Page 2 - The Smart Borrower Blog

So what does this mean for you, the borrower? If you are borrowing from a juggernaut organization like Freddie Mae or Fannie Mac, need not worry. Both Mae and Mac are only under a federal government guardianship of sorts and are still, “legally separate from the federal government.”

How can a government shutdown affect homebuyers and lenders using FHA loans? Read about the possible consequences here.

Imagine you’ve had your house up for sale for two years. You bought a new house before you could sell your old home and you’re paying two mortgages. Finally, two prospective buyers come along. One buyer, a first-time homebuyer is waiting for approval on a mortgage loan; the other is a cash buyer.

Which way are you going to go?

Find out the best options for first-time homebuyers

Just remember that if you're trading up, make sure it's a move that you can afford. Just like you figured out with your starter home that you were going to be able to afford the mortgage...

The Obama administration released 31-page outline for the future of housing finance today, and while the future is still murky, what is clear is that the impact on the mortgage industry will be felt by homebuyers and lenders.

The administration has proposed that Fannie Mae and Freddie Mac gradually disappear within the next 10 years at most, and Congress received three different options for how to achieve such an overhaul.

The New York Times had this story on Monday about low-income families moving into vacant homes, and their landlord, Mark Guerette, does not own the homes. Guerette found the homes and has moved families in based on an 1869 Florida statute that if you take over a property, maintain it and pay property taxes and utilities, it will be yours if the owner does not claim it within seven years. This process is called adverse possession.

Read more about adverse possession

Tuesday’s election could influence how quickly state attorneys general move on the foreclosure investigation and pushing for more loan modifications, as I blogged about yesterday.

Half of the attorney generals were not re-elected or did not run in Tuesday’s election. The 12-member executive committee that is leading the investigation had six of its members who were not re-elected, or did not run for re-election. Iowa Attorney General Tom Miller, who is leading the charge, was reelected, so the push for change will not go away.

Read what the election results mean for foreclosure probe

If someone falls, the humane reaction is to lend a hand and help him up. If a family cannot pay their mortgage, in a perfect world, the bank would work with the borrowers and help them figure out a mortgage they can pay.

That’s the theory behind loan modifications – lending a helping hand to the borrower. But instead, banks have lent one hand and then pushed down with the other. Loan modifications rarely work. Lenders lose documents and delay the process, or they modify the loan to terms that really are not much better than they were before.

Find out why a loan mod could become more realistic