Heard on the news today: We are on target to foreclose on 1 MILLION homes this year. That is 100,000 more than last year. (2009) It is estimated that it will take 3 years to clear the backlog of people defaulting on their loans.
According to the MSN Money Central report there are about 7.3 million homes in some state of delinquency.... the report also noted:
"Among states, Nevada posted the highest foreclosure rate in the first half of the year. One in every 17 households there received a foreclosure notice. However, foreclosures there are down 6 percent from a year earlier.
Arizona, Florida, California and Utah were next among states with the highest foreclosure rates. Rounding out the top 10 were Georgia, Michigan, Idaho, Illinois and Colorado."
There are new credit laws going into place which affect mortgages and also debit credit processing. Here a couple of highlights.
1) Now strict standards were in place during the years when underwriters started ignoring their own underwriting standards. They overvalued homes by 10% which added fuel to the fire of the housing market bubble.
NOW it is announced that there will be stricter standards and that better attention will be paid to income/payment ratios. One good thing will be better disclosures of what the maximum payment will be. Not just the interest, but the payment.
2) Merchants can now offer cash discounts for cash... Banking fees will be going up as free checking and cashback rewards disappear.
3) Banks will not be allowed to charge overdraft fees without your permission and agreement to do so. Sounds good especially if you were zapped by a bank that charges 8 bucks a day until the overdraft is resolved. I don't know how this new law will work out, but if banks handle it as they do other applications, they will simply make you agree in your contract, or you won't be able to get an account... What do you think?
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