If you need to borrow money in a hurry, no problem


In Cambodia, U.S. dollars and the national currency are accepted interchangeably. The note top left, 100 riels, is worth 2.5 cents. Coins do not exist, and paper notes often are grubby beyond words.

It is easy enough for even the most impoverished Cambodian to borrow, say, $10,000, in the event of an emergency such as an arrest that requires bail, a fire that damages a house or shop, or a medical issue.

Paying back the loan is another thing altogether.  And not paying, well. . .

The parallels to the vigorish that the underworld charges in the West are inescapable.  I don’t really know what the criminally avaricious charge elsewhere, but here it is Continue reading

Do extra mortgage payments make sense?

Citibank was kind enough to e-mail me the other day about my mortgage.  The message, with details that I have obscured, reads as follows:

Dear Malcolm N Carter:

Take 5 years and 3 months off your current mortgage and save $1,xxxxxxxxxx — all without refinancing!

The BiWeekly AdvantageSM Plan puts your mortgage on your pay schedule, potentially saving you thousands in interest. Not only does this make paying for your mortgage more convenient, it can help you pay off your mortgage years sooner. Many homeowners try to make extra principal payments, but it’s easier said than done. Let The BiWeekly AdvantageSM Plan do the work for you.

Here’s how it works:

Instead of you making 12 monthly payments per year, FNC Insurance Agency withdraws half of your monthly payment every 14 days.

FNC then sends your full mortgage payment to CitiMortgage every month, on time.

At the end of the year, you’ve made the equivalent of one extra monthly payment, which is applied against your mortgage principal.

In my naivete, I actually gave the suggestion more than a moment’s thought.  At the same time, my cynical view of banks tempered any enthusiasm for the notion that Citi proposed.  Then, I fortuitously came across a Washington Post column by Jack Gutentag on the very subject. Continue reading

Condo refinancing may be easier than was known; One reason: some banks now welcome jumbos

A downtown Manhattan Web site called The Broadsheet tells the tale of a condo owner with good credit whose applications for refinancing his mortgage at Wells Fargo and JPMorgan Chase were rejected.

The banks said they based their decision on a Fannie Mae rule that discourages banks from making loans on apartments in buildings in which a single entity (even the sponsor) owns more than 10 percent of the units.

Unable to get specific answers from loan officers about how any condo where the developer retains a substantial presence (there are hundreds in Manhattan alone) could be eligible for financing, the unidentified applicant went directly to Fannie Mae and discovered the following:

“When I finally tracked down the people who are in charge of mortgages for condos, they explained to me that most banks were not interpreting these rules correctly.The Fannie Mae executive I spoke to said that banks in places like New York actually have much more leeway than they realize.”

This executive pointed out that the new rules do not apply to every bank and to every market on a blanket basis.  Continue reading

Builders, Realtors groups blame the messenger

According to the National Association of Home Builders (NAHB), it’s not the economy, stupid.  It’s not those avaricious lenders of sub-prime loans to unqualified buyers.  It’s not exotic hedge funds.  Nor is it government regulators.

No, it’s. . . appraisers!

Get this from an NAHB press release this week (and just wait until you read the last paragraph of the release, in boldface way below):

“Using foreclosed and distressed sales as comparables with appraisals on single-family homes without adequately reflecting the differences in the condition of the respective properties is needlessly driving down home values.”

That’s the lead paragraph. The release then quotes its chairman of the board, whose photo is below. Says Joe Robson, a home builder from Tulsa, Okla.:

“Any home buyer can recognize the difference between a well-kept home and a distressed property that is damaged or not properly maintained. So it only makes sense that an appraiser should be required to consider the overall condition of a property and the specific factors related to a foreclosure or distressed property sale when selecting and adjusting the value of comparables.”

If you are buying or selling real estate, this is an issue that you’ll discover runs close to home. One reason Continue reading

There’s good and bad news in TARP repayments

med_21787d36db98f2b88ccd713761a4ffe2In a piece reporting that 10 large banks have received permission to repay the federal government’s TARP money, the New York Times says returning the total $68.3 billion might make it harder for borrowers to obtain mortgage loans.

The good news is Continue reading