Welcome to Mortgage Guide
Country Wide Mortgage Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Why Some People Take Out a Second Mortgage
from: Mortage & Debt FactsThe term “second mortgage” is easier to understand than home equity loan, but they are essentially the same.
A second mortgage is any new loan, beyond the primary mortgage, taken out holding the home as the collateral for the loan. While, you can use a home equity loan to get money out of your home while still living in it, there are also other uses for second mortgages that are not tied to a home equity loan.
There are different situations and times when people may try to get a second mortgage to save money or to tap money in equity.
Two Mortgages at Closing
Some people took out second mortgages during the closing of their first mortgage as a piggyback mortgage. This allowed them to put down the needed 20% as a down payment and avoid private mortgage insurance (PMI) costs.
This works out well for buyers who have this type of access to credit but are low on down payment funds. If they only had 5 or 10% to put down, the PMI would automatically be triggered and added to their monthly payment.
However, if they took out two loans and used the second to bring down the primary mortgage’s loan-to-value ratio then they wouldn’t have to pay PMI.
The difference in monthly payment is not that significant using this strategy, but there are other paybacks – including the ability to deduct the second mortgage’s payments from your taxes, in some cases.
PMI, on the other hand, gives you no such tax benefits. Equity also accrues faster by taking out two mortgages upon closing to satisfy the PMI requirements.
The problem with this approach is that lenders are becoming wary of allowing someone to immediately take out a piggyback mortgage to bring up the loan-to-value ration of the first mortgage. If the home approaches foreclosure, the second mortgagee holder finds themselves in the position of absorbing a loss or having to buy the primary mortgage to get something out of the foreclosure on the piggyback mortgage. So, this type of financial two-step may end up being harder and harder to get approved by lenders.
Home Equity Loan
The other type of second mortgage strategy is to get a home equity loan after closing. This can be done any time, as long as the value of your home and your equity in it is enough to support the loan.
There are risks for the borrower as the home is being used as collateral. If the home equity loan terms are not satisfied or payments are not made, the lender can foreclose even though it is not the primary mortgage. So, this type of financial tool should be taken on only after carefully reviewing the risks and benefits of a home equity loan.
Country Wide Mortgage Specific links
Country Wide Mortgage News
AIG Can't Pursue Some Countrywide Claims in $10 Billion Case - Bloomberg
AIG Can't Pursue Some Countrywide Claims in $10 Billion Case Bloomberg s Countrywide unit that are part of a lawsuit over $10 billion in losses related to residential mortgage-backed securities, a judge said. US District Judge Mariana Pfaelzer in Los Angeles today dismissed AIG's securities-law claims as untimely because ... AIG Claims Pared In $10.5B Countrywide RMBS Suit |
Freddie Forces BofA to Buy Back Mortgages - Wall Street Journal
 Providence Business News | Freddie Forces BofA to Buy Back Mortgages Wall Street Journal In February, Fannie didn't renew an agreement that covers its purchases of mortgages from Bank of America, effectively cutting off a lender that had become its top client following the Charlotte, NC, company's acquisition of Countrywide Financial in ... BofA to Buy Back $330 Million of Mortgages From Freddie Mac |
Fannie Refused to Punish Countrywide for Bad Debt, Lockhart Says - Bloomberg
 Bloomberg | Fannie Refused to Punish Countrywide for Bad Debt, Lockhart Says Bloomberg Fannie Mae refused to seek large amounts of mortgage repurchases from Countrywide Financial Corp. as housing began to crash, according to the former head of its regulator. James Lockhart, who led the Federal Housing Finance Agency until 2009 and its ... Judge to banks: no limits on Fannie/Freddie MBS securities cases Mortgage Reductions Crucial to Economic Recovery |
Judge dismisses parts of IndyMac fraud case - Los Angeles Times
Judge dismisses parts of IndyMac fraud case Los Angeles Times Before it failed in July 2008, IndyMac, a Countrywide spinoff, had become the nation's largest issuer of so-called alt-A mortgages — risky home loans mostly based on borrowers' simple statements of their income rather than on tax returns. |
Real Estate Today's Home Loan Requirements - Salt Lake City Weekly
Real Estate Today's Home Loan Requirements Salt Lake City Weekly ... on giving out home loans and refinances. Granted, there are fewer lenders these days (thank heavens) because so many of the crooks closed their doors or were forced to close during and after the crash. Remember Countrywide or Washington Mutual? |