of $1,500. Meanwhile, her loan ballooned to $475,000. Unable to make the payments, Mrs. Robertson is listing her home for $510,000.
Mrs. Robertson’s mortgage includes a prepayment penalty of $14,400. A sale at her asking price would not only wipe out any equity but require her to write a check for about $8,600 to cover the penalty and other costs.
Mrs. Robertson says her broker did not give her time to study the loan documents. “Some words I don’t understand,” she said. “When I heard the lady I used to work for tell someone that I was the ‘epitome of cleanliness,’ I went home and cried. I thought I was going to be fired.’ I didn’t know what it meant.”
Last week, Ms. Huelsman persuaded a court in California to waive the prepayment penalty for Mrs. Robertson. She is seeking to have other fees thrown out as well. The loan was made by New Century Financial, now in bankruptcy protection.
The loan servicer, HomeEq, prefers to work one-on-one with customers and does not comment on individual cases, a HomeEq spokeswoman said.
A study by the Center for Responsible Lending shows that borrowers in minority neighborhoods received a disproportionate share of loans with prepayment penalties. The Pew Hispanic Center reported in 2002 that African-American families had a median net worth of just under $6,000. Hispanic families had nearly $8,000. For white Americans, the median net worth was $88,651.
Waiting out the expiration of a penalty, especially a short one, does not sound so bad — until home prices turn south.
That is what happened to Dorinda Weisman, a social worker in Elk Grove, Calif. In 2005 she borrowed $353,000 from Pacific American Mortgage to buy a home in Sacramento with a small down payment. The prepayment penalty, of $9,000, expired in just a year.
“One of the things I always wanted was to own a house,” Ms. Weisman said in a telephone interview. “I was a single parent, and my son is a hemophiliac. I had been living in a middle-class African-American neighborhood that went downhill after the drugs came in.”
By the time the penalty expired, her house had declined in value. Refinancing was no longer possible.
Her interest rate had shot up to 9.8 percent from 4.75 percent. She says about 85 percent of what she brings home — her salary is $60,000 as a social service consultant with the state government — now goes to the mortgage.
She is trying to negotiate a new loan with the help of the Neighborhood Assistance Corporation of America, a nonprofit home ownership organization based in Jamaica Plain, Mass.
“Like a lot of people, the adjustable ate up her equity,“ said her mortgage broker, Antonio Cook of Toneco Financial. “She’s got to ride it out and sacrifice. I tell people, ‘I don’t care if you eat bologna sandwiches, just pay your bills on time.’ If she can ride it out, things start coming up good.”
http://www.timesdaily.com/article/20070913/ZNYT01/709130348&cachetime=5
Modified mortgages: Lenders talking, then balking
Congress, banking regulators and President Bush all are promoting a potential way for subprime borrowers to avert foreclosure. Called loan modification or loan workout, it means changing a mortgage's terms to make the payments more affordable.
Mortgage lenders have publicly embraced the concept, saying they care about "home ownership preservation" and will work to prevent foreclosures. A "loan mod" might involve freezing the interest of an adjustable-rate mortgage, for example - perhaps setting payments at 8 percent instead of letting them soar to 11 percent.
But consumer advocates say it appears that few modifications are actually occurring, and lenders refuse to provide any data to show how common the practice is.
Chase, Washington Mutual and Wells Fargo banks all declined to provide The Chronicle with statistics on how many mortgages they modify and who qualifies, although all have said publicly that they want to help troubled homeowners. Countrywide Financial, which has also promoted its loan modification efforts, did not return calls.
"There definitely is a disconnect between what the lenders are saying and what borrowers and counseling agencies are experiencing," said Kevin Stein, associate director of the California Reinvestment Coalition, a statewide advocacy alliance that promotes access to credit. "It is disheartening to hear from counseling agencies that things are not working out the way they should. There is no accountability. There is no way for anyone to know if what the banks say is coming to pass."
