Rate Volatility for First Time Buyer Mortgages

The downgrade of U.S. debt to AA+ by S&P has caused an enormous amount of volatility in the financial markets dating back to about the third week of July. Clearly, we’ve seen stocks fluctuate wildly. A great example was the Fed’s release yesterday that floored the market and then sent it rocketing higher at close. At the end of the day, both stocks and mortgage bonds increased in price. Stocks going higher will typically mean interest rates are heading higher and mortgage bonds going higher will typically mean that interest rates are heading lower. That conflict will sort itself out and it’ll likely be a volatile run for the next few days, weeks and months ahead. This is going to make for an interesting next few months as we evaluate state programs for first time home buyers.


Mortgage rates are significantly different if you are talking about a state-sponsored program or any other ‘normal’ program like FHA or conventional. The reason for this is that they derive their interest rates from different factors. So, if you are looking at a FHA or conventional loan, your interest rate is based on what is happening in the financial markets at that moment in time. When we have unprecedented volatility, FHA and conventional have volatile days as well. For state-sponsored mortgage programs, it is a little different. States typically sell bonds to fund these programs and they do so in large blocks periodically. This means that from day to day, that mortgage rate won’t typically change. When that pool runs dry, the state will often sell another amount of bonds and then first time home buyers would see those rates for some period of time. When states happen to raise money when money is cheap, that block is then based on a lower rate for home buyers during that period. As much as the degree of state subsidies varies from state-to-state, so too does just the timing of when the money was raised. So, there are many factors influencing differences between Michigan home buyer programs and Texas home buyer programs

Consumer credit card debt elimination, modern day snake oil


If you have lived long enough and spent the time to pay close attention you will notice that trends often appear in cycles. What is cool now will be cool once more 10 years from now. Just look at all the new fashions men and women are wearing these days. You might recognize many of them from your own youth, or the youth of your parents. This is the natural order of things. Individuals become crazed with something until it ultimately burns itself out, but as soon as enough time has gone by someone chooses to bring back those old trends to go for yet another round on a fresh number of people.

This procedure of cycles doesn’t limit itself to merely fashion. It may also be noticed in other facets like debt relief. To comprehend this, you will need to comprehend the numerous forms of credit card debt relief. The oldest of these forms is Bankruptcy. This was designed as a way for people who fell on difficult times to avoid being shot, hung or going to debtors’ prison. As time continued however people realized that this became an instrument that could possibly be used and taken advantage of. People would deliberately overextend themselves and as soon as they hit their max capacity, they’d seek bankruptcy relief and have it all wiped away.

For many years banks lobbied to get this changed. About 1995 the bankruptcy abuse act was established. This put tougher restrictions on who could and couldn’t qualify for a chapter 7 bankruptcy. It put a bigger focus on a chapter 13 bankruptcy, which is actually a repayment program where individuals could wind up paying eighty percent or a lot more back to the lenders.

To balance out the deficits they were seeing because of the rise in bankruptcies, the banks started to increase interest rates. After a while the interest rate caps raised to around 30 % or more. This put many people who had been still paying their debts either on a never ending cycle of paying minimum payments and getting nowhere fast, or on the edge of falling behind. Because of this the consumer credit counseling program arose. In most circumstances these agencies were run, or at least backed by the lenders themselves. What this enabled folks to do is to stop making use of their credit cards and enter them into this program. The company would seek to lower all the interest rates then you’d make one monthly payment to the agency who’d disperse that out to the creditors on a monthly basis.

The good part regarding this program is that you were capable of paying down the debt in 5 to 6 years. That is naturally considerably better than taking thirty or greater years. But, the downside was that the payment you had been making was usually the same as your minimum payments in the very first place, so in case you had been in a position where you had been going to fall behind, then this would not avoid this.

Once again with most things, individuals became greedy and as increasingly more individuals chose to ring up their credit cards then enter them into a Consumer Credit Counseling program seeking zero percent interest charges forever, the credit card companies changed several of their procedures. Several of them did away with zero percent interest levels or restricted them to one year. They also started to reevaluate folks after six months to a year, to see if they still qualified for the program.

Subsequent came the debt consolidation loan boom. As property values started to increase, mortgage brokers found a growing number of men and women with equity within their homes that might be accessed. Thus began the home equity loan boom. A multitude of individuals began to tap into their homes equity and consolidate their debt into one reduced monthly payment. But again greed began to take over. As the pool of prospective individuals who qualified for conventional loans disappeared, the industry began to create new adjustable rate loans for individuals who would not have normally had the opportunity to obtain a loan. This became the start of the housing collapse. As with every bubble, if you keep inflating and blowing it up eventually, it is going to pop. And this is what happened. As these adjustable rate loans started to change, many of them tripled the interest rates forcing the home owner to get behind and in a lot of circumstances lose their houses.

