A few months ago, President Barack Obama announced a foreclosure prevention plan called Making Home Affordable. The plan included provisions for those who wanted to refinance, but couldn’t because of their loan to value ratio. Refinancing would be encouraged for those who had a loan to value ratio of between 80% and 105%. The idea was to help those whose home values have dropped in response to housing market troubles.
Unfortunately, the program has been seeing limited success. It relies on voluntary help from mortgage lenders, and it excludes those with even higher loan to value ratios. Yesterday Obama made a …read more

With the Fed rate effectively at 0%, direct interest rate intervention is not practical. So the Federal Reserve has turned to quantitative easing, buying mortgage-backed securities and agency debt.

I received this question via email, regarding the “30% rule” when making your mortgage or rent payment:
I know that you’re supposed to stay around 30% of your income for housing costs per month. Is that 30% of net or gross, and is that only for the housing, or do they recommend staying under 30% for housing and all utilities?
This is an interesting question without a straightforward answer. “They” say many things, but from what I can tell from talking with some other financial types and consulting my common sense, the basic rule is 30% of your pre-tax (or gross) earnings, …read more

Yet another Fed rate cut is expected tomorrow. While some think that 50 basis points will be the magic number, others feel that 25 points is much more likely. But in either case, the continued efforts to save the economy with a Fed rate cut will likely affect you, whether it is an influence on mortgage rates, forex trading or the stock market. First Business reports on the Fed rate cut:

The word is out. Ben Bernanke’s famous “contained” statement about the subprime lending crash from not too long ago has been considered way wrong, and now rumors are flying of an emergency Fed meeting. The “shoddy” lending practices espoused by banks and brokers for the last decade have finally caught up with the U.S. economy. And in a big way. But how will the subprime lending crash affect you? Well, it depends on where you are standing.
Sure, lending standards are going to tighten. But on the other hand, mortgages rates have dropped already. And if the housing market and the …read more

One of the more popular modes of debt consolidation is using one’s home equity loan. Debt consolidation can be an effective debt management technique, and it can be a good part of a debt plan that is made to get out of debt fast. However, a home equity loan debt consolidation can be a risky way to go about it.
Why home equity loan debt consolidation seems attractive
If you have a great deal of debt, home equity loan debt consolidation seems attractive because you would never be able to get a debt consolidation loan that would pay off such a large …read more