Around the Bay Area, workers at housing counseling agencies said they have seen few, if any, loan modifications offered to their clients.
Lenders are uniformly unwilling to make loan modifications for homeowners whose interest rates are resetting higher, said Rick Harper, director of housing at Consumer Credit Counseling Services of San Francisco, which talks to about 1,000 delinquent borrowers a month.
On the other hand, he said, for people with short-term financial crunches - from job loss, illness or divorce, for instance - lenders today are more amenable to modifications and forbearance. That allows homeowners to make reduced or no payments temporarily, then the extra amount is tacked onto the loan at the end.
The catch-22 is that the homeowners who most need loan modifications are not those with temporary problems. They are people who signed up for adjustable-rate mortgages and now cannot make the escalating payments.
The problem is certain to get more acute. About 2 million ARMs are due to reset sharply higher in the next 18 months. Because most of those homeowners cannot afford the higher rates - and the softening housing market means they cannot refinance or sell for enough money to repay the loan - those resets are likely to trigger a huge wave of foreclosures unless the loans are modified.
"Lenders are not modifying these (adjustable-rate) loans," said Martin Eichner, director of dispute resolution at Sunnyvale's Project Sentinel, a nonprofit agency that helps consumers with housing problems. "A lot of these loans are so hopeless and irrational that lenders won't even talk to us."
Lenders are tight-lipped about many aspects of loan modification, including how they decide which borrowers qualify for workouts.
But anecdotal evidence suggests that the people who get loan workouts are those with healthy financial profiles: good income, high credit scores, money in the bank, equity in their house - in short, people who would qualify for prime loans or refinancing. That effectively leaves out the homeowners who most need loan modifications. If their finances had been sterling in the first place, they would not have been subprime borrowers.
To be sure, many subprime borrowers have a basic problem that a loan modification cannot solve: They cannot afford their houses. They never should have gotten the mortgages they have now. They might have exaggerated their incomes or underestimated the drain of monthly payments.
Still, it appears that more people might qualify for loan modifications than actually receive them.
The NeighborWorks America Homeownership Preservation Foundation runs a hot line for troubled homeowners. In recent months, a huge national campaign has promoted its (888) 995-4673 number. The hot line counseled 15,207 people in the second quarter, analyzing their budgets in detail. Of those, 26 percent were told they might qualify for a loan workout, according to Tracy Morgan, a spokeswoman for the group. Another 28 percent were told to try to improve their budgets then seek a workout.
The group has no data on whether any of those homeowners actually received a loan modification.
Lenders say it's only common sense that they apply due diligence to candidates for modifications.
"If the borrower is not going to be able to handle even a modified loan in the long term, it's probably good for the lender, investor and borrower to face that fact early on," said Tom Kelly, a spokesman for Chase, which services half a trillion dollars of mortgages. "To extend somebody so they can make payments for (an additional) six months and then face foreclosure anyway, (doesn't) accomplish very much. We've incurred more costs on behalf of the investors (and those) investors are not much closer to getting their money back. If the borrower can't handle it, they can't handle it."
In talking about investors, Kelly is referring to the fact that most mortgages today are packaged and sold on Wall Street in a process called securitization. That creates roadblocks for loan modification because the bank that collects consumers' payments often does not have the authority to decide about a workout. Securitization also raises concerns about tax and accounting consequences of loan modifications.
But this summer, Congress aggressively pushed government agencies to help remove those impediments. The Securities and Exchange Commission and the Financial Accounting Standards Board issued letters saying that loans could be modified even before the homeowner had missed payments if it was "reasonably foreseeable" that default might occur.
Kelly said Chase is proactively calling ARM borrowers two to five months before their reset date to make sure they are aware what their payments are likely to be. If homeowners say they cannot afford the higher rate, Chase contacts the investors to see if they are willing to offer a workout.
"We want to get as high and fair a rate as the contract allows, but we want to also be able to collect it," he said.
