The manner the question is posted looks like this is a homework for school. there are many calculators avalable to answer this question. Visit my website www.victorcatalan.ca and plug in the numbers so you can get the answer. You need to understand how this question will be translated to the calculator to get the answer.

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I am sorry if this sounds like a dumb question, but i don't understand. for example, why are 30 year fixed mortgage rates the highest mortgage rates, vs say a 15, and why are 15 year fixed rate mortgages higher than adjustable rate mortgages ? it seems that lending institutions are taking greater risk with a arm vs. a fixed rate mortage and they should pay a higher rate (for example, compared this situation to a new car loan vs a used car loan--the risk is higher on a used car loan ?? ?? i can understand a fixed rate loan of 30 higher than a 15 --greater risk of default from the borrower, but i still don't get the arm being so low.

The lender is taking basis risk on longer term loans since no one knows where rates will be in 15 or 30 years. The bank looks at the yield curve and prices the loan based off of a spread for 15 and 30 year product. ARMs are cheapest because they recast earlier and there isn't as much interest rate risk in the short term.

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I have had this credit card for over 15 years and have never been late or over my credit limit. now my story, a year ago we moved out of state and within 3 months of moving found out one of my daughters has epilepsy (she is now under long term hospital care) and my middle daughter has tuberculosis (undergoing treatment). still, we maintained our credit card payments, mortgage payments on 2 homes (the other had not sold when we moved) and auto loan payments. in february we decided to give our credit union the deed in lieu of debt to our other home. they were understanding and said they would only report us as a few months behind, rather than as a foreclosure. they held their end of the bargain. but now, a credit card which i have had a 8.88% rate with for 15 years has decided to raise my rate to 35.50%. this card has a $19,000 balance due to medical expenses. any suggestions on what i can do. does this fall under predatory lending? i would appreciate any and all suggestions.

Write a letter to your congressman and senator, and send a copy to the credit card company. Congress is taking a look at this practice, where credit card companies look at your credit report and use any excuse to raise the rate. Yours sounds like the perfect case study in why such laws are necessary. While this will probably not help you in the short term - and hopefully others will have ideas for you - you may prevent others from finding themselves in the same situation. Good luck.

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If the long term interest rated has held pretty much steady throughout the past couple of years, why are all these sub-prime loans monthly payments increasing by an average of $350/mo. and, why are all these home owners so suprised, could they not see this time coming? i think this problem is a bunch of financially incompetant people who bought 5 times the house they could afford and now the banks and the financially responsible people are going to bail these idiots out of their $500,000 houses, when they should be living in a studio appt. yea, i know their interest rates are increasing, but they should have been aware of those increases when they signed the note. why are the interest rates incresing when long-term rates are pretty much staying steady?

The increases in payments are due to adjustable rate mortgages (ARMS). As rates adjust up, the payments increase. I wholeheartedly agree that borrowers should have understood what they were signing.

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In utah i need some advice. i will try and make this short. i have a pre-fab home that was built prior to 1976 and since buying it in 1994 (which was easy) it is now very difficult to find lending on it. my wife fell ill several years ago and we needed to get at some of our equity. our only option was to take a new mortgage for 11.5%. we thought we would be able to weather the storm and improve on the situation later. well that has never happened and now we just filed ch7 (due to medical debt) and are now considering walking away from the house since we cannot sell (due to nobody wanting a loan at 11.5%) and the house is way too small for my family. the only reason we have held on to this house this long is it's remote location and the lot size. i am going in this monday 3/22/10 to meet with my lawyer about the re affirmation on the house. the lender said they will not budge on the interest rate but are not requiring any of the arrears (i quit paying months ago to get them to negotiate). but i have continuously told them i want to keep the house. would do you think the mortgage company would do if i put my foot down and said i want this payment and this interest rate or just take the house. my loan is $160k i pay $1600 a month. i am thinking about telling them i want my payment to be $1000. i really don't see the place being worth more than $160k for 2 reasons.... the current econmy and is it worth that if someone cannot get a loan for it? the only way i see this place going is if a cash buyer stepped in. one more question.... i have read that is is fairly easy to buy a home right after ch7 but what if you now have a forecloser?

