Mortgage

Intelligent Buyers Should Be Focused on Rates
Written by Jonathan Smoke   
09.08.2008
While debates rage on when we will find the bottom in home prices declines, intelligent buyers who’ve been waiting on the sidelines should be paying attention to mortgage rates as well. Beyond credit quality and the type and length of loans, two factors influence how consumers buy a home—the price of that home and the interest rate of the mortgage.

The price of the home and the interest rate of the mortgage each have a significant impact on the monthly payment, so assuming would-be buyers are trying to time the bottom on when to purchase a home, ignoring what is happening to interest rates and where they are likely headed could lead to regrets.
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Are We Nearing a Top in Foreclosure Activity?
Written by Jonathan Smoke   
07.10.2008

The ForeclosurePulse blog from the folks at RealtyTrac has a great post today about the release of their June data. The June data showed that U.S. foreclosure activity in June decreased 3 percent from May but was still up 53 percent from the prior year. The blog post nicely raised the question if this is a sign of a top or not.

The argument against this being a top is that the year-over-year comparison still shows foreclosures much higher. Moreover, there have been several months during the last two years that month-over-month activity registered declines.
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New Research Sheds More Light on Subprime’s Impact
Written by Jonathan Smoke   
12.04.2007

The lead article on the front page of yesterday’s Wall Street Journal debunked the misconception that only those with poor or limited credit hold subprime mortgages. Whether people wanted the convenience of avoiding documenting income or made decisions based on aggressive and potentially fraudulent -- or at least unethical -- mortgage brokering, a large number of people who could have had prime mortgages ended up in subprime mortgages during this decade.
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Mortgage Mess Driven by Local Issues
Written by Jonathan Smoke   
09.07.2007

What are the three most important words in real estate? Location, location, location. I try regularly to illustrate the economics behind that bit of wisdom that was passed on to me early in my career.

That’s why I was surprised to see a post from Maya Roney at Business Week on the Hot Property blog entitled “Real Estate Is Not All Local.” Roney’s thesis appears to be that the mortgage problems are national so the impact to home sales is in part national.
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In Search of the Bad Loans and the Lenders Behind Them
Written by Jonathan Smoke   
08.22.2007
A new study released this week by SMR Research presented some fairly compelling evidence that there are indeed huge differences in the credit risk of the loan portfolios of the nation’s largest lenders.

In “The Mortgage Credit Crisis,” Stuart Feldstein and his colleagues present the model they developed to identify credit risk and the results of applying that model to “very large samplings” of each lender’s loans.
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