There are several reasons loan modifications could help all parties and might start becoming more common as the wave of ARM resets hits.
Politically, they are palatable because they do not involve a taxpayer bailout for homeowners who got in over their heads. Instead, the lender (or investor) picks up the tab, but the homeowner obviously still has to consistently make payments.
Financially, they make sense for lenders and investors compared with the alternative of foreclosure. A foreclosure can cost the lender from 20 to 40 percent of the loan balance, said John Mechem, a spokesman for the Mortgage Bankers Association in Washington, D.C. "There's a real incentive for lenders wherever possible to work out some sort of agreement," he said.
Chris Cagan, director of research and analytics at First American CoreLogic, a research firm in Santa Ana, agreed.
"The lender would rather have a performing loan than have a (property) vacant, possibly for a year in a slow market, paying taxes, maintenance, insurance and finally selling it at a discount. They really don't want to do that. They'd rather keep that thing on their books as a performing asset and not have to take a hit. It's not because they love humanity."
http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/09/13/MNJ8S1FKC.DTL
Mortgage lenders have publicly embraced the concept, saying they care about "home ownership preservation" and will work to prevent foreclosures. A "loan mod" might involve freezing the interest of an adjustable-rate mortgage, for example - perhaps setting payments at 8 percent instead of letting them soar to 11 percent.
But consumer advocates say it appears that few modifications are actually occurring, and lenders refuse to provide any data to show how common the practice is.
Chase, Washington Mutual and Wells Fargo banks all declined to provide The Chronicle with statistics on how many mortgages they modify and who qualifies, although all have said publicly that they want to help troubled homeowners. Countrywide Financial, which has also promoted its loan modification efforts, did not return calls.
"There definitely is a disconnect between what the lenders are saying and what borrowers and counseling agencies are experiencing," said Kevin Stein, associate director of the California Reinvestment Coalition, a statewide advocacy alliance that promotes access to credit. "It is disheartening to hear from counseling agencies that things are not working out the way they should. There is no accountability. There is no way for anyone to know if what the banks say is coming to pass."
Around the Bay Area, workers at housing counseling agencies said they have seen few, if any, loan modifications offered to their clients.
Lenders are uniformly unwilling to make loan modifications for homeowners whose interest rates are resetting higher, said Rick Harper, director of housing at Consumer Credit Counseling Services of San Francisco, which talks to about 1,000 delinquent borrowers a month.
On the other hand, he said, for people with short-term financial crunches - from job loss, illness or divorce, for instance - lenders today are more amenable to modifications and forbearance. That allows homeowners to make reduced or no payments temporarily, then the extra amount is tacked onto the loan at the end.
The catch-22 is that the homeowners who most need loan modifications are not those with temporary problems. They are people who signed up for adjustable-rate mortgages and now cannot make the escalating payments.
The problem is certain to get more acute. About 2 million ARMs are due to reset sharply higher in the next 18 months. Because most of those homeowners cannot afford the higher rates - and the softening housing market means they cannot refinance or sell for enough money to repay the loan - those resets are likely to trigger a huge wave of foreclosures unless the loans are modified.
"Lenders are not modifying these (adjustable-rate) loans," said Martin Eichner, director of dispute resolution at Sunnyvale's Project Sentinel, a nonprofit agency that helps consumers with housing problems. "A lot of these loans are so hopeless and irrational that lenders won't even talk to us."
Lenders are tight-lipped about many aspects of loan modification, including how they decide which borrowers qualify for workouts.
But anecdotal evidence suggests that the people who get loan workouts are those with healthy financial profiles: good income, high credit scores, money in the bank, equity in their house - in short, people who would qualify for prime loans or refinancing. That effectively leaves out the homeowners who most need loan modifications. If their finances had been sterling in the first place, they would not have been subprime borrowers.
To be sure, many subprime borrowers have a basic problem that a loan modification cannot solve: They cannot afford their houses. They never should have gotten the mortgages they have now. They might have exaggerated their incomes or underestimated the drain of monthly payments.
