Easy Home Equity Loan » bad credit

Why don't banks just issue 2 year bonds to borrow home equity at a decent interest rate?

admin — Thu, 29 Dec 2011 01:14:47 +0000

If a bank is having trouble with their asset column, why doesn’t a bank just issue 2 year bonds to borrow home equity from property owners at a decent interest rate? In other words, if a property owner has bad credit and does not qualify for a loan, why doesn’t a bank just give the property owner a 2 year bond (similar to a cd) at a 2 year cd interest rate and temporarily transfer the property owners equity into the asset column of the bank? The bank would then have additional assets in the asset column (to balance) and the property owner would get an interest rate on their home equity? (The amount borrowed by the bank would be only a fraction of the property owners home equity which would be insured only to 100,000, in agreement during the 2 year period that the homeowner would agree not to sale the property, pay taxes, etc. There could possibly even be an option to have the interest rate on return set to slowly cancel out some of the property owners personal debt. Foreign banks could do this to slow the rate of loss by shifting the time, similar to operation twist, but instead of using treasuries you would create a new bond and "twist" home equity.)

I am very new to banking concepts, does this form of bond already exist?
Thanks JoeyV, I need to make some mistakes now, I’m still new to this.
1) Yes, that’s where the "twist" would come in, in terms of the bond. The bank would issue a special kind of bond that the property owner can basically sell back to the bank (its in reverse, of course the interest rate will be that of a cd based upon the amount of equity agreed upon in the transaction).
2) This new type of bond could also be a special kind of deed that is made that shows temporary joint ownership during that period, with certain limitations in the contract. The bank can only use the equity of the property as a security. This could be made into a piece of paper with a notary seal of some sort and a few signatures on it.
3) The bank would actually temporarily be joint owner of the property (in terms of equity). It would be preferably best due to this if the property owner was preferably sub-prime, as the property owner would be unable to make a loan from that particular bank for the duration of the
…duration of the bond (due to a conflict of interest). I don’t know if this would work, but during the transaction, the money would actually be rotated from nothing in the asset column to a deposit in the liability column, insured, and back into the asset column to loan… all in terms of numbers, from nothing. (of course the real value being in the property and other loans made, not to mention other investments, r/mbs etc).
4) Well the "twist" in operation twist seems to me to be a twisting of the actual structure of the previous QE. In QE 1, 2 American banks were unable to make loans due to the credit crisis, it seemed they couldn’t make money off of federal bonds made from nothing unless they made sub-prime loans. So in terms of actual assets the banks had to hold properties (usually acquired through subprime lending) in the asset column in order to balance it, which lead to the mortgage crisis. In QE 1, 2 it seemed they simply took the money made out of nothing that American bank
…that American banks weren’t using, called the it a stimulus, then dropped this package of money made out of nothing on foreign banks for assistance. (I don’t know how it all exactly works yet, but I think after it was all over the properties from failed banks were just rebundled up and sold through investment banks.)
4) So it seems to me, in QE 3, the "twist" is that instead of unloading money made out of nothing on foreign banks, they shuffle the treasuries and simply twist the yield curve in terms of interest rates, in terms of time.
5) It seems if there is real value in home equity in failing countries, and the banks and property owners are not making money off it, it would kind of make sense to twist time and utilize it. In terms of failing countries though, it kind of sounds more like something the World Bank might do, that in providing interest on owned equity to those countries they provide base money for the people to buy basic supplies, meanwhile reloaning the money in the
…the money in the countries equity back to them in order to give property value, build and mobilize infrastructure.

I really appreciate your reply, have to do more research on it, the idea just came to me off the top of my head, so its nice to have some imput on it.

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how do i get home equity loan with bad credit ?

admin — Sat, 27 Aug 2011 12:16:12 +0000

my home equity about ,000, never have second lien, never have home equity loan, but i have bad credit score 520, how do t get at least ,000 out from my equity? can’t refinance because bad credit, what is the solution ? my emil andyallam@yahoo.com

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My daughter and I own a home together. If I take out a home equity loan, will my daughter be off the deed?

admin — Fri, 13 May 2011 02:39:31 +0000

My daughter and I own a home together, we have no mortgage. I want to take out a home equity loan because I have good credit and he has bad credit. If I take out a home equity loan in my name only, can my daughter still be on the deed? Please help b/c if she has to do a quit claim deed she will not agree it!

