St Louis Loan, Mortgage Refinancing and Consumer Lending News: Drowning In Negative Equity
St Louis Home Mortgage and Commercial Loans | Principal Reduction Program | 877-334-0210 or 314-334-0210 | Floyd Tapia, Commercial Lending, Loan Reduction and Customer Financing

If you have no desire or need to sell your home, then falling home prices are just on paper and likely temporary, right? Depends on how you look at it. 

Falling home prices put more borrowers in a negative equity position, that is owing more on their mortgage(s) than their homes are worth.

We call that ‘underwater,’ and for good reason, because for some borrowers that sense of drowning in debt has profound implications.

Today Zillow.com reported a new high in negative equity: 28.4 percent of single family homes with a mortgage (remember, 32 percent of all homeowners do not have a mortgage). 

That’s a national average, but the numbers are far worse in some of the nation’s big metros.

Atlanta, for example, has a 55.7 percent negative equity rate. Denver, 41 percent, Chicago nearly 46 percent.

This is on top of all the foreclosure hot spots like Phoenix, where close to three quarters of all borrowers are underwater.

“Higher rates of negative equity are creating a lot of latent vulnerability in the housing stock, where if the household then encounters some economic shock, like the loss of a job or divorce or death, then that household is much, much more likely to go into foreclosure,” notes Zillow’s Stan Humphries.

He continues: “So it just means that higher rates of negative equity, we’re going to see elevated rates of foreclosure for the next two to three years.”

But higher rates of foreclosure put increasing pressure on home prices, causing them to fall further, which in turn puts even more borrowers underwater.

One begets the other begets the other.

Humphries thinks this is a bigger deal than the ‘walkaway’ issue (or strategic default); that’s where borrowers see no chance of ever having equity in their homes, so they walk away rather than becoming permanent pseudo-renters, responsible for the high cost of the home’s upkeep but reaping no equity benefit. 

“The best research that’s been done right now seems to suggest that negative equity impact on strategic defaults really kicks in at very high rates of value to loan ratio, so that means when people are more like 30-40 percent underwater does it start to create proactive behavior where they want to walk away from the mortgage. And even at those rates of loan to values, you’re still seeing strategic defaults be a relative…not a majority behavior,” says Humphries.

Well there are certainly plenty of large metro markets, as I cited previously, where negative equity is that high.

And here’s a little more food for thought: What about mobility?

As the economy improves, and we see those jobs numbers rise, as we did last Friday, we have to consider the fact that many people taking these jobs may be required to move for said jobs.

Those same borrowers may not be able to take the loss on the home that’s required to sell it. What then? 

What is the fate of the nation’s credit quality. It’s already tough enough to get a good mortgage when you have good credit.

Home buyer confidence and demand are the only remedies right now for the housing and foreclosure crisis. Sadly, we have neither.

Contributions By Olick

We appreciate your visit… how about liking us on Facebook for this St Louis mortgage and customer finance article?

=============================================

Articles and Sponsors

Business Owners and Medical Groups: You can now offer customer financing and consumer finance programs to your customers and patients. We are the lender and have approximately $2.7 Billion dollars to loan. Best of all, there is NO risk, NO recourse and NO new equipment to lease. Once your consumer is approved, your money is in your bank within 48 to 72 hours. Turn your credit declines into cash by calling Floyd Tapia at (314) 627-5729.

In addition, if you need commercial financing or a merchant account company that will save you money, Floyd Tapia and his lending and new business resources team can focus on bringing you innovative private lending solutions and financial services to meet all types of financing needs. Let us turn your challenges into closings (or from being underwater equity wise) and help you get a St Louis commercial lending, mortgage or financing loan.

Check back daily for more financial news.

============================================

St Louis Beauty Supply and Avon – Kristin Tapia

St Louis Mobile Coupons and Mobile Marketing

St Louis Magic and Birthday Parties – Josh Routh, Circus Kaput

To “read” the boxy black-and-white bar code above, you’ll need a smartphone. If you need a reader APP, you can => Download a QR code APP reader here for your smartphone.

St Louis Home Loan and Consumer Lending News: Boehner Takes A Hard Line On Debt
St Louis Home Mortgage and Commercial Loans | In-House Financing | 877-334-0210 or 314-334-0210 | Floyd Tapia, Commercial Lending, Customer Financing and Principal Loan Reduction

House Speaker John Boehner recently indicated that he plans to hold a hard line in debt-ceiling negotiations. Among his demands: Spending cuts in exchange for support to raise the debt ceiling and the cuts will have to be greater in magnitude than the ceiling increase. 

“Without significant spending cuts and the way we spend Americans’ money, there will be no debt limit increase.
And the cuts should be greater than the accompanying increase in debt authority the president is given,” Boehner said in a speech at the Economic Club of New York. 

Boehner reiterated his stance that the spending cuts should be in the “trillions, not just billions” and that simply agreeing to spending and deficit goals for the future won’t suffice.

