St Louis Refinancing and Customer Financing News: Mortgages Up While Borrowing Up
St Louis Home Mortgage and Commercial Loans | Principal Reduction Program | 877-334-0210 or 314-334-0210 | Floyd Tapia, Commercial Mortgage, Consumer Lending and Loan Reduction

According to a report from the New York Federal Reserve which looks at mortgages, home equity lines, credit cards and auto loans by consumers nationwide, went on to conclude that total consumer debt increased slightly in the first quarter of 2011, ending a string of nine consecutive declining quarters. 

In addition, banks are becoming more willing to lend than in recent years, as there was an increase in credit limits, by about $30 billion or 1 percent which again was the first such gain since the third quarter of 2008. 

There were 368,000 new foreclosures during the quarter, a 17.7 percent decline from the fourth quarter of 2010, and new bankruptcies fell 13.3 percent during the quarter, to 434,000. 

Mortgage originations increased for a third consecutive quarter, to $499 billion.

That put new mortgages 65 percent above their low point at the end of 2008, and 31 percent above their level of a year ago. 

Total consumer indebtedness in the first quarter of 2011 was $11.5 trillion, still 8.2 percent below its peak at the end of September 2008, just after the collapse of Lehman Brothers and the seizing of financial markets. 

But showing that the current economy is not back on track as of yet is the fact that consumers and banks continue to cut back on credit cards.

The numbers show that approximately 195 million credit accounts were closed during the 12 months that ended March 31st, 2011 while just 166 million accounts were opened over the same period.

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St Louis Finance and Loan News: Credit Card Rates At All Time High
St Louis Home Mortgage and Commercial Loans | Principal Reduction Program | 877-334-0210 or 314-334-0210 | Floyd Tapia, Commercial Lending and Loan Modification Advocate

Current interest rates for credit cards are now hovering near record highs, at an average rate of 14.72 percent.

And if your credit is bad enough, you could even end up with a rate as high as 59.9 percent APR.

That’s because while the CARD Act helped crack down on certain fees and requires more disclosures, it didn’t cap every credit card holder’s worst enemy: interest rates.

The new rules prevent banks from raising most interest rates retroactively, but there’s no limit on the rates they can charge new customers, and that has the consequence of driving rates up for new customers.

“Rates are going up because card issuers know that once you get a card they can’t raise the rates, so they’re raising rates on the front end to ensure they get the revenue from that interest,” said Beverly Harzog, credit card expert at Credit.com.

Annual percentage rates have climbed more than 20 percent over the past two years and hit an all-time high of an average 14.78 percent in mid-November 2010.

This information was based on weekly data CreditCards.com collects from 100 of the nation’s top credit card issuers.

And there seems to be no end in sight.

While interest rate caps have been proposed which includes a proposal from New York Congressman Maurice Hinchey that would limit rates at 15 percent, as of yet, none have been passed into law.

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When applying for any type of St Louis mortgage or refinancing, call Liberty Lending Consultants, the recognized St Louis home loan and refinancing experts, at (314) 336-9111 and ask for Steve Swan or Doug Stahlschmidt.

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St Louis Finance News: There Is Less Demand For Mortgage Loans
News Press Hot Line: 314-334-0210 | Floyd Tapia

The Federal Reserve has recently reported that as of July, commercial banks have reversed their trend and have eased their lending standards. This was based upon a survey of loan officers at 77 participating banks.

Smaller banks or those with annual sales of less than $50 million actually tightened their standards for traditional home mortgage loans in the last three months while large banks having assets of more $20 billion widely left their standards unchanged, the Federal Reserve said.

Signaling that banks are continuing to crack down on the riskiest mortgages, less than half of the banks participating in the survey made sub-prime loans in the last three months.

In the latest Federal Reserve survey, many banks reported weaker demand across a broad range of loans, including mortgages, credit cards and business loans.

At the same time that banks tightened or left standards unchanged for mortgages, almost all the banks in the Federal Reserve survey reported easing standards on commercial and industrial loans over the last three months.

And while some smaller banks tightened their standards for approving credit cards, most large banks eased their standards in that very same category.

Banks cited a “less uncertain economic outlook” and increased competition from other banks, as reasons for easing their standards.

But these same banks went on to say that they don’t expect still-tight lending standards to return to their pre-recession averages any time in the “foreseeable future.”

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When applying for any type of St Louis mortgage, call Liberty Lending Consultants, the recognized St Louis home loan and refinancing experts, at 314-336-9111 and ask for Steve Swan or Doug Stahlschmidt and reference St Louis Refinancing Group.

