Financial overhaul and you: Mortgages, debit cards and more ...
By Sandra Block,, USA TODAY
You're not a bank president and you wouldn't know a derivative if someone served you one for dinner. No matter. There are several provisions in the financial overhaul bill that could affect you, especially if you plan to buy a home.
"Consumers have been pounded by the financial crisis, not just from job losses, but from punishing credit card fees and skyrocketing interest rates," said Pamela Banks, senior policy counsel for Consumers Union. "The bill gives consumers a fighting chance."
Here's a rundown of consumer measures in the bill that's headed to the House and Senate for final votes:
Mortgages
• Lenders would no longer be allowed to pay mortgage brokers a commission based on the interest rate for a home loan. Critics have charged that this fee, known as the yield spread premium, encourages mortgage brokers to steer borrowers into risky loans with high interest rates. The law would bar brokers from receiving any compensation tied to the terms of the loan, other than the principal amount. The yield spread premium "is sort of a secret deal between the lender and the broker" that often ends up hurting the consumer, says Ruth Susswein, deputy director for Consumer Action.
The National Association of Mortgage Brokers opposed the provision, arguing that it would prohibit low-cost financing, a popular option for home buyers and refinancers.
The provision would prevent borrowers from paying a portion of their closing costs upfront and rolling the rest into the loan in the form of a higher interest rate. Under the bill, loan originators will be required to collect all of their fees upfront or roll the entire amount into the loan, says Jim Pair, president of the NAMB.
• Prepayment penalties would be limited or prohibited, depending on the type of loan. Lenders won't be allowed to impose any prepayment penalties on certain types of risky loans, such as loans with a large balloon payment. For 30-year, fixed-rate loans, penalties would be limited to the first three years of the loan.
• Lenders would be required to determine that borrowers can afford the monthly mortgage payments, along with insurance, taxes and assessments. For adjustable-rate mortgages, lenders would have to ensure that borrowers can afford the highest rate under the terms of the loan.
This may sound like something lenders are supposed to do, but during the housing boom, many lenders were cavalier about borrowers' ability to repay loans. Stated income, "no-doc" and "liar loans," which allowed just about anyone with a heartbeat to buy a house, were rampant. The credit crunch led lenders to tighten their standards, so in some respects, "Many of these reforms are going to be locking the barn door after the horse is gone," says Keith Gumbinger, vice president of HSH Associates.
Still, lenders have short memories, and without the legislation, there's no guarantee they won't loosen their standards when the real estate market recovers, Gumbinger says. Real estate markets "burn down every 15 or 20 years or so, and the market doesn't seem to learn from past mistakes," he says.
Credit scores
Consumers who are turned down for a loan would be entitled to receive a copy of the credit score that the lender used to make that decision. Consumers would also be entitled to a free credit score if they were offered a loan at a rate that's higher than the one provided to borrowers with excellent credit. You'd have the right to a credit score any time it results in an "adverse action," which could include everything from a job rejection to a higher insurance rate.
However, you won't get a free credit score when you order your free credit reports. Since 2005, all consumers have had the right to a free annual credit report from all three credit bureaus through www.annualcreditreport.com. But the only way to get a credit score is to buy one from one of the credit bureaus or through www.myfico.com.
Mandating free annual credit scores is impractical because lenders and others use many different types of credit scores, says Mark Greene, chief executive of FICO, developer of the widely used FICO score.
For example, some credit scores are tailored for use by credit card issuers, while another is designed for mortgages, he says. "The way out of these woods is to say that the score used in making a lending decision is the score to be provided," he says.
Credit and debit cards
The bill includes a provision aimed at reducing some "interchange fees" — fees banks charge retailers when consumers pay with debit cards. Here's how you could be affected:
• The Federal Reserve Board would be required to determine what constitutes "reasonable and proportional fees" for debit card transactions, which currently run about 1% of the transaction. The National Retail Federation says lower fees could lead to lower prices for consumers, but other analysts doubt consumers will notice much of a change.