11.5% is crazy. If the bank won't negotiate in good faith, ie the $1000 a month, (and I do not think they will), then they will have one more house on their inventory---you have that leverage if it is worth anything. If you are willing, then go into foreclosure. My home in Sandy, UT went into foreclosure in 2002, by the way. My ex wife lived there more than a year rent free, while all the threats of foreclosure swirled around. One thing is, you should start already to pack, and be ready to move when the house is sold. They want you out pronto. In the mean time, save up your $1600 a month. Keep it safe out of your checking/savings. I actually went to Bank of Zion and got a safety deposit box--also kept it at a new apartment I had to rent in a secret place--under the bottom draw in the bathroom where no one goes. Any ways, after the foreclosure, came bankruptcy, then discharge of all my Bank One Home equity loan, and all the credit cards. Not bragging, it was a breath of fresh air. Two years later, I got two loans, one for 80%, and one for 20%. I have almost paid off this place living frugally, and the CH7 will still be on my credit report until 2012. True story.

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"what was unremarkable is that reporters’ questions focused on an old issue: how much can the fed reduce unemployment without stoking inflation? bernanke’s bet is: a lot. he’s embraced super-easy credit to cut the appalling 8.8 percent jobless rate; that’s 13.5 million people, nearly half out of work for six months or more. since late 2008, the fed has held short-term interest rates near zero. to cut long-term rates, the fed is buying gobs of treasury bonds and mortgage securities: $1.725 trillion from late 2008 to march 2010; an additional $600 billion from last november through june. these purchases are known as qe1 and qe2, for “quantitative easing.” but there’s a growing debate about whether all the pump-priming is helping recovery or simply fostering inflation. the economy’s fate may hang on who’s right. studies by fed economists are, not surprisingly, supportive. one estimated that qe1 and qe2 lowered long-term interest rates by about 0.5 percentage points and saved nearly 3 million jobs; the jobless rate otherwise could have approached 11 percent. many private economists are less impressed; they suspect the benefits of qe1 faded with qe2. lending markets “were frozen” when qe1 started, says economist david wyss of standard & poor’s. investors wouldn’t invest. the fed’s bond purchases reduced fear and stabilized markets. qe2’s impact is more muted, he believes. one claimed effect is the stock market’s surge. the theory: investors switched from low-yielding bonds to stocks. sure enough, stocks are up about 30 percent since bernanke signaled qe2 in late august 2010. but wyss doubts that qe2 accounted for more than 4 percentage points of the gain. strong corporate profits are the main cause, he says. meanwhile, inflation creeps up. over the past year, the consumer price index rose 2.7 percent; six months earlier, the year-over-year gain was only 1.2 percent. bernanke blames higher oil and food prices, reflecting temporary factors (the war in libya, poor harvests) that may be reversed." this is a portion of an article, and the main things are that: aggregate demand is falling (which indicates falling prices and falling employment) and yet apparently inflation is 'creeping up'. how is this possible? the full article is here:http://www.newsweek.com/2011/0 5/02/ben-bernanke-s-bet-on-jobs-and -inflation.html and, if anybody knows, what is "super easy credit"? thanks a lot!

If you read this rag, take it with a liberal dose of salt. CPI, for instance stood last year at zero growth, reflected in social security recipients, military retirees, and disabled vets all getting zero cost of living increase. You are better off with The Economist. Super easy credit is the author's term. He is trying to make a case for low interest rates being the measure for easy, but has neglected the poor availability of credit in the subprime market, which arguably has tightened credit for small business owners, most of whom had to ask for what were called liars' loans in the '00s. Inflation figures neglect, intentionally, volatile commodities. Aggregate demand will go down when price for volatiles are up, and will lead withdrawn orders and increased unemploymen if the author has it right. But refer again to the first and second paragraphs.

