Refinance Free Credit

Shares in Fannie Mae (FNM: 10.25, -22.35%) and Freddie Mac (FRE: 7.75, -3.12%) recovered late Friday somewhat from an incredible downswing that had reached as far as 50 percent off early on Friday, after Treasury secretary Henry Paulson stressed that no plans to bail out either GSE were imminent, and reports circulated that Fed chief [...]

The credit crunch is impacting not only consumers’ ability to get credit, and how they use it, but also– at least for some–their mindset towards financial institutions, according to a nationwide survey conducted by Deloitte LLP’s financial services industry group and released Friday morning. According to those who have attempted to secure several types of credit [...]

Dominating the mortgage REIT landscape this week were the persistent (bad) headlines about the insolvency and potential government bailout of Freddie Mac (FRE: 6.44, -19.50%) and Fannie Mae (FNM: 10.02, -24.09%); HW readers are likely well aware of the issues here by now. Receiving less attention, but no less damaging, has been the effect of [...]

Are you looking into using up your home’s equity? This is a big decision that can have some great payoff for you and your financial situation. You need to make sure that you are putting yourself into the best possible position to get the most out of this process. The following are some of the best ways that you can tap your home’s equity and have the payoff be big. Do not fall into any trap and forget what you are trying to accomplish. This is not good and can set you back. If you have any doubts about home equity then make sure you read up on it and really get to know what you are getting yourself into. Then continue on with it!

Cash Out Refinancing

This is a new mortgage that is for a larger amount then you currently owe on your current mortgage. The borrower will end up receiving the difference in cash. If you choose this kind then know that you might be up for some closing costs that you would not have faced otherwise. You also must be aware of how your first mortgage is working and see if this option even makes sense.

Piggybacking

If you use this option then you will have to take a first and second mortgage out concurrently. This will help you avoid private mortgage insurance as well as a down payment. You need to watch out that you do not default on this though because this tends to lead to that trouble. This is because people find that it is easier to overextend themselves.

Reverse Mortgage

You can get this type of equity based on the value of your home. The loan will not be paid until you leave the property and it allows you to convert the equity you built up into some cash. These are usually only available to seniors and they will have some restrictions. Just make sure that you look into how you can qualify and whether or not the restrictions hold you back.

Hybrids

There is a lack of uniformity in this part of the market. It is a variant that can occur between home equity loans and the line of credit. You need to make sure that you understand all of the details in the contract when you take out this type of loan. The more you keep track of the better the result will end up being. Know what you are getting yourself into.

Additional Resources:

• Frozen Home Equity Line Can Hurt You
• Tapping Home Equity for No Debt Cash

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Looking to quell investor fear over the solvency of both Fannie Mae (FNM: 10.02, -24.09%) and Freddie Mac (FRE: 6.44, -19.50%), Treasury chief Henry Paulson said Friday morning that no bail out was in the works, contrary to press reports Friday that had suggested that adminstration officials were considering conservatorship for one or both GSEs. “Today [...]

Good Debt

Some of your debt might be considered as an investment. If the debt was incurred to purchase something that can be expected to go up in value and contribute to your overall financial health, then it’s very possible that such debt is good. A home purchase, for example, could very easily be considered as good debt. Since homes (generally) appreciate in value, the mortage loan that you incur to buy your house is actually an investment. Another example of good debt would be a student loan taken out to finance higher education. Obtaining a college degree usually means that you’ll make more money over the course of your lifetime.

Bad Debt

However, just as there is good debt, there are bad kinds of debt as well. When you use debt to finance things that can be consumed, you generally aren’t accumulating good debt. This is the type of debt that creates an unhealthy financial situation. Credit card debt is usually considered bad debt because of the nature of the items that credit cards are often used to purchase. It's wise to avoid accumulating debt on everyday items such as clothes or food. If you use a credit card for these types of purchases, be sure to pay the card's balance off in full each month (doing so will allow you to avoid costly interest charges).

When evaluating your debt and overall financial situation, it’s usually a good idea to focus on paying off your bad debts first. Since they provide no value, they're more costly to carry than your good debts. Credit cards and auto loans (which generally have higher interest rates) should typically be paid off before tackling mortgages or student loans.

It’s a bad day to wear the label of “next Bear Stearns,” which means that it’s been a bad few days for Lehman Brothers Holdings Inc. (LEH: 14.04, -18.84%) — the fourth-largest U.S. securities firm has seen its shares battered as credit concerns moved to the forefront for investors and shares of government-sponsored housing giants [...]

Both Fannie Mae (FNM: 8.66, -34.39%) and Freddie Mac (FRE: 5.12, -36.00%) led a broader downturn in the financial market Friday, as investors continued to grapple with what some analysts said appeared to be an ever-nearer bailout of the housing financial giants. Shares in Freddie were at $4.54, down $3.46 — a whopping 43.25 percent [...]

A massive and controversial housing package moving through Congress passed a final procedural hurdle Thursday, with the Senate voting 84-12 to invoke cloture on the last portion of the bill; the package (HR 3221) appears set to pass a final Senate vote Friday, although a final bill will require negotiation between House and Senate leaders. [...]

From our tip line comes the news that most of Countrywide’s remaining Full Spectrum Lending branches will be closed tomorrow July 11th.  The Full Spectrum group is basically Countrywide’s subprime and Alt-A retail origination group.  The company’s been laying off folks in this division (and others) as part of its original downsizing plan.

Now that the Bank of America acquisition is complete and BofA announced it’s ceasing the origination of subprime loans it makes perfect sense for the new owners to try to phase this operation out as soon as possible.
From the tipster’s email:

Tommorrow 7/11/08, about 95% of the Full Specturm Lending (FSL) branches will be shut down.  They will keep open mainly the 2 or 3 national call centers and a hand full of branches here and there.  We’ve know it will happen for weeks now, but just never knew when it will offically happen.  So tommorrow is the day.  Countrywide will give us a severance package based on your tenure with the company and an average of your total gross earning for the last 12 months.  At least that’s they rumor from some of the other branches.  I’ve only been there for 4 months, so i’ll just get two weeks and that’s it.  Honeslty, almost everyone at our branch is relieved that we’re finally moving on.  Normally, when someone gets laid off one should feel some what sad, but this is the complete opposite.

If anyone can confirm this drop us an email on the tip line.

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