Banks have warned that if interchange fees are reduced, they may have to eliminate debit card rewards programs and increase other fees to make up for the lost revenue.
Debit cards issued by banks and credit unions with less than $10 billion in deposits are exempt from the rule. Prepaid debit cards used by government agencies to issue unemployment and other benefits are also excluded.
• Retailers would be allowed to offer consumers a discount for using cash, a check, or a debit card instead of a credit card. However, lawmakers removed a proposal that would have allowed retailers to give consumers a discount for using a card brand that charges a lower fee than a competing brand.
• Retailers would also be allowed to require a minimum purchase before they'll accept a debit or credit card. Currently, retailers are typically prohibited under card associations' rules to set minimums. So if you're used to using your credit card for everything, including a $2 cup of coffee, you may need to start carrying cash.
Consumer loans
A new agency, the Consumer Financial Protection Bureau, would have the authority to regulate mortgages, credit cards, payday lenders, check-cashing companies and lenders that provide private student loans. However, auto dealers' financing and insurance arms would be exempt from the agency's jurisdiction.
The auto industry argued that auto dealers aren't banks and didn't play any role in the financial meltdown. The National Automobile Dealers Association also contended that the additional bureaucracy would drive up the price of auto loans.
Consumer groups maintained that placing auto dealers under the consumer agency's jurisdiction would protect consumers from abusive lending practices by unscrupulous dealers. In addition, exempting auto dealerships' finance departments from regulation could give them an unfair advantage over credit unions and small banks, according to the Cambridge Winter Center for Financial Institutions Policy.
Wednesday, June 30, 2010
Friday, June 25, 2010
Fannie Mae Tightens Up on Loan Defaulters to Discourage Homeowners from Walking Away
Thinking about walking away? You may want to think again. Government-sponsored mortgage purchaser Fannie Mae is trying to encourage distressed homeowners to find alternatives to foreclosure by banning those who walk away from getting new loans for seven years.
A strategic default occurs when a homeowner stops making payments on a mortgage despite being able to do so. It has become increasingly common in communities where housing values fell sharply and homeowners are "underwater," or owe more than their houses are worth.
Fannie Mae said that in locations where the law allows, it also plans to take legal action to recoup outstanding mortgage debt from borrowers who strategically default.
The wave of foreclosures affecting Fannie and Freddie has caused a major problem for the U.S. government, which effectively guarantees the loans. The government seized control of Fannie and Freddie in September 2008, a rescue that has cost taxpayers $145 billion so far. The two companies show no signs of being self-sufficient.
In announcing the new policy, Fannie Mae said homeowners who make a good faith effort to resolve their situation with their mortgage companies, and those who have extenuating circumstances, will be eligible for new loans in a shorter time period.
A strategic default occurs when a homeowner stops making payments on a mortgage despite being able to do so. It has become increasingly common in communities where housing values fell sharply and homeowners are "underwater," or owe more than their houses are worth.
Fannie Mae said that in locations where the law allows, it also plans to take legal action to recoup outstanding mortgage debt from borrowers who strategically default.
The wave of foreclosures affecting Fannie and Freddie has caused a major problem for the U.S. government, which effectively guarantees the loans. The government seized control of Fannie and Freddie in September 2008, a rescue that has cost taxpayers $145 billion so far. The two companies show no signs of being self-sufficient.
In announcing the new policy, Fannie Mae said homeowners who make a good faith effort to resolve their situation with their mortgage companies, and those who have extenuating circumstances, will be eligible for new loans in a shorter time period.
Thursday, June 17, 2010
Foreclosure Rate Steadies, But It Ain't Over Yet
WASHINGTON -- The foreclosure crisis appears to be leveling off.
The number of people facing foreclosure is nearly flat from a year ago, according to the latest report from a private foreclosure listing service. A third fewer people are receiving legal warnings that they could lose their homes. And foreclosures are receding in some of the hardest-hit cities.
