Loans Expert

AUSSIE Home Loans is under investigation by the Privacy Commission after personal information pertaining to customers was found in a bin at one of its former offices.

The files of 44 of the mortgage lender’s customers were allegedly found in a recycling bin in the public corridor of a suburban office in Sydney’s outer west, the ABC reported tonight.

The discovery has raised concerns that the customers could have been vulnerable to identity theft and fraud.

An Aussie Home Loans office had occupied the building but had moved to another location before the files were found.

John McCain is trying to renew his authority on the economic crisis by touting a fresh plan to prevent foreclosures nationwide as both he and Barack Obama hit battleground states Wednesday.

McCain floated his idea when he joins his vice presidential running mate Sarah Palin on the campaign trail in Ohio and Pennsylvania. Obama went Wednesday to the newest toss-up state of Indiana.

McCain’s $300 billion proposal at the second presidential debate was seen as a risk for the Republican nominee — much like his decision two weeks ago to suspend his campaign to deal with economic rescue legislation.

Buying $1 trillion of delinquent home loans at steep discounts would be a more direct way to break home price declines and rising foreclosures than the U.S. Treasury’s proposal to soak up troubled securities, JPMorgan Chase & Co. analysts said.

Government purchases of bad loans could buoy home prices and unfreeze capital markets at the lowest possible cost to taxpayers, the analysts, led by Dale Westhoff, wrote in a research note published on Wednesday.

Illiquid mortgage securities are currently priced to the worst-case scenarios of home price declines and defaults because “nothing has occurred to suggest an end to the self-perpetuating cycle,” the analysts wrote.

ST GEORGE BANK has returned to one of its more traditional sources of funding – the once-cheap home loans investment market – to raise just over $1 billion towards its estimated $12 billion financing needs for the current year.

But unlike the wider Australian commercial market that used to snap up such issues of residential mortgage-backed securities (RMBS), the country’s fifth-largest bank has managed to tap European investors in a private fund-raising issue.

Global RMBS markets have been effectively closed for the best part of a year after investors fled the sector following the US subprime loans debacle and the global credit crisis, which saw such investments plunge in value.

THERE’S exquisite irony in Aussie Home Loans getting into bed with the Commonwealth Bank. The biggest bank provider of home loans and the biggest non-bank player in the home loan market. But much more specifically, the company and person – Aussie’s John Symonds – most responsible for breaking the banking lock on home loans. And in doing so, slicing into the bank margins on home loans.

Falling house prices and spiralling interest rates have put pressure on homeowners with secured loans.

With a traditional unsecured personal loan, the only security the lender has is your promise to repay. But secured loans are effectively a second mortgage on your home, so if you miss payments your house could be repossessed.

And unlike unsecured personal loans which are usually on a fixed rate, secured loans tend to be variable rate and those rates are rising. In recent weeks, average rates have increased by about two percentage points – adding around ?3,690 to the price of a typical ?30,000 secured loan repaid over ten years.

The interest rate issue is the main problem when one wants to refinance a home loan. This is because the costs associated with home loans are high and thus, a single point raise on the interest rate can cost thousands of dollars. There are different reasons why one may want to refinance but the interest rate is always an important variable.

When considering refinancing you have to know exactly if the loan exchange will serve the purpose that you have in mind. Thus, in order to know whether you will be saving money on the overall life of the loan or if your monthly payments will decrease, you need to compare the loan terms of the loan to be refinanced with the new loan conditions.

In a nod to consumer advocates, regulators require lenders to evaluate subprime borrowers’ ability to pay while banning most prepayment penalties.

The Federal Reserve unanimously approved new mortgage lending rules Monday in a crackdown on shady practices – particularly those involving subprime loans made to borrowers with weak credit.

The agency made several substantial revisions to the proposed regulations it unveiled in December. Many of the changes acknowledged consumer advocates’ concerns that the rules still contained too many loopholes that would allow shady lending practices to continue.

But the Fed also made some concessions to industry executives, who feared increasing oversight would lead to less lending.