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How are why did this happen? how does this affect us. sydney, australia - prime minister john howard on sunday called general elections in australia for nov. 24, cautioning voters about his opponent's plans for a withdrawal from iraq and reminding them he has overseen the country's long economic boom. advertisement howard, one of washington's staunchest allies in iraq and the broader war on terror, is seeking a fifth term and hoping to save his reputation from the final judgment that he should have quit while he was ahead. labor party leader kevin rudd, a chinese-speaking former diplomat 18 years howard's junior, has held a commanding lead in opinion polls since december over the 68-year-old prime minister, whom he claims is out of touch after more than 11 years in power. the six-week campaign, long by australian terms, ends months of intense unofficial politicking. while domestic issues such as the economy, education and the hospital system are likely to dominate the campaign, iraq and global security lurk in the background. howard has maintained close ties with washington — australia's most important foreign partner — and sent 2,000 troops to join u.s.-led invasion of iraq in 2003. he has said the 1,600 australian forces still in the country will stay as long as they are needed. rudd has promised to withdraw australia's 550 combat troops, in consultation with washington while leaving the rest in training and other roles. howard on sunday conceded his iraq policy was unpopular with many australians, but said withdrawing too soon would embolden terrorists worldwide. "i know a lot of people don't agree with me, but i do not think it is in australia's national interest to participate in a premature withdrawal from iraq," he said. howard is counting on a boost from more than 15 years of economic growth, which he said only he had the experience to continue to ensure, and warned the public not to trust rudd and his party because they are untested in government and beholden to labor unions. rudd countered by mocking howard with a list of perceived failings. "mr. howard has had a lot of experience in taking australia into a war without an exit strategy," rudd said, referring to iraq. "mr. howard has a lot of experience in denying that climate change represented an economic and environmental challenge for this nation's future." there is no sign the prosperity, fueled by china and india's voracious demand for australia's coal and other minerals, will end soon, and howard is running on his stewardship of the economy despite five recent interest rate hikes that have sent mortgage repayments higher. rudd says he will mirror the government's successful economic policies, while accusing howard of being too old-school to tackle modern issues like global warming and a high-speed broadband network. howard, 68, became australia's most powerful leader in a generation in the previous election in 2004 when he won control of both houses of parliament. but his popularity has slipped in opinion polls, which now show the margin of around 4 percent he holds in his sydney suburban district may not be enough to stop him from losing his seat in parliament — a humiliation suffered by only one other prime minister in 100 years.

Australia is America's best friend and ally. Australia has fought along side of the U.S. in every war since WW II. No other country can say that.

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The subprime debacle by dr. kuni michael beasley 30 years in gestation the democrats are doing a lot to try to pin the subprime debacle on the republicans and the bush administration. however, there is a long tail to this problem that just happened to pop at this time. now, for the rest of the story. definitions first. fannie mae is the federal national mortgage association (fnma), founded in 1938 as a publically traded government sponsored enterprise (gse) that is stockholder owned that makes loans and issue loan guarantees. its cousin is freddie mac, the federal home loan mortgage corporation (fhlmc), founded in 1970 as another gse created to expand the secondary market for mortgages. freddie mac buys individual mortgages on the secondary market, pooled them into packages, and sold them to investors on the open market. the secondary market packaged mortgages as collateral and issues securities called collateralized mortgage obligations (cmo) and collateralized debt obligations (cdo), to reduce the risk of individual loans. cmos are a separate entity that is the actual legal owner of the mortgages it has in a "pool." cmos sell bonds to investors based on the value of the mortgages. investors receive payments based on the increased value of the loans in the pool. the collateral for the bonds are the actual mortgages. cdos are a separate entity like cmos, but are more focused on fixed income assets such as, but not limited to mortgages (and can include commercial mortgages and corporate loans). the focus is cash flow and slices (tranches) of these cash flows are sold to investors. the subprime mortgage crisis surfaced first in 2007, but it had been incubating for years, indeed, decades. though roots can be traced back to the new deal legislation in the 1930's, the current crisis actually draws its source from the community reinvestment act (cra) [1977] during the carter administration that forced banks to lend money to less credit worthy clients. lending institutions were evaluated to determine if it met the "credit needs of the community" and this was factored into regulatory decisions of the federal government such as applications for facilities, mergers, and acquisitions. interest in the cra resurfaced in the clinton administration when regulations in the cra (which could be manipulated without any participation of congress) essentially forced institutions to offer loans to higher risk individuals and businesses. the term "ninja" loans emerged describing high risk loans made to people with no income, no job, and no assets, but completed a particular bank's portfolio sufficient to keep federal regulators off their backs. as access to easy money for high risk borrowers increased, certain institutions began to take advantage of these new opportunities to score fed points and make easy money. name dropping here: countrywide began to process, package, and offer investment instruments (cmos) based on these loans. revisions to the cra by the clinton administration allowed mortgage companies to offer loans without the relative reserve of deposits normally required of banks and other financial institutions. in addition, this allowed for securitization of sub prime mortgages based on the pooling and packaging of cash-flow producing assets into securities that could be sold to investors - with the asset value not tagged to actual value of the property, but to the value of the cash flow produced by the asset held (sounds weird). the first public securitization of cra loans was started in 1997 by (familiar name) bear stearns! now, let's understand sub-prime loans for a moment. a sub-prime loan is a mortgage offered at a deep discount on interest the first year or two so the borrower could qualify for a larger loan and more expensive house, betting that their economic profile would get better and they could afford large payments later. adjustable rate mortgages (arms) are a form of this where the entry rate is low and rises based on certain criteria such as the rates for government securities. simply put, lenders (not necessarily banks, but more often mortgage companies) offered low cost, low entry rate mortgages to people who would not normally qualify for that amount of debt. these loans were "warehoused" by financial institutions, where a financial institution like merrill lynch would set up a separate, but wholly owned mortgage company (first franklin) to attract loans. merrill lynch would retain control of the loans as a "trustee" or "servicer," and derive benefits from fees for "managing" the loans and increase assets by keeping escrow deposits. in turn, these loans would be sold to fannie mae or freddie mac (who were assumed to guarantee the loans), who, in turn, repackaged them for the secondary market. in 2003 the bush administration tried to head-off what they saw as a potential crisis by moving the supervision of fannie mae and freddie mac under a new agency