For business owners looking for small business loans and alternative financing that works, call Floyd Tapia, host of the St. Louis “Mortgage Minute” at 314-334-0210. He is a successful hedge fund originator assisting local and national business owners in getting private and public St Louis finance and commercial lending with no upfront fees.

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St Louis Finance News: Consumer Credit Card Debt the Lowest in 8 Years
News Press Hot Line: 314-334-0210 | Floyd Tapia

Today in financial news, the average combined debt for bank-issued credit cards like those with a MasterCard or Visa logo fell to $4,951 in the three months ended June 30, down more than 13 percent from $5,719 in the same period a year ago, according to TransUnion.

The credit reporting agency said it was the first three-month period during which credit card debt fell below $5,000 since the first quarter of 2002.

The good news is, more borrowers also made payments on time. The rate of cardholders past due by 90 days or more fell to 0.92 percent in the second quarter, from 1.17 percent last year.

“That’s the first time the delinquency rate has been below 1 percent since the second quarter of 2007, before the recession,” said Ezra Becker, director of consulting and strategy in TransUnion’s financial services unit.

The rate fluctuates during the year, he said, but the improvement is more evidence that consumers are working to make sure their credit cards remain in good standing.

Becker said “the foreclosure crisis could be helping to improve the timeliness of credit card payments and lower balances. When people don’t make mortgage payments, he suggested, they have a short-term cash boost. That can provide extra money to pay down credit cards,” he said.

Besides paying down debt, consumers are getting fewer new cards. Nationwide, the number of new accounts opened dropped almost 6.5 percent from last year.

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When applying for any type of St Louis mortgage, call Liberty Lending Consultants, the recognized St Louis home loan and refinancing experts, at 877-334-0210 and ask for Steve Swan or Doug Stahlschmidt.

For business owners looking for small business loans and alternative financing that works, call Floyd Tapia, host of the St. Louis “Mortgage Minute” at 314-334-0210. He is a successful hedge fund originator assisting local and national business owners in getting private and public St Louis finance and commercial lending with no upfront fees.

Sponsored by:

Check back daily for more financial news.

St Louis Finance News: Consumers Need To Know The 3 Tips That Will Mess Up Your Mortgage Closing [News Hot Line: 877-334-0210 | Floyd Tapia]

You have found the home you always wanted. You sign a contract and then proceed to secure your lending.  Everything seems to be going smoothly until you get to the closing table.  You find out that it has been delayed and your frustrated.  Why has this happened to you and so many others?

In many cases, you may have changed your “borrower circumstances” between the day you applied for that St Louis home loan and the day you were suppose to close.

Due to the mortgage fiasco that has put this country into a deep recession, banks and mortgage lenders have gotten stricter as for as their requirements for lending.

Fannie Mae has been no exception to this rule.  This mortgage behemoth’s ‘Loan Quality Initiative,’ which went into effect June 1, requires all lenders to closely follow “changes in borrower circumstances” between the time of the initial application and closing.

Although this is nothing new in the mortgage arena, Fannie Mae has and will be enforcing them more vigorously.  For consumers, it could very well mean delays that could otherwise screw up a perfect mortgage closing.

David Adamo, CEO of Luxury Mortgage of Stamford says:  “Any change in circumstance could affect and delay a borrower’s closing on a transaction.”

So, here are 3 areas where a borrower could really mess up their current or next home mortgage closing:

1.  Maxing out your credit cards

When you are waiting to close on your new home, leave the credit cards at home.  Going out and charging up credit cards is another guaranteed way of messing up your smooth closing.  Consider paying cash until everything is finished with your mortgage closing.

The obvious reason for this road block is that St Louis home mortgage loan approvals are based on debt-to-income ratios.  This means that all lenders look at the consumer’s debt payments and then compares this amount to their income.  If the debt ratio is too high, you may be turned down for a loan you originally qualified for.

Once again, Fannie Mae strongly encourages  lenders to recalculate debt-to-income ratios right before closing.  Keep in mind that it is getting tougher for many to even get a new home loan so why ruin what could be a day of celebration.

So as many St Louis finance experts will tell you, be patient and wait to buy those new appliances or electronics for that new home.

2.  Applying for or getting a new credit card or auto loan

If you really want to ruin your chances of a smooth mortgage closing, simply go out and make one of the biggest and unintelligent mistakes many borrowers make and that is getting a new credit card or auto loan especially without discussing this with your loan officer or banker.

Not only is this a sign of disrespect to the lender trying to make your loan go smoothly, it is the kiss of death as far as financing is concerned.  So, do not even think of doing this!

Here’s what happens:  A consumer gets a new car loan before closing.  The current lender who is working on your loan packet doesn’t know.  You miss a couple of home loan payments because of this new debt.