Still, the number of foreclosures remains extraordinarily high. Experts caution that a big reason for the stabilization is that banks are letting delinquent borrowers stay longer in their homes rather than adding to the glut of foreclosed properties on the market. New consumer protection laws, which vary by state, have also meant borrowers can spend more time in their homes.
A new wave of foreclosures could be coming in the second half of the year, especially if the unemployment rate remains high, mortgage-assistance programs fail, and the economy doesn't improve fast enough to lift home sales.
"It's not anything like a recovery yet," said Rick Sharga, a senior vice president at RealtyTrac Inc., a foreclosure listing service.
RealtyTrac reported Thursday that nearly 323,000 households, or one in every 400 homes, received a foreclosure-related notice in May. That was up 0.5 percent from a year earlier but down 3 percent from April. The report tracks notices for defaults, scheduled home auctions and home repossessions.
But in a sign that the crisis is far from over, the number of homeowners who lost their homes to foreclosure hit a record of nearly 94,000 in May. That number may finally peak next year, as lenders try to work their way through millions of delinquent loans.
Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. Now, homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.
A record high of more than 10 percent of homeowners with a mortgage had missed at least one payment as of the end of March, according to the Mortgage Bankers Association. But the number of homeowners just starting to show trouble is trending downward as the economy improves.
"That's a very good thing," said Thomas Lawler, an independent housing economist in Virginia. But he noted that even with that positive trend, "you are highly likely to see an acceleration in the number of actual completed foreclosures."
Lenders are offering to help some homeowners modify their loans. But many borrowers can't qualify or they are falling back into default. The Obama administration's $75 billion foreclosure prevention effort has made only a small dent in the problem.
About 25 percent of the 1.2 million homeowners who started the program over the past year had received permanent loan modifications as of April. About 23 percent of those enrolled dropped out during a trial phase that lasts at least three months. Many more are in limbo.
Among states, Nevada posted the highest foreclosure rate in May. One in every 79 households there received a foreclosure notice. However, foreclosures there are down 16 percent from a year earlier.
Arizona, Florida, California and Michigan were next among states with the highest foreclosure rates. Rounding out the top 10 were Georgia, Idaho, Illinois, Utah and Maryland.
Las Vegas continued to be the city with the nation's highest foreclosure rate, but activity there was down 18 percent from a year earlier. And nine out of the top 10 cities with the highest foreclosure rates posted annual declines. The exception was the Vallejo-Fairfield area in California, where foreclosures were up 1 percent from a year ago.
Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties. That's a concern for local communities, and a drag on the economic recovery.
In recent months, home prices have started to sink again after stabilizing last summer. Economists at Goldman Sachs predicted in a report last week that prices will fall about 3 percent nationally over the next year, with the largest declines in cities where mortgage defaults are rising.
"The housing market remains plagued by enormous excess supply," wrote Goldman economist Sven Jari Stehn.
The number of people facing foreclosure is nearly flat from a year ago, according to the latest report from a private foreclosure listing service. A third fewer people are receiving legal warnings that they could lose their homes. And foreclosures are receding in some of the hardest-hit cities.
Still, the number of foreclosures remains extraordinarily high. Experts caution that a big reason for the stabilization is that banks are letting delinquent borrowers stay longer in their homes rather than adding to the glut of foreclosed properties on the market. New consumer protection laws, which vary by state, have also meant borrowers can spend more time in their homes.
A new wave of foreclosures could be coming in the second half of the year, especially if the unemployment rate remains high, mortgage-assistance programs fail, and the economy doesn't improve fast enough to lift home sales.
"It's not anything like a recovery yet," said Rick Sharga, a senior vice president at RealtyTrac Inc., a foreclosure listing service.
RealtyTrac reported Thursday that nearly 323,000 households, or one in every 400 homes, received a foreclosure-related notice in May. That was up 0.5 percent from a year earlier but down 3 percent from April. The report tracks notices for defaults, scheduled home auctions and home repossessions.