Boehner continues: “They should be actual cuts and real reforms to these programs, not broad deficit or debt targets that punt the tough questions to the future. And with the exception of tax hikes which in my opinion will destroy jobs, everything should be on the table.” 

It’s unclear just how many trillions in spending cuts Boehner is seeking.

But he may be laying down a marker of more than $2 trillion, since congressional sources tell CNN they expect the
House could vote to increase the debt ceiling by about $2 trillion. 

Treasury Secretary Tim Geithner has said he expects U.S. borrowing to have hit the debt ceiling by May 16th, but he estimates he can use “extraordinary measures” to keep the United States out of default until August 2, 2011. 

After that, however, the United States will only be allowed to spend what it takes in from federal revenue.

That means, on average, the country will come up short by about $118 billion a month. At that point, Geithner will have to pick and choose which bills to pay.

Several conservative lawmakers say the country won’t be in default on its obligations as long as it continues to pay the
interest owed on U.S. debt. 

But Geithner believes any failure to meet a legal obligation will be perceived as a default by the markets, with punishing long-term consequences for the U.S. economy. 

Boehner, who in the past has indicated that the debt ceiling has to be raised no matter what, suggested that
worse things could happen. 

Boehner concludes: “It’s true that allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process.”

We appreciate your visit… how about liking us on Facebook for this St Louis mortgage and customer finance article?

=============================================

Articles and Sponsors

Business Owners and Medical Groups: You can now offer customer financing and consumer finance programs to your customers and patients. We are the lender and have approximately $2.7 Billion dollars to loan. Best of all, there is NO risk, NO recourse and NO new equipment to lease for your and your company or medical group. Once your customer is approved, your money is in your bank account within 48 to 72 hours. Turn your credit declines into cash by calling Floyd Tapia at (314) 627-5729.

In addition, if you need commercial financing or a merchant account company that will save you money, Floyd Tapia and his lending and new business resources team can focus on bringing you innovative private lending solutions and financial services to meet all types of financing needs. Let us turn your challenges into closings (or from being underwater equity wise) and help you get a St Louis commercial lending, mortgage or financing loan.

Check back daily for more financial news.

============================================

St Louis Beauty Supply and Avon – Kristin Tapia

St Louis Mobile Coupons and Mobile Marketing

St Louis Magic and Birthday Parties – Josh Routh, Circus Kaput

To “read” the boxy black-and-white bar code above, you’ll need a smartphone. If you need a reader APP, you can => Download a QR code APP reader here for your smartphone.

St Louis Home Loan Mortgage and Consumer Lending News: U.S. Credit Rating Outlook Lowered
St Louis Home Mortgage and Commercial Loans | Principal Reduction Program | 877-334-0210 or 314-334-0210 | Floyd Tapia, St. Louis Commercial Lending, Customer Financing and Loan Reduction

The S&P maintained its ‘AAA/A-1+’ credit rating on U.S. sovereign debt, saying the nation’s “highly diversified” economy and “effective monetary policies” have helped support growth.

But the agency lowered its outlook for America’s long-term credit rating to “negative” from “stable,” based on the uncertain political debate around the nation’s fiscal problems.

The outlook means that there is one-in-three likelihood that it could lower the long-term rating on the United States within two years.

The S&P went on to say that “the outlook reflects our view of the increased risk that the political negotiations over when and how to address both the medium- and long-term fiscal challenges will persist until at least after national elections in 2012.”

On top of that, the IMF said the U.S. budget deficit was on course to hit 10.8 percent of nation’s economic output this year, tying with Ireland for the highest deficit-to-GDP ratio among advanced economies.

It urged Washington to move quickly to put a credible plan in place to tighten its belt.

While most of the criticism came from emerging market economies, some advanced nations joined the chorus.

Dutch Finance Minister Jan Kees de Jager warned that if the United States and other advanced nations move too slowly it could undermine confidence in the global economy.

Brazil’s finance minister, Guido Mantega, offered sharp words in a thinly veiled attack on the United States.

“Ironically, some of the countries that are responsible for the deepest crisis since the Great Depression, and have yet to solve their own problems, are eager to prescribe codes of conduct to the rest of the world,” he said.

The Group of 20 countries agreed to a plan that could put more pressure on the United States to fix its deficits as well as push other leading economies to address their own shortcomings.

We appreciate your visit… how about liking us on Facebook for this St Louis mortgage and customer finance article?

=============================================

Articles and Sponsors

Business Owners and Medical Groups: You can now offer customer financing and consumer finance programs to your customers and patients. We are the lender and have approximately $2.7 Billion dollars to loan. Best of all, there is NO risk, NO recourse and NO new equipment to lease. Once your consumer is approved, your money is in your bank within 48 to 72 hours. Turn your credit declines into cash by calling Floyd Tapia at (314) 627-5729.