Still, it appears that more people might qualify for loan modifications than actually receive them.
The NeighborWorks America Homeownership Preservation Foundation runs a hot line for troubled homeowners. In recent months, a huge national campaign has promoted its (888) 995-4673 number. The hot line counseled 15,207 people in the second quarter, analyzing their budgets in detail. Of those, 26 percent were told they might qualify for a loan workout, according to Tracy Morgan, a spokeswoman for the group. Another 28 percent were told to try to improve their budgets then seek a workout.
The group has no data on whether any of those homeowners actually received a loan modification.
Lenders say it's only common sense that they apply due diligence to candidates for modifications.
"If the borrower is not going to be able to handle even a modified loan in the long term, it's probably good for the lender, investor and borrower to face that fact early on," said Tom Kelly, a spokesman for Chase, which services half a trillion dollars of mortgages. "To extend somebody so they can make payments for (an additional) six months and then face foreclosure anyway, (doesn't) accomplish very much. We've incurred more costs on behalf of the investors (and those) investors are not much closer to getting their money back. If the borrower can't handle it, they can't handle it."
In talking about investors, Kelly is referring to the fact that most mortgages today are packaged and sold on Wall Street in a process called securitization. That creates roadblocks for loan modification because the bank that collects consumers' payments often does not have the authority to decide about a workout. Securitization also raises concerns about tax and accounting consequences of loan modifications.
But this summer, Congress aggressively pushed government agencies to help remove those impediments. The Securities and Exchange Commission and the Financial Accounting Standards Board issued letters saying that loans could be modified even before the homeowner had missed payments if it was "reasonably foreseeable" that default might occur.
Kelly said Chase is proactively calling ARM borrowers two to five months before their reset date to make sure they are aware what their payments are likely to be. If homeowners say they cannot afford the higher rate, Chase contacts the investors to see if they are willing to offer a workout.
"We want to get as high and fair a rate as the contract allows, but we want to also be able to collect it," he said.
There are several reasons loan modifications could help all parties and might start becoming more common as the wave of ARM resets hits.
Politically, they are palatable because they do not involve a taxpayer bailout for homeowners who got in over their heads. Instead, the lender (or investor) picks up the tab, but the homeowner obviously still has to consistently make payments.
Financially, they make sense for lenders and investors compared with the alternative of foreclosure. A foreclosure can cost the lender from 20 to 40 percent of the loan balance, said John Mechem, a spokesman for the Mortgage Bankers Association in Washington, D.C. "There's a real incentive for lenders wherever possible to work out some sort of agreement," he said.
Chris Cagan, director of research and analytics at First American CoreLogic, a research firm in Santa Ana, agreed.
"The lender would rather have a performing loan than have a (property) vacant, possibly for a year in a slow market, paying taxes, maintenance, insurance and finally selling it at a discount. They really don't want to do that. They'd rather keep that thing on their books as a performing asset and not have to take a hit. It's not because they love humanity."
http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/09/13/MNJ8S1FKC.DTL
Va Home Loan Refinance
The point of this va home loan refinance newsletter is to help you to a higher level as well as show you all this remarkable topic has to propose.
Loan takers with the luxury of deciding from 30 and 15-year mortgages refinance terms must resolve if they`re payment-minimizers or profit-maximizers. The first position is mostly concerned with today while the maximizers with the future.
A home loan refinance installment for a 100K US$ 30-year loan at 7% is 665 US$ while for a 15-year loan at 6.75% it is 885 US$. A lower installment of the thirty year is certainly attractive.
On the other hand, after 5 years a borrower who received the fifteen year mortgage has repaid 20K USD while a borrower who took out the thirty year has paid out only 5 thousands US$. That totals a wide spread regarding assets accumulation of $15K.
