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The House of Representatives approved the $700 billion bailout plan by a 263 to 171 vote Friday. A revised version of the rescue bill passed a Senate vote late Wednesday evening, with 74 lawmakers approving the package in a roll call vote; 25 voted against. The new bailout package, however, wasn’t exactly changed from the bill [...]

There’s another suitor in line for Wachovia Corp. (WB: 6.34 +62.15%), and Citigroup Inc. (C: 18.58 -17.42%) doesn’t like it. In fact, Citi has taken the lovers’ spat to Judge Judy proportions by calling Wachovia’s agreement to sell to Wells Fargo & Co. (WFC: 36.86 +4.84%) a “breach of an Exclusivity Agreement” in a press [...]

MBIA Insurance Inc. (MBI: 9.99 -13.13%) filed a suit Tuesday against several units of Countrywide Financial Corp. (CFC: 0.00 N/A) over $14 billion in guarantees it provided for Countrywide mortgage bonds, alleging the lender fraudulently misrepresented its loan underwriting standards. The suit comes at a time when the California mortgage lender is already facing litigation filed [...]

A guest post by new Blownmortgage.com contributor, MG Dungan.  MG has gone from Wharton to Wall St. to real estate to Blown Mortgage. 

Update: Bill passes 263-171. See who voted yea or nay.

The Emergency Economic Stabilization Act of 2008 failed in the House—225 to 228— on September 29. In an unprecedented and unconstitutional move, the bill was sent to the Senate, loaded up with pork and overwhelmingly passed—75 to 24— with no substantive change to the provisions that caused it to be rejected by the House.

So, we want to know, where’s the stimulation?

What it won’t do:

1. Stimulate employment:

The plan has no direct affect on employment. Buying old bad debt from banks in exchange for brand-new, at-least-temporarily-good new debt does not decrease leverage, does not increase the money supply, and does not motivate banks to start lending. Really, who are they going to lend to in a rapidly deteriorating economy?

Further, it has little direct affect on employment other than on the Wall Streeters who will manage the pools of money.

It does not lighten the burden on Americans who are already in deep financial trouble; in fact, it increases the burden. The Treasury and Fed do not have an extra $700bn; they will have to borrow it. This bailout, the first tranche—not the whole thing, the first tranche— of which is $700bn, will be the largest tax increase in history.

Continue Reading »

A guest post by new Blownmortgage.com contributor, MG Dungan.  MG has gone from Wharton to Wall St. to real estate to Blown Mortgage. 

Update: Bill passes 263-171. See who voted yea or nay.

The Emergency Economic Stabilization Act of 2008 failed in the House—225 to 228— on September 29. In an unprecedented and unconstitutional move, the bill was sent to the Senate, loaded up with pork and overwhelmingly passed—75 to 24— with no substantive change to the provisions that caused it to be rejected by the House.

So, we want to know, where’s the stimulation?

What it won’t do:

1. Stimulate employment:

The plan has no direct affect on employment. Buying old bad debt from banks in exchange for brand-new, at-least-temporarily-good new debt does not decrease leverage, does not increase the money supply, and does not motivate banks to start lending. Really, who are they going to lend to in a rapidly deteriorating economy?

Further, it has little direct affect on employment other than on the Wall Streeters who will manage the pools of money.

It does not lighten the burden on Americans who are already in deep financial trouble; in fact, it increases the burden. The Treasury and Fed do not have an extra $700bn; they will have to borrow it. This bailout, the first tranche—not the whole thing, the first tranche— of which is $700bn, will be the largest tax increase in history.

Continue Reading »

Fannie Mae (FNM: 1.65 +5.77%) announced late Thursday that it will scrap a planned increase in its existing adverse market delivery charge. Fannie first announced the delivery charges in December 2007 in response to “accelerated deterioration of market conditions.” The 0.25 percent upfront charge was set to apply to all whole loan mortgages purchased and all [...]

Scrapping a federally-backed deal with Citigroup Inc. (C: 22.50 0.00%), Wachovia Corp. (WB: 3.91 0.00%) announced early Friday that it would instead accept an offer from Wells Fargo & Co. (WFC: 35.16 0.00%) for the entire company sans any government intervention. The deal is worth approximately $15.1 billion, and involves an offer of $7.00 per [...]

Refinancing your home mortgage can come with some great perks. If you do it with no money out of pocket, you can skip one to three mortgage payments. You can save money on your payment or pay off your entire mortgage faster when you have better terms. Here are a few things to pay attention to when you refinance your mortgage loan, to make sure that you don’t overlook anything that you might regret, or that can cause you problems later:

1. Apply for a pre-approval to many different lenders to make sure you are getting the lowest rate possible. When you do this, make sure that with the initial pre-approval application, the lender is not pulling your credit history. You will want to reserve your credit pull for the lender that you are most likely to work with. You can decide that after you have gone through the preliminary pre-approval process with a few lenders. Each time your credit is pulled, it docks your credit score just a little. If you have too many inquiries, it could keep you from refinancing your mortgage loan with the lowest rate possible. When you pre-apply for home mortgage loans online, most lenders or mortgage service companies will not initially pull your credit. Check for information about this on their website. They will usually tell you whether or not they are going to pull your credit. Also, if on the application you do not give them your social security number, they cannot pull your credit. If, on the application, they ask you to describe your credit, they are probably not pulling your credit.

2. Make sure that your original mortgage does not have a pre-payment penalty or early payoff penalty of any kind. Sometimes people will get into their mortgage with the mortgage having a pre-payment penalty and they will not even know about it. Pre-payment penalties usually range from 6 months to 3 years with a penalty for an early payoff. The penalty is usually about the amount of 6 months worth of your mortgage loan interest, but this varies. You would have to be able to have some significant payment and interest savings on your refinance loan to justify refinancing a mortgage loan with a pre-payment penalty.

3. When evaluating different lender offers, in the mortgage loan pre-approval process, pay closest attention to the interest rates they are offering & the closing costs. These are the two biggest factors that will help you figure out which lender is right for you. If one of these two factors is too high, it could offset the benefit of refinancing for you.

4. Get your interest rate and closing costs in writing as soon as you decide on a lender to work with. Get your lender to give you a commitment in advance of all of the costs that will be involved with your loan. Find out if the refinance loan you are getting has a pre-payment penalty as well. Sometimes lenders will leave out important information like this, if they think it might scare you away from refinancing with them.

The Canadian Imperial Bank of Commerce said Friday that it was the latest non-U.S. institutional investor to flee U.S. real estate, selling a $1.05 billion stake in its portfolio of U.S. RMBS and CDOs to a fund managed by Cerberus Capital Management, LP. CIBC said its U.S. real estate reference portfolio had been valued at [...]