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National City unit suspends home equity loan offers

National City Corp , a large U.S. midwest regional bank, said on Monday its National City Home Equity unit has temporarily suspended offering new home equity loans and lines of credit, citing tighter mortgage market conditions.”We have taken a number of steps to help insure that our originations are in line with existing and anticipated market conditions,” said Kristen Baird Adams, a National City spokeswoman. “We’re certainly continuing to closely monitor the market, and will take appropriate steps.”Loans in the pipeline at National City Home Equity are “being looked at,” she said.The unit is separate from Cleveland-based National City’s main mortgage unit, which has also taken steps to limit product offerings, Adams said.National City is one of many lenders to tighten loan standards as homeowner defaults rise and investors fearful of taking on too much perceived risk grow wary of buying mortgage loans or mortgage-backed securities

Posted in Uncategorized, home equity loan, home loan, loan, equity loan, home equity loan rate, home equity loan comparison, home equity loan bankruptcy, bank loan | Comments(0) August 2007



National City Home Equity Clarifies Decision Regarding Loan Applications

The broker based wholesale home equity lending unit of National City Corporation’s subsidiary, National City Bank, today issued the following statement regarding a decision to suspend NHE approvals of new applications for new home equity loans and lines of credit: “In response to market conditions, NHE has suspended approvals of new home equity loans and lines of credit. The move by NHE does not impact National City’s Retail Bank, which continues to offer home mortgage and equity lines and loans directly to customers through its 1,300 branch network in eight states.”The suspension of NHE’s approval of new home equity loans and lines is one of a number of steps National City has taken in recent weeks to help ensure that mortgage origination strategies are in line with existing and anticipated market conditions. The company continues to closely monitor the market and take the appropriate steps to respond to changing conditions.”

Posted in Uncategorized, home equity loan, home loan, loan, equity loan, home equity loan rate, home equity loan comparison, home equity loan bankruptcy, bank loan | Comments(0) August 2007



Major bank stops approving home equity loans, credit lines

Ripples from the subprime mortgage meltdown are spreading, affecting even borrowers with stellar credit and making popular home equity loans tougher to find.The latest example: A major national lender stopped approving new home equity loans Monday.More and more lenders are yanking away loan programs and changing borrowing guidelines as they struggle to please bond market investors, who indirectly provide financing for the nation’s mortgages.Ohio-based National City Mortgage, one of the nation’s top 10 home equity lenders and one that makes loans through many California mortgage brokers, announced Monday it had “suspended approval” of new home equity loans and lines of credit. The move has no effect on current home equity loan customers, a National City spokesman wrote in an e-mail.But it may derail home buying plans of borrowers who had been relying on a second mortgage from National City to finance their purchase.” Lenders are just going out left and right, and that’s causing a lot of havoc,” said San Jose loan broker Doug Jones of Mortgage Magic, referring not just to National City’s announcement, but to the dozens of lenders that have shut their doors for good over the past year and a half.

The pace has accelerated again recently. Jones’ company had about 15 borrowers with loans in progress with National City, and typically did more than 30 loans a month with the lender. Monday morning he sent an e-mail to his Co-workers and clients advising them to seek funding fast if a purchase or refinance is in their plans, because of uncertainty about whether loan programs will keep dwindling. Later in the day, he responded to an e-mail from the Mercury News with the observation that “today was a day of more turmoil than I have ever seen,” as co-workers scrambled to find replacement loans for the affected National City customers and got turned down by lenders who last week had reliable backup loans available.

Posted in Uncategorized, home equity loan, home loan, loan, equity loan, home equity loan rate, home equity loan comparison, home equity loan bankruptcy, bank loan | Comments(0) August 2007



Arm Loans; What is A Home Equity Loan?

A home equity loan is a one-time lump sum credit a homeowner can acquire by placing their residence as the guarantee for payment. This type of credit is most appealing to consumers who may have poor credit standing, but need a large amount of money. Aside from these benefits, the borrower gains a lower interest rate and the possibility of tax-deductible interest. Why do lenders offer large amounts and charge lower interest rates? Because lenders understand that most homeowner debtors diligently pay their loans rather than risk losing their homes. Besides, the borrower cannot tuck the house away or conceal it.

The three biggest advantages a home equity loan offers are:

Large Loan Amount

The borrower can obtain as much as 85% appraised value of their home, minus the unpaid mortgage payments owed on the first mortgage. However, there are other factors as well that the lender will assess, such as the borrowers’ credit standing, monthly income, or ability to pay and state of unsettled loans. If the borrowers’ credit record is spotty, the loan will necessarily be smaller.

Low Fixed Interest Rate & Tax-deductible.

This type of loan has a lower interest rate, in comparison to personal or credit cards loans. Additionally, a fixed interest rate assures you that the payment remains constant right until the end of the entire loan. This makes it easy to work the monthly payments into your budget. Another advantage a borrower can claim are tax deductions on the interest of the loan for as much as $100,000.00. However, do not assume that the advertised APR (annual percentage rate) is the real rate. Ask and shop around.

Ease of Use

The one-time release of the entire loan will enable the borrower to consolidate existing debts, pay for home improvements, or use the amount for emergencies, or any big-ticket items.

The two real disadvantages are:

Home Foreclosure

If you default in paying the principal and interest fees for the loan, you will lose your home. This is certainly not the ideal type of loan for a couple who might use their retirement money to bail themselves out of the difficulty, or first time homeowners, who are inexperienced in handling finances. That is why, when you negotiate with the lender, you should ask about the penalties attached for late payments, as well as the conditions in defaulting payments and have all your agreements documented.

Long Term Repayment Period

The convenience of repaying the loan, which can vary from a 15 to 30 years period, is ultimately more expensive, because you are taking longer to pay. Another negative possibility is, if the real estate market bottoms out, you will be paying for a house which is worth a lot less. This could spell disaster especially if you are intent on selling the house. On the other hand, you are required to pay the remaining loan balance if you put the house up for sale. Given what you now know about home equity loans, become a more prudent borrower. Carefully consider why you need the loan and if you can comfortably meet the monthly payments. Then educate yourself on the options that will best serve your financial needs and still leave you with your home.

Posted in Uncategorized, home equity loan, home loan, loan, loan calculator, equity loan, home equity loan rate, loan rate, fixed rate home equity loan, home equity loan comparison, home equity loan bankruptcy | Comments(0) August 2007