Utah Second Mortgage To See Rate Freeze?
Those looking for a Utah Second Mortgage may be affected by the lender agreement to freeze rates on loans. Unfortunately, the agreement seems likely to INCREASE rates rather than lower, or even maintain them. The NY Time writes:
The plan, hammered out after weeks of talks among Treasury Department officials, mortgage lenders and Wall Street firms, would allow distressed borrowers who are current on their payments to keep their low introductory rates and escape an increase of 30 percent or more in their monthly payments when the rates expire.
Democratic lawmakers and presidential contenders quickly criticized the plan as being too timid and promoted more ambitious proposals of their own.
The agreement, to be formally announced Thursday by President Bush, is expected to contain numerous limitations that would exclude many — if not most — subprime borrowers, according to industry executives who have seen it. It would exclude those who are delinquent on their payments — about 22 percent of all subprime borrowers, according to First American LoanPerformance, an industry research firm.
Those considering a mortgage loan may want to race to the nearest lender. Rates are gonna skyrocket after this gets implemented.
Amid Subprime Disaster, Accounting Rules Remain Unchanged
US Accounting code, long considered dated by the international community, has remained unchanged despite the total disaster which it helped create during the recent subprime lending craze. Reuters is reporting:
”The regulator’s tools for the most part are disclosure,” Roel Campos, former U.S. Securities and Exchange Commissioner (SEC), said at the International Federation of Accountants’ World Accountancy Forum in New York on Tuesday.
“I don’t know that it is appropriate to expect regulation, regulators, and standard setters to essentially prevent the next restructuring or subprime mortgages,” he said in response to a question from Financial Accounting Standards Board Chairman Robert Herz.
“Maybe there is a different way of thinking about the risks in the system and how to govern the financial system,” Herz told the forum. “I don’t know where the balance is, but we’re somehow not getting it right.”
Loose lending standards, rising interest rates in 2005 and 2006, and falling house prices led to an increase in the number of less-credit-worthy U.S. borrowers and contributed to a U.S. housing market slump.
While it’s gotten much harder to qualify for loans like a Utah Second Mortgage, lenders have escaped regulation (and punishment) for the reckless lending they did in recent years.