Henry Cisneros under the Clinton adminisration authored the entire mess.

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I see the argument a lot, especially in places like yahoo answers and blogs but i have never really seen it backed up with examples or evidence. i can only assume that people are referring to the wars in iraq and afghanistan and our current economic status. i just want to give some perspective that i hope people take into account before bashing me, and bush, and republicans in general so that i can really get some answers. i am still undecided on who i am voting for and have never chosen who i vote for based on party affiliation. i consider myself level headed and i try to understand situations before reacting. so, here it goes. president bush took office on january 20, 2001. this was immediately following the dot-com bubble and the fall out created by it. can't blame that on him. also, less than 8 months later 9/11 happened as we all know. aside from the conspiracy theorists, you can't blame that on him either. he immediately took action, as the nation wanted him to and not too long after congress declared war in iraq. now, i think one of the things people blame on bush is the whole thing about not finding wmds in iraq. i am fairly certain president bush should not be held accountable for this. everyone believed it due to faulty intelligence. i am not sure how that is his fault. in this argument i am also ignoring reports that we did in fact find wmds in iraq in the form of chemical weapons. perhaps you can blame bush for the fact that we have been in iraq this long but in my humble opinion, destroying a country's government then packing up and leaving isn't exactly a good plan. we have to finish what we started and i think we will prevail in the end. we have to be patient, this is a new kind of war that has never been fought before. keep in mind that in some months more people die in detroit due to gang violence (one city) and die in iraq due to the war (an entire country that is at war). as for the economy, i think the argument is that bush somehow got us into this mess because he has been president for the last 8 years. according to one of my economics professors the blame can't be placed with any single person due to the fact that we got to this place by 30 years of deregulation of our financial systems. the guy is an economic historian and i believe him over most people who will respond to this post anyways, so lets assume that that part is not up for debate. now in doing some reading i came across an article in the ny times that leads me to believe if people do want to point the finger at one person for causing this bush should not be that person, but clinton should. the almost prophetic article starts out with the following. in a move that could help increase home ownership rates among minorities and low-income consumers, the fannie mae corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. the action, which will begin as a pilot program involving 24 banks in 15 markets -- including the new york metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. fannie mae officials say they hope to make it a nationwide program by next spring. fannie mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the clinton administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. in addition, banks, thrift institutions and mortgage companies have been pressing fannie mae to help them make more loans to so-called subprime borrowers. these borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans. ''fannie mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said franklin d. raines, fannie mae's chairman and chief executive officer. ''yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.'' in moving, even tentatively, into this new area of lending, fannie mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. but the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's. ''from the perspective of many people, including me, this is another thrift industry growing up around us,'' said peter wallison a resident fellow at the american enterprise institute. ''if they fail, the governme i just noticed my post got cut off..... oh well. looks like people are still choosing ignorance. if you want to read the article go to nytimes.com and search for "clinton fannie mae" and read the september 30, 1999 article.