But in a sign that the crisis is far from over, the number of homeowners who lost their homes to foreclosure hit a record of nearly 94,000 in May. That number may finally peak next year, as lenders try to work their way through millions of delinquent loans.
Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. Now, homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.
A record high of more than 10 percent of homeowners with a mortgage had missed at least one payment as of the end of March, according to the Mortgage Bankers Association. But the number of homeowners just starting to show trouble is trending downward as the economy improves.
"That's a very good thing," said Thomas Lawler, an independent housing economist in Virginia. But he noted that even with that positive trend, "you are highly likely to see an acceleration in the number of actual completed foreclosures."
Lenders are offering to help some homeowners modify their loans. But many borrowers can't qualify or they are falling back into default. The Obama administration's $75 billion foreclosure prevention effort has made only a small dent in the problem.
About 25 percent of the 1.2 million homeowners who started the program over the past year had received permanent loan modifications as of April. About 23 percent of those enrolled dropped out during a trial phase that lasts at least three months. Many more are in limbo.
Among states, Nevada posted the highest foreclosure rate in May. One in every 79 households there received a foreclosure notice. However, foreclosures there are down 16 percent from a year earlier.
Arizona, Florida, California and Michigan were next among states with the highest foreclosure rates. Rounding out the top 10 were Georgia, Idaho, Illinois, Utah and Maryland.
Las Vegas continued to be the city with the nation's highest foreclosure rate, but activity there was down 18 percent from a year earlier. And nine out of the top 10 cities with the highest foreclosure rates posted annual declines. The exception was the Vallejo-Fairfield area in California, where foreclosures were up 1 percent from a year ago.
Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties. That's a concern for local communities, and a drag on the economic recovery.
In recent months, home prices have started to sink again after stabilizing last summer. Economists at Goldman Sachs predicted in a report last week that prices will fall about 3 percent nationally over the next year, with the largest declines in cities where mortgage defaults are rising.
"The housing market remains plagued by enormous excess supply," wrote Goldman economist Sven Jari Stehn.
Thursday, June 10, 2010
Gourmet Food Carts Come to Cleveland
Recently, Cleveland Public Art, Zygote Press and other partners held an event to celebrate the launch of a new "food cart" program in Cleveland. The idea is to bring healthier alternatives to Cleveland neighborhoods, most notably downtown and University Circle. One of the first of the food vendors in Cleveland (albeit in a truck, not a cart, and not officially in the city's program) are Dim and Den Sum. Stay tuned for more info about the city's new food cart program - and look for expanded food options on the street next time you're about town!
* * *
Q&A: The guys behind Dim and Den Sum
Duo brings first food truck to Cleveland
By Janet Nguyen
Metromix
April 27, 2010
Two long-time friends have reunited to bring a popular food concept on both the East and West Coasts to Cleveland.
Three years ago, Jeremy Esterly, 34, and Chris Hodgson, 24, met while working at Fire Food & Drink in Shaker Square. They became fast friends and stayed in touch even after Hodgson moved to New York City to work at The Spotted Pig. But an idea—now a reality—recently brought Hodgson back home to work with Esterly on this new concept—and when we say new, we mean new to Cleveland.
We're talking food trucks.
What is a food truck? It's exactly that. A truck that serves food. And nothing on the Dim and Den Sum menu is more than $6. The truck is slated to start serving food next month. What kind of food, you ask? Locally-sourced comfort food with an Asian twist to the lunch and late night crowds in and around Cleveland. Where in Cleveland? Well, you'll need to follow them on Twitter and Facebook to find out their exact location on any given day. Just look for the brightly-colored truck with a red, maniacal-looking octopus painted on the side.
When did you two come up with the idea of bringing a food truck to Cleveland?
CH: It was probably about four months ago when we decided to team up. We had ideas about it separately probably half a year ago. When I came back to visit, we talked about it and decided to go with it.
JE: We worked together previously for like six months about three years ago and we hit it off pretty well and had a bunch of ideas then. It was really crazy. We were both talking about it at the same time. It's a good way to start up a restaurant. You get capital from this and work your way up. We were tired of working in a kitchen, tired of putting in long hours for somebody else and we wanted to do something for ourselves.