In addition, if you need commercial financing or a merchant account company that will save you money, Floyd Tapia and his lending and new business resources team can focus on bringing you innovative private lending solutions and financial services to meet all types of financing needs. Let us turn your challenges into closings (or from being underwater equity wise) and help you get a St Louis commercial lending, mortgage or financing loan.

Check back daily for more financial news.

============================================

St Louis Beauty Supply and Avon – Kristin Tapia

St Louis Mobile Coupons and Mobile Marketing

St Louis Magic and Birthday Parties – Josh Routh, Circus Kaput

To “read” the boxy black-and-white bar code above, you’ll need a smartphone. If you need a reader APP, you can => Download a QR code APP reader here for your smartphone.

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.

==================================================

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: Major Economic Loss Suffered By 20 Percent Of Americans [News Hot Line: 314-334-0210 | Floyd Tapia]

The plight of Americans seems to be sinking at an all time high. It has been estimated that approximately 20 percent of consumers have suffered a significant economic loss for 2009.

This is being called the highest level in the last 25 years as reported by the new Economic Security Index (ESI) which was constructed by Yale political scientist Jacob Hacker and his team of researchers.

The ESI takes into consideration the interaction of three key variables that have a direct bearing on a person’s economic security which includes income loss, overall debt and medical expenses.

It also goes on to define people as economically insecure when their situation meets the following two criteria.

The first one covers the loss of 25 percent or more of their available gross income within a year’s time which can be defined as the money a person has left over after paying for all their medical costs and debt.

The second criteria is when a person does not have enough in an emergency fund or has no access to any other liquid (cash) reserves to make up the actual difference.

If we were to go back in time according to this index when Americans were economically insecure, the Census Bureau data would take us back to 1985 when the ESI percentage was about 12.2 percent.

It was believed that by 2009, this ESI number would probably be around 20.4  percent as predicted by Hacker and his team.

But the actual number of people affected increased by more than half, from 28 million in 1985 to roughly 46 million by 2007.

Whether or not the number has been predicted accurately is no longer the point of this news report.

Instead, it tells the story that Americans are not yet optimistic about this economy nor are they going to jump into any type of large investment such as buying a home any time soon.

==================================================

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.

Check back daily for more financial news.

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… Rank: wait… Traffic: wait… Price: wait… C: wait…

News: Consumers Drowning In Debt With 1 in 4 Mortgages Underwater

Financial research firm First American CoreLogic confirmed that nearly 23% of Americans with mortgages owe more than what their home is worth.

Estimates put that alarming total at 10.7 million U.S. mortgages, or almost 1 in 4 with another 2.3 million homeowners within 5% of negative territory.

Further reports have it that home prices have fallen so far that currently 5.3 million U.S. households are tied to mortgages at least 20% higher than their home’s value.

More than 520,000 of these troubled borrowers have received a notice of default, according to First American.

While most U.S. homeowners still have some equity in their home, an astounding 24 million owner-occupied homes don’t have any mortgage at all, according to the Census Bureau.

The majority of underwater mortgages are heavily concentrated in five states that have particularly suffered from the housing bust namely:  Nevada, at 65%;  Arizona, at 48%;  Florida, at 45%;  Michigan, at 37%;  and California, at 35%.

Negative equity, which most people know as being  “underwater” or having an “upside down” mortgage, has become commonplace even in St. Louis as home values plummet.

Mortgage analysts and bank servicers are closely watching these staggering numbers because borrowers who are underwater are more likely to be foreclosed upon.

The five states mentioned previously have been hit especially hard because of a high rate of prime loans that went bad.

Some of those home loans were option-adjustable rate mortgages, and when the accumulated debt reaches a certain point, usually 10% to 25% more than the original principal, the option-ARMs loans are adjusted into fixed-rate mortgages.

When that happens, many borrowers simply cannot afford the new mortgage payments.

And although the economy has been further burdened with hundreds of thousands of job losses, mortgage troubles are no longer restricted to the unemployed.

Approximately 588,000 borrowers defaulted on mortgages last year even though they could afford to pay.  This is more than double the number in 2007, according to a study by Experian and consulting firm Oliver Wyman.

“The American consumer has had a long-held taboo against walking away from the home, and this crisis seems to be eroding that,” the study said.

It is no surprise that in many cases the homeowner knowingly took a loan they marginally qualified for and only made matters worse by walking into this home with no down payment.

But now the question being raised is…

Should homeowners who in no way contributed to this great financial collapse be further obligated to ante up untold millions of dollars in taxes to solve a problem created by these irresponsible consumers and banking giants?

The St. Louis Refinancing Group mortgage news team will continue to follow these pressing news breaking events.

Sponsored by:

Check back daily for more financial news.

| Promote Your Page Too

Here’s more information on adjustable rate mortgages…

Welcome to the 3rd edition of the St. Louis Refinancing Group Mortgage Minute.

News Topic:  A smart way to tame your debt -  If you’re in debt, you must stop charging and live within your means says Bruce McClary, a well -known credit counselor…

| Promote Your Page Too