The "flexibility" that you mention as the advantage of the 30-year mortgage is actually the freedom to spend the difference of cost on other items. Yet, I`m amazed by how many people choose the thirty year plan to get this freedom, and afterwards see they actually don`t want it! Following a few years of being homeowners, the people find out that the thing they really desire is to accrue ownership more rapidly than the 30-year loan enables. The people realize, essentially, the relevance of the future.
At this point, many of those that took out 30-year loans begin systematically putting down additional payments in order to build ownership faster. Of course, the people would`ve been wiser to take the 15-year from the beginning and benefiting from the reduced interest rate, but better late then never.
Several of these impatient borrowers are not able to find the willpower that a voluntary investments program requires. These are the ones that are attracted to the bi-weekly installment programs that are offered by several lenders and/or 3rd party groups. With a biweekly policy, in lieu of one monthly installment, a borrower puts down 50% the monthly payment every 2 weeks. This results in twenty-six payments yearly, which means 13 monthly payments as opposed to twelve. The additional installment yearly develops equity quicker.
Since a biweekly entails a contractual obligation from a loan taker, it offers a discipline that the personally designed policies don`t have. A loan taker covers this discipline with an initial fee and with forfeited interest on the accelerated payment. These are extra costs a loan taker might have avoided through taking out the 15-year mortgage at the beginning.
There is one circumstance where a profit-maximizing borrower that is able to make the payment on a fifteen year loan may otherwise opt for a thirty year loan. A loan taker with appealing business ventures, such as a private business or stocks, may select a longer term and use the difference in installment for fruitful ventures. This va home loan refinance work is the greatest solution to obtain the information that you require in order to fully comprehend the difficulty of this issue.
http://www.avahomeloanrefinance.com/
Loan takers with the luxury of deciding from 30 and 15-year mortgages refinance terms must resolve if they`re payment-minimizers or profit-maximizers. The first position is mostly concerned with today while the maximizers with the future.
A home loan refinance installment for a 100K US$ 30-year loan at 7% is 665 US$ while for a 15-year loan at 6.75% it is 885 US$. A lower installment of the thirty year is certainly attractive.
On the other hand, after 5 years a borrower who received the fifteen year mortgage has repaid 20K USD while a borrower who took out the thirty year has paid out only 5 thousands US$. That totals a wide spread regarding assets accumulation of $15K.
The "flexibility" that you mention as the advantage of the 30-year mortgage is actually the freedom to spend the difference of cost on other items. Yet, I`m amazed by how many people choose the thirty year plan to get this freedom, and afterwards see they actually don`t want it! Following a few years of being homeowners, the people find out that the thing they really desire is to accrue ownership more rapidly than the 30-year loan enables. The people realize, essentially, the relevance of the future.
At this point, many of those that took out 30-year loans begin systematically putting down additional payments in order to build ownership faster. Of course, the people would`ve been wiser to take the 15-year from the beginning and benefiting from the reduced interest rate, but better late then never.
Several of these impatient borrowers are not able to find the willpower that a voluntary investments program requires. These are the ones that are attracted to the bi-weekly installment programs that are offered by several lenders and/or 3rd party groups. With a biweekly policy, in lieu of one monthly installment, a borrower puts down 50% the monthly payment every 2 weeks. This results in twenty-six payments yearly, which means 13 monthly payments as opposed to twelve. The additional installment yearly develops equity quicker.
Since a biweekly entails a contractual obligation from a loan taker, it offers a discipline that the personally designed policies don`t have. A loan taker covers this discipline with an initial fee and with forfeited interest on the accelerated payment. These are extra costs a loan taker might have avoided through taking out the 15-year mortgage at the beginning.
There is one circumstance where a profit-maximizing borrower that is able to make the payment on a fifteen year loan may otherwise opt for a thirty year loan. A loan taker with appealing business ventures, such as a private business or stocks, may select a longer term and use the difference in installment for fruitful ventures. This va home loan refinance work is the greatest solution to obtain the information that you require in order to fully comprehend the difficulty of this issue.
http://www.avahomeloanrefinance.com/
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