| Defaults moving beyond sub-prime
Thought the mortgage meltdown was just a sub-prime affair? Think again. There's another time bomb waiting to explode, experts say: risky loans made to people with good credit.
So-called pay-option adjustable-rate mortgages, or option ARMs, were the easiest and most profitable home loans for lenders and brokers to make for much of this decade. Last year, they accounted for about 9% of the volume of all mortgages made in the U.S. and were especially popular in California, Florida and Nevada -- states where home prices rose the most during the housing boom and are now falling most sharply.
An option ARM loan gives a borrower the option of paying less than the interest due, causing the loan balance to rise. If it rises too much -- say, by 10% or 15% -- the opportunity to make a low payment vanishes and the required payment skyrockets.
Overcrowding plagues NFL pregame shows
THE SPORTS GAL'S PICKS The Sports Gal refused to rant again this week in protest of the fact "nobody made it clear to me that having two kids would suck this much." She's about two weeks away from being wheeled out of the house in a gurney like Britney. Fortunately, she did find time to make her Round 2 picks: Seahawks +7.5; Pats -13; Colts -8.5; Giants +7.5.
Playoffs: 2-1-1
Reg. Season: 136-111-9 .
Editorial: Grouper
Is it worth the time, effort and expense of state investigators to check restaurants to determine whether they are selling real or fake grouper? Yes. When you consider a grouper sandwich is part of the Florida experience for so many visitors — not to mention year-round residents — and that restaurants that do choose to be honest are put at a financial disadvantage by those who cheat, it is well worth the while of the Florida Department of Business and Professional Regulation. Perhaps a fine for consumer fraud should be raised from today's $500 for a first-time offense. With some fake grouper wholesaling for about one-fourth of the $11 a pound reportedly paid by one restaurant for the real thing, a stronger financial disincentive may help do the trick. Other victims of the fraud include fishermen and wholesalers.
Homeowners not only ones trying to stay afloat in crisis
But through the years, lenders occasionally relaxed standards to such a degree that billions of dollars were risked on shaky loans, triggering an eventual collapse. The savings and loan debacle of the late 1980s proved one such episode, which devastated commercial real estate markets. This time around, the slack standards allowed millions of high-risk borrowers to get easy home mortgages. When this so-called subprime market collapsed beginning about a year ago, ordinary working people bore the brunt. By some estimates, nearly 2 million U.S. residents will lose their homes to foreclosure this year, with more foreclosures coming in 2008 as low-rate adjustable mortgages reset to higher and less affordable rates. But the damage from the credit crunch, while concentrated in the subprime mortgage market, has spread far beyond it.
Coventry unveils barrage of new mortgage products
Coventry Intermediaries has launched a range of new mortgages which include a variable product and two trackers. The new Offset mortgage range also includes a 5.49 per cent fixed-rate deal which runs until March 31st 2010 and is being hailed by the provider as "highly competitive". Meanwhile the variable "Flexx" product and the tracker mortgages have been introduced as part of Coventry's standard residential range. Among the two fixed-rate deals is a 5.89 per cent deal which runs until March 31st 2013, it has a loan to value (LTV) of up 95 per cent and includes no booking or arrangement fee and free valuation. Early repayment charges (ERCs) stand at four per cent of the balance repaid until March 31st 2013. The Flexx mortgage has a current applied rate of 6.10 per cent, has an LTV of 95 per cent and comes with a booking fee of £199 and an £800 arrangement fee.
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