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Bad credit, good income, Home Equity loan. Interest Rate?

admin — Sat, 07 May 2011 03:39:27 +0000

I have a good income (,000) but very very bad credit (Long story). What are my chances of getting a home equity loan on I house I own valued at 0,000. What amount might they let me borrow? What kind of interest rate can I expect? I want to use this to rebuild my credit and pay for some other things.
Yes, I want to use the house as a piggy bank. It is the best option for my plans. Will any banks work with me?

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Piggyback 80/20 loans vs. 100% finance with PMI?

admin — Sun, 13 Mar 2011 23:07:07 +0000

Question Details: I know i should save $ for a down and have been but something always come up with kids and it’s VERY HARD so pleeeease, no lectures *smile*:-)))
. Here’s my question. I was told I am eligible for the piggyback 80/20 loan (I have bad credit I am fixing)but the 20% loan up can have 10% interest! I’ve done some calculating and if this is the case I’ll be paying about 00 for the 1st mortgage and 0 on the 2nd and basically would have negative equity by the time I finally move in. Am I right? Should I just wait to save at least 3% for the SONYMA loan which gives you 6.7% interest? PS-my dad has great credit and he said he would co-sign.

What about a 100% loan with PMI instead of a piggyback loan? What would the monthly mortgage be guesstimating the home is 0K?

Your advice is heartily appreciated. With the interest rate on the piggyback loan after 30 years I would have paid over a million dollars on a 0K home. Am I calculating this wrong or is the truth th

Interesting Blogs

Piggyback 80/20 loans vs. 100% finance with PMI?

admin — Thu, 10 Mar 2011 20:26:34 +0000

I know i should save $ for a down and have been but something always come up with kids and it’s VERY HARD so pleeeease, no lectures *smile*:-)))
. Here’s my question. I was told I am eligible for the piggyback 80/20 loan (I have bad credit I am fixing)but the 20% loan up can have 10% interest! I’ve done some calculating and if this is the case I’ll be paying about 00 for the 1st mortgage and 0 on the 2nd and basically would have negative equity by the time I finally move in. Am I right? Should I just wait to save at least 3% for the SONYMA loan which gives you 6.7% interest? PS-my dad has great credit and he said he would co-sign.

What about a 100% loan with PMI instead of a piggyback loan? What would the monthly mortgage be guesstimating the home is 0K?

Your advice is heartily appreciated. With the interest rate on the piggyback loan after 30 years I would have paid over a million dollars on a 0K home. Am I calculating this wrong or is the truth that craz

Interesting Blogs

Piggyback 80/20 loans vs. 100% finance with PMI?

admin — Tue, 08 Mar 2011 20:28:21 +0000

What about a 100% loan with PMI instead of a piggyback loan? What would the monthly mortgage be guesstimating the home is 0K?

Your advice is heartily appreciated. With the interest rate on the piggyback loan after 30 years I would have paid over a million dollars on a 0K home. Am I calculating this wrong?

Interesting Blogs

I know i should save $ for a down and have been but something always come up with kids and it's VERY HARD so p

admin — Fri, 07 Jan 2011 13:30:24 +0000

What about a 100% loan with PMI instead of a piggyback loan? What would the monthly mortgage be guesstimating the home is 0K?

Your advice is heartily appreciated. With the interest rate on the piggyback loan after 30 years I would have paid over a million dollars on a 0K home. Am I calculating this wrong?

Interesting Blogs

Can I get a home equity loan?

admin — Tue, 28 Dec 2010 10:01:16 +0000

Can I get a home equity loan if I have bad credit. Please help. I need to know what trusted companies I can contact for this type of loan. Thanks.

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Is there a mortgage company that gives people a second chance?

admin — Mon, 27 Dec 2010 04:50:00 +0000

Is there a mortgage company that gives people a second chance with bad credit but a good income? One that doesn’t charge an arm & a leg in interest? One that actually tries to help people who screwed up their finances and want to get on track without bankruptcy?