Fannie Mae will certainly go over past documents and when they discover the undisclosed auto loan, the lender who made the loan will have to buy it back as a bad mortgage and thus lose money.

That will no longer happen.  They will at the last minute do a new credit check and turn you down due to your financial negligence.  This also applies to a new credit card whether or not you use it.

3.  Changing your employment

It doesn’t matter if you hate your employer or can make more money at a new job, don’t do it!  This action will most certainly derail your new home loan before you every get to the closing table.

Also, don’t change how you are paid.  That means don’t go from a salaried position to a commission with huge bonuses.  Do this after you close on your home.

In fact, Bob Walters, chief economist for Quicken Loans puts it succinctly well:  “Because the rules about any job change, especially if you go to commission or bonus, usually you need a two-year history.  So if all of a sudden you switch from W-2 to some other kind of compensation, and you don’t have the history, a lot of times that income can’t be included… maybe now you don’t qualify.”

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When applying for any type of St Louis mortgage, call Liberty Lending Consultants, the recognized St Louis home loan and refinancing experts, at 877-334-0210 and ask for Steve Swan or Doug Stahlschmidt.

For business owners looking for small business loans and alternative financing that works, call Floyd Tapia, host of the St. Louis “Mortgage Minute” at 314-334-0210. He is a successful hedge fund originator assisting local and national business owners in getting private and public St Louis finance and commercial lending with no upfront fees.

Sponsored by:

Check back daily for more financial news.

St Louis Mortgage Refinancing and Real Estate News –

News: Mortgage Defaults Seem To Be Driving Consumer Spending

The country’s foreclosure database has reached record highs.  In addition, the percentage of new defaulted home loans also remain at a five-year high.

The approximate overall number of past due first-lien mortgages and REO properties is now surpassing 7.9 million mortgage loans.

And the problem is not getting any better.  In fact, the percentage of new problem St Louis home loans is also at its highest level in five years.

Now all of us have been hearing how bad the housing market is so what if 7.9 million Americans are not paying their mortgages.

So, what?  Let us consider the serious implications and the fraudulent irresponsibility that many of these dishonest homeowners are displaying.

Statistically speaking, consumers are currently more likely to pay their unsecured bills before their mortgage payment which is a far deviation from what past history as shown.

These unsecured bills would include credit cards, cable bills, car loans in place of their home loans and in many cases paying the bill completely off.

Paul Jackson, publisher of Housingwire.com, describes an older record of 7.4 million delinquent loans.  He cites a case study of someone who applied for the government’s Home Affordable Modification Program (HAMP).

This homeowner had an $1,880.00 monthly mortgage payment on which they had defaulted.

What was  interesting is that this person’s monthly bank statement showed payments made to frivolous expense items such as a tanning salon, nail spa, liquor stores and DirecTV bill with premium charges.

And that’s not all.  There were additional payments in the totaling $1700.00 in retail purchases from retail stores like The Gap, Old Navy, Home Depot, Sears and many more.

Mr. Jackson goes on to make a startling point.  If one were to assume that just half of the current 7.4 million currently delinquent mortgages fit this sort of frivolous spending profile which is in essence their mortgage payment and that median payment was $1,000 for most U.S. homeowners, you would get a $3.7 billion boost per month  in total consumer spending.

Some would say that this boost in consumer spending is actually good for our economy.   But is that how depraved our society’s way of thinking has become as far as financial responsibility?

Most would agree that it’s certainly enough spending to matter in the overall scheme of things.

Especially when you take into consideration that further studies have shown that borrowers who know family members or friends who have defaulted on their mortgages are more apt to default on their own St Louis home loan.

And that shocking number is growing at a phenomenal rate each day.  Cynics are saying that this foolish and borderline criminal irresponsibility is just another, innovative way of using their home as an ATM.

The deplorable thing is that it can take well over a year, in some cases nearly two years, to go from missing a St Louis mortgage payment to being thrown out of your home.

Although the St Louis Refinancing Group news team does not completely lump all homeowners into this immoral class of people who feel debt avoidance or mortgage fraud is a constitutional right, still something has to be done to stop this terrible grievance.

Maybe that’s the next critical step the government needs to contemplate.  Perhaps  setting strict limits even prohibitions on what bills can and cannot be paid when seeking federal bailouts to prevent this frivolous spending of one’s home loan payment.

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When applying for a St Louis mortgage or to discuss your St Louis home loan options, call the recognized St Louis home loan experts, at 877-334-0210 or 314-334-0210 and ask for Steve Swan, Doug Stahlschmidt or syndicated columnist Floyd Tapia, the host of the St. Louis Refinancing “Mortgage Minute.”

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Check back daily for more financial news.