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By Roland Lorans | Agent in Dacula, GA
  • Mortgage Loan Products Around the World - Is the World Becoming One Big Foreclosure or Short Sale?

    Posted Under: Home Buying in Hoschton, Home Selling in Hoschton, Property Q&A in Hoschton  |  September 29, 2010 4:41 AM  |  738 views  |  No comments
    Trilogy Park Hoschton and Hamilton Mill Dacula Ga Home Update - Press Release -

    Variety of Alternative Mortgage Loan Products Around the World

    According to a study released today by the Mortgage Bankers Association (MBA), mortgage features like longer terms, interest-only periods and flexible payment designs are quite common in other countries and are not associated with higher rates of default.  The study entitled, “International Comparison of Mortgage Product Offerings”, which was conducted by Dr. Michael Lea, Director of the Corky McMillin Center for Real Estate at San Diego State University and sponsored by MBA’s Research Institute for Housing America (RIHA), examines the predominant mortgage designs and characteristics that exist in different international markets and how they have performed prior to and during the crisis.

    The study examined 12 developed countries with distinctly different mortgage market and product configurations.  The study results showed that 95% of new loans made in the U.S. in 2009 were long-term fixed-rate products compared to various other countries with a lower share including 1% in Spain, 2% in Korea, 10% in Canada, 19% in the Netherlands and 22% in Japan. In addition, 5% of new loans made in the U.S. in 2009 were variable rate, which compares to the higher shares found in other countries including, 92% in Australia and Korea, 91% in Ireland, 47% in the UK and 38% in Japan. Key findings:

    - of the countries sampled, all typically subject fixed rate mortgages to an early repayment penalty except Denmark, Japan and the U.S.  In Australia, Canada, Denmark, Germany, the Netherlands and Switzerland the penalties are designed to compensate the lender for lost interest over the remaining term of the fixed rate.

    - while some believe that the fixed-rate mortgage (FRM) is the ideal consumer mortgage instrument for all borrowers, its use does have significant drawbacks. In effect, the cost of the pre-payment option is socialized, with everyone paying a premium in the mortgage rate for the option. This contrasts with the European view that only borrowers who exercise the option for financial advantage should pay the cost.

    - the U.S. has an unusually high proportion of long-term FRMs as well as use of securitization in the finance of housing. The dominance of the FRM and securitization is driven in part by the presence of government-backed secondary mortgage market institutions that lower the relative price of this type of mortgage.

    - the U.S. is unusual in the banning or restriction of prepayment penalties on FRMs. Most countries in the survey allow such penalties to compensate lenders for loss associated with the financing of mortgages. As a result, mortgage rates in those countries do not include a significant pre-payment option premium and other financing techniques, such as covered bonds, are more common.

    - according to an EMF study on the efficiency of mortgage collateral, borrowers remain liable for deficiencies in Belgium, Germany, Greece, the Netherlands, Spain, France, Ireland, Portugal and the U.K.

    I'll show you how to short sale your property and never pay the bank another penny.
    My TEAM and I will Help show you how to Find a great Short Sale property and get a FREE Short Sale Foreclosure or Short Sale House List….

    Send me an e-mail at rlorans@gmail.com. I will contact you for a Free consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (770) 866-2561.

    Discover how other sellers successfully completed a short sale and request a free consultation.
    Thinking about a loan modification? Our Atlanta Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender.

    Thanks for reading this, Roland Lorans.

    Roland is a Real Estate Agent at Better Home and Gardens Real Estate Metro Brokers .

    Phone: (770) 866-2561 or 404-843-2500 rlorans@gmail.com.

    View My homes for sale at HelpMeSaveMyHome.

    Roland Lorans specializes in Loan modification assistance and Home Short Sales in Hamilton Mill Dacula, Buford, Suwanee, Alpharetta GA and Metro Atlanta Georgia

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