Great post. I see some responders don't like you interrupting their dream. I know space is limited - too bad you couldn't add quotes from dems who saw no reason to impose controls on Fannie and Freddie. One could also point out the stock market hit an all time high with Bush in the White House. This happened in spite of the medias attempts to stifle prosperity. Did the media ever report a positive event in the Bush years without the caveat "but".

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I split from ex leaving her in the house we held a joint martgage on. we are not in negative equity and both work. i have a job with a financial institution for which i need a good credit history. the house is currently on the housing market and she is living there with her child from a previous relationship. i have been renting elsewhere for nearly nine month and until recently, i continued to pay all the mortgage until i could no longer afford two sustain two properties. i now pay half of the mortgage payments and for the last two month, she has not paid. this is going to affect my credit score which i do not want to happen. i cant afford to pay and have been in contact with the mortgage provider who are aware that the house is on the market. they have advised to switch to a interest only using the house as a repayment vehicle. this is fine in theory, but she will not respond to my requests to pay, let alone sign anything to switch mortgages. how do i get her to pay without spending loads on a solicitor, and, should she continue and i get a bad credit rating due to this, will repossession proceeding commence, given that i have been paying 50%, the house is for sale and i have made the mortage company aware of the situation!

since she ownes half the house u can't do anything to her for not paying. if no one pays the house will be foreclosed on. move back in the house until its sold and u split the equity.

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Instructions designate the best answer for each of the following questions. use the following data for questions 1 and 2 below: carlo company bought real estate, on which there was an old office building, for $900,000. they paid $90,000 in cash as a down payment and signed a 6% mortgage for the remainder. they immediately had the old building razed at a net cost of $30,000, the salvaged materials were sold for $4,200. attorneys were paid $7,000 in connection with the land purchase and an additional $3,000 in connection with permits and zoning variances necessary for carlo's new office building. $25,000 was paid for excavation for the basement of the new building. $2,100,000 was paid for construction of the new building, and $95,000 was paid for a parking lot and necessary walkways and driveways. _____3.martin textile purchased machinery for $50,000 eight years ago. it was expected to have a useful life of ten years, no salvage value, and was depreciated using the straight-line method. at the end of its eighth year of use it was retired from service and given to a junk dealer. the entry to record the retirement includes a a.debit to loss on disposal for $10,000. b.debit to machinery for $50,000. c.debit to depreciation expense for $10,000. d.credit to accumulated depreciation—machinery for $40,000. _____ 4.which of the following should not be included in the plant assets (property, plant, and equipment) classification? a.land on which warehouse sits b.building housing corporate headquarters c.parking lot used by visitors d.land held for investment. _____5.salvage value is deducted for the initial computation of depreciation expense in all of the following methods with the exception of a.straight-line. b.units-of-activity. c.declining-balance. d.all of the above include a deduction of salvage value. _____6.the cost of a patent should be amortized over a.40 years. b.the shorter of its legal life or its useful life. c.the longer of its legal life or its useful life. d.its useful life. ____8.which of the following is not an intangible asset? a.research and development costs b.copyrights c.organization costs d.goodwill _____11.stome corp. issued $300,000 of 5%, 5-year bonds at 102 on january 1, 2006. the straight-line method of amortization is used and the bonds pay interest annually on january 1. the amount of bond interest expense that stome should report on its 2006 income statement is a.$16,200. b.$13,800. c.$15,000. d.$14,400. ____12.front corporation issues its bonds at a discount. amortization of the discount will a.decrease bond interest expense. b.increase bond interest expense. c.decrease the carrying value of the bonds on the balance sheet. d.be reported as a loss on the income statement. ____13. failure to record a liability will probably a.result in a overstated net income. b.result in overstated total liabilities and owner’s equity. c.have no effect on net income. d.result in overstated total assets. ____15. gunder company does not ring up sales taxes separately on the cash register. total receipts for october amounted to $18,900. if the sales tax rate is 5%, what amount must be remitted to the state for october's sales taxes? a.$900 b.$945 c.$45 d.it cannot be determined. ____17. the muffin company issued a five-year interest-bearing note payable for $50,000 on january 1, 2005. each january the company is required to pay $10,000 on the note. how will this note be reported on the december 31, 2006, balance sheet? a.long-term debt, $50,000 b.long-term debt, $40,000 c.long-term debt, $30,000; long-term debt due within one year, $10,000 d.long-term debt of $40,000; long-term debt due within one year, $10,000

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