As you may know there are always likely to be those individuals who will benefit from individuals who are in dire straits. We commonly call these individuals “snake oil salesmen” coined in the early years when individuals would sell fake potions to remedy every little thing from baldness to rheumatoid arthritis. These get wealthy fast sort of folks would sell this tonic to people eager for a cure. Often times really quickly, folks would recognize that this was a scam, but not before lots of people would have become victim to them. If the salesperson wasn’t hanged, he’d lay low, journeying from town to town until folks forgot about him and also the fact he was a sham, then he would pop his head up once again selling his snake oil to people who didn’t know it was a scam.

Just as these snake oil salesmen, there are people within the debt relief programs industry that attempt to benefit from folks in desperate situations. One kind of this get wealthy scam is what is known as debt elimination. The concept of this is that you simply hire an attorney who will try to sue the collectors saying that the debt is not valid. They try to make use of old loopholes in the law saying that it’s illegal how they calculate interest rates, or forcing them to “prove” that is is your debt. No matter what these individuals tell you, ask yourself this one question. Did you charge the debt? Did you benefit from using the charge card by making purchases for merchandise that you owned? Unless somebody stole your card and made purchases you didn’t find out about, or the bank added charges to your bill that belongs to another individual, in most all situations the response to that question is going to be yes. That being stated, you’re going to be hard pressed to persuade a judge that the debt is not yours and that you don’t owe it.

The final type of debt consolidation program is debt negotiations. There are essentially two types of debt negotiations. The very first is called Debt resolution. This is where you hire an attorney to negotiate with your collectors, on your behalf, in an attempt to get them to agree to accept much less than your full balances. The main issue with this form of debt relief, it that in most cases the debt settlement law firm will charge a retainer as well as a monthly legal fee upfront before any settlements have been achieved. This is typically on in addition to their settlement fees. Though it may well appear reasonable to pay a law firm to legally represent you, what many individuals do not recognize is that the law firm won’t represent you in court. The truth is, many of them will not even assist with answering the lawsuit. All they are representing you for is to negotiate your debt and that’s it. So basically you’re paying them extra to do totally nothing.

The next type of debt negation is called debt settlement. As with the above example, this is where the debt is negotiated for much less than what you currently owe by a qualified debt settlement company with a confirmed track record.  Just as with the lawyers you can find those debt settlement companies that may attempt to take fees in advance. Beware, it goes against existing regulations. Any reputable settlement company will in no way charge you for their services before debt has been settled.

It truly does not matter what form of debt relief you choose to go with, ultimately you’ll need to be properly informed. A reputable company will do everything they are able to to make certain you understand all of your options and have a clear comprehension of all of them.  They won’t try to push you into anything and will go into great detail when looking at your case. If you are seeking debt settlement do your research and ensure you’re dealing with a company that is willing to follow the regulations, not charge you any fees until a settlement has been reached, and who will make certain that the alternative they offer you is genuinely the very best option for you.

Warning About





You have probably seen the road signs that some buy here pay here car lots put up, advertising with the phrase, “We Finance Anyone”. What is the story behind this form of auto financing and is it something that you should consider?

First of all, these types of car lots don’t really provide car loans. They simply hold the title to the vehicle until you’ve made all of the payments. This sounds, good right? Well, it’s not quite so simple and if you don’t know what you’re doing, you can really get taken to the cleaners.

Buy here pay here car lots sell cars, and sell them again. It’s common that they’ll get a down payment for a vehicle, only to repossess it shortly thereafter if the buyer is just a few days late on their car payment. Is that something that you want to get involved with?

Interest rates are a sore spot with these types of dealers. You can expect to pay upwards of 25% on the “loan”. That’s worse than what many major credit card companies charge for cash advances. This doesn’t do anything to help the amount of your car payments, either.

In fact, buying a car at a dealership that promises “we finance anyone” auto credit, is one of the most expensive ways to buy a car. The down payments required, the price of the vehicles (well over retail) and the interest rates are simply a bad deal for you. You will do much better by looking at other options.

You may not be aware, but there are companies that work with people that have serious credit problems. Some of them are online and can offer you much better finance arrangements than can be found with buy here pay here car lots.





http://www.BuyingCarswithBadCredit.com can help you with legitimate auto lending. If you have bad credit, there are sources that are willing to help you to overcome the challenges that you are facing, while helping you to rebuild your credit with a good auto loan.

Jason Lanier, Expert Author.



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