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Why are so many homeowners underwater on their mortgages? In crafting programs to prevent foreclosures, policymakers have assumed that the primary reason homeowners owe more on their home than it is worth is that they bought at the top of the market. In other words, they’ve lost equity primarily through forces beyond their control. A new study challenges this premise and finds that excessive borrowing may have played as great a role. Michael LaCour-Little, a finance professor at California State University at Fullerton, looked at 4,000 foreclosures in Southern California from 2006-08. He found that, at least in Southern California,...

I like Joe. Really. I've talked to him before, and his mostly "gets it." That, in part, is why I left stunned with the lack of analysis on this piece: O.K., that’s a bit of an exaggeration. But I was reminded of that meeting on Thursday night when I was shown a letter that the administration had just sent out calling for yet another big meeting at Treasury with yet another sector of the financial industry. Signed by Treasury Secretary Timothy Geithner and Shaun Donovan, the housing and urban development secretary, the letter demanded that representatives from the top 25...

Homeowners taking part in the Obama administration's housing rescue program through Fannie Mae and Freddie Mac will now be eligible even if their loan-to-value ratio is up to 125 percent. That means they can have up to 25 percent negative equity and still get a refinance.The rule changes, part of the government's attempts to restore housing affordability and stem the foreclosure crisis, apply to loans backed up by Fannie Mae and Freddie Mac.Previously, homeowners could borrow up to 105 percent of their home's value. The new loan-to-value ratio is set up at 125 percent in a further effort to address...

As President Barack Obama on Thursday talked up the economic benefits from the wave of home refinancing sweeping the nation, a mortgage broker said he and First Lady Michelle Obama would likely do well to stand pat with the 30-year mortgage they have on their stately mansion in Chicago. *snip* The Obamas, however, do not need to worry about lowering their monthly expenses as much as most Americans, and their Washington housing is free. Back in Chicago, they have a mortgage locked in at 5.625 percent, compared with the current national average of about 4.87 for a standard home loan....

Buying a house felt like achieving the American dream, and the increasing equity helped a growing family make ends meet. But then the bottom fell out of the housing market. Rate this Article Click on one of the stars below to rate this article from 1 (lowest) to 5 (highest) Low Thank you for rating. High Average rating: 2.92 from 122 users E-mail us your comments on this article View all top-rated articles Article Tools * E-mail to a friend * Tools Index * Print-friendly version * Site Map * Article Index * Discuss in a Message Board * Digg...

HARTFORD, Conn. (AP) - Connecticut Sen. Chris Dodd says he'll refinance two mortgages that he received through a VIP program from Countrywide Financial Corp. ... The chairman of the Senate Banking Committee, Dodd says a third party will be involved in choosing the new bank.

<p>Federal regulators told Congress Thursday they're working on a plan that could help many distressed homeowners escape foreclosure in a global financial crisis that Federal Reserve Chairman Alan Greenspan warned will get worse before it gets better.</p> <p>Greenspan called the banking and housing chaos a "once-in-a-century credit tsunami" that led to a breakdown in how the free market system functions.</p>

I need some advice. I have a 20 fixed rate mortgage at 5.625%. The balance on the loan is $109,000. Does it make sense to refinance at 4.75% with a 10 year fixed? The closing costs would be $3000. Also, I currently add $500 to the principle payment every month, so I will have my existing loan paid off in 8 years.

I am considering refinancing my home mortgage and at the moment looking to do so through Quicken Loans. I was curious if anyone has refinanced through Quicken and if so did you consider it to be a good and fair deal? Thanks in advance.

THINKING OF REFINANCING your mortgage? Welcome to the club. With mortgage rates so low over the past few years, the question hasn't been "should you refinance?" but "when"? While conventional wisdom once said you had to shave at least 2% off your loan in order for refinancing to make sense, these days it could be worthwhile with an interest reduction of just 0.75%, says Doug Perry of Countrywide's consumer-markets division. That's because soaring home values, increased competition and automated underwriting (which can approve or reject your refi application in a matter of minutes) have made refinancing quicker, easier and potentially...

WASHINGTON (Reuters) - Interest rates on U.S. 30-year fixed rate mortgages plunged in the latest week after key Federal Reserve officials said inflation would not be a major factor for the economy in the near term, Freddie Mac said on Thursday. Freddie Mac, the No. 2 U.S. home mortgage financier, said interest rates on a 30-year fixed-rate mortgage, the most popular U.S. home loan, dropped to an average of 5.83 percent in the week ending Nov. 21 from 6.03 percent the previous week. Fifteen-year mortgage rates also fell to an average of 5.17 percent from 5.39 percent last week, while...

DALLAS (CBS.MW) -- Mirant Corp.'s shares rose nearly 20 percent Monday after the power producer said a majority of bondholders support an amended exchange offer, easing fears that the company would have to resort to bankruptcy. The shares jumped 40 cents, or 16 percent, to close at $2.90 on heavy volume of 20 million. Reaching a session high of $3, they reclaimed their highest level since June 2. That's the day that Atlanta-based Mirant (MIR), in an effort to avoid bankruptcy, said it would offer to exchange unsecured debt with secured bonds. Subsequently, holders of subsidiary Mirant Americas Generation's debt...

CUTTING RATES TO THE BONE Why Interest Rate Cuts Don't Always Work by Tom Adkins CommonConservative.com 05/16/03 Once again, Alan Greenspan raised interest rates to combat a nonexistent inflation boogieman. And once again, he's cutting those rates to fix the economy he devastated. And once again, it's not working. But why? Aren't rate cuts supposed to spur the economy into the stratosphere? Isn't Alan Greenspan and his Federal Reserve capable of breathing life into any dead economy? No. There are two words that prove this theory wrong: wealth creation. Let's regress a bit. During the first Bush administration, Greenspan jacked...

Refinance Wave Past Its Peak, But Far From Over Yet By Julie Haviv of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--Despite a dramatic drop in refinancing activity reported by the Mortgage Bankers Association Wednesday, market participants are not quite ready yet to call an end to the longest refinancing wave in history. The MBA's refinance index fell 10% to 5547 for the week ending April 11, hitting its lowest level since mid-February. The market had been expecting a decline, but at a slower pace. Refinancing activity is tied to mortgage rates, and those rates have steadily climbed over the past...

'Last piece of puzzle' secures finance packageReliant Resources and its bankers agreed Monday to a $6.2 billion financing package that should put to rest any bankruptcy fears surrounding the Houston power company. Mark Jacobs, Reliant's chief financial officer, called the package -- the vast majority which doesn't come due until 2007 -- a landmark transaction. "This is really the last step that we needed to take here to stabilize our capital structure," Jacobs said in an interview. "This is really the last piece of the puzzle." The company announced the package around 10 p.m. Monday. Last year, the main power...

Anxious Americans spurn ultra-low mortgage rates By Holden Lewis • Bankrate.com® Feeling anxious? If so, you aren't alone. Fewer people are applying for home loans, even though mortgage rates have reached a modern-day low. The benchmark 30-year fixed-rate mortgage fell 2 basis points to 5.94 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.39 discount and origination points. One year ago, the mortgage index was 6.92 percent. This is the lowest 30-year mortgage rate since March 1966, when...