CH: It was kind of a new territory for both of us and for Cleveland because they don't have any food trucks. We looked into all the codes and everything ... Cleveland's trying to start a food cart program. We've been in contact with the city getting this going. We wrote a business plan, we found a truck and got the truck here to Cleveland. I moved back to Cleveland about three weeks ago. We've just been focusing all on this and doing menu testing and everything like that so that when we open, we can hit the streets with some awesome food.
How did you come up with the name "Dim and Den Sum?"
CH: Jeremy was drunk. [Jeremy laughs in the background]. He called me up and was like, "Dim and Den Sum" and at first, I was like, "I don't know about that." But then, once I started doing research on dim sum, it became a very playful thing for people to say.
JE: I was drinking a lot and I was throwing a bunch of ideas at him. [Looks at Chris]. What else did we have? Flavor Wagon? It was a bunch of stupid, random things and I was drinking heavily and that's what came out of it. The octopus—everything.
How did you come up with the menu?
CH: The menu took a long time. It's in its fourth iteration, fifth iteration. We started just throwing ideas out there and once we actually saw the truck and bought the truck and saw the equipment, we had to tweak it a little bit more. We wanted to stick with the locally-sourced, still going with the best product, but able to get the food out of the kitchen quick enough so people aren't standing around for 10 minutes. We want to run like four to five minutes. We came up with a fun menu that's got a lot of different ideas, an Asian flare to it, but quick enough that people can order and be gone in three to four minutes.
JE: I spent a lot of time in the South with a lot of comfort food, a lot of soul food. So that's what we tried to stick with—things that would make people comfortable. There's a lot of Midwestern comfort foods—tributes to the Polish boy and stuff like that.
CH: I love Asia. It's my favorite continent I've ever been to. Japan, Korea—all those places—I think the way they cook, their techniques, their attention to detail, the different flavor combinations they do ... it has always influenced me and been an awesome part of my cooking.
JE: We're both really into Asian food. Specifically, I think Korean. There's a lot of Korean stuff on the truck like kimchi slaw, and then we make ketchup out of ramp kimchi that we forage. We forage our own ramps. We're making a huge batch of that now, so that's cool.
Is your menu going to change with the seasons?
CH: Absolutely. Whatever we can get that's the freshest and is being produced at that time, we're going to use that to fill our menu up with new creations.
JE: The Dim of the Day is going to change depending on what we can find seasonally. We'd definitely like to feature ramps because I love ramps. And we're featuring them anyway and that's seasonal, and (spring) is such a short season. It's going to change based on what we find at the market. We'll probably do it on Saturdays—go to the farmer's market in Shaker Square and hit up whatever we can find.
When can we expect to see the truck cruising around Cleveland?
CH: May 10 is our official launch date. There is an event we're doing in the Warehouse District on the 7th. Lunchtime on the 7th we'll be in the Warehouse District if people find their way down there. We want to switch off between University Circle and downtown for lunches. 10 a.m. to 3 p.m. (for lunch) and we want to do late night in Coventry, Ohio City, Tremont and downtown from 10 p.m. to 3 a.m. We have iPhone applications coming out, Blackberry applications coming out. We Twitter, Foursquare and Facebook all of our locations and you can also go on our Web site (coming soon) and we'll have a map on there showing our exact location.
Do you think this concept will catch on in Cleveland?
JE: I think it's going to be huge real fast. We're not pioneers, but we're definitely the first to do it here. I think it's going to catch on real quick and hopefully we can partner up with other people in the future too and help them get going. Nobody moves around (in trucks)—we're different with that. Everything we make ourselves ... that's different too.
CH: I think it's going to catch on. If you go downtown or University Circle, you've got thousands and thousands of people right there. If we're offering food that's a lot better than getting a hot dog or something like that at a lower price that's fast, I think it's going to catch on really well.
What are your future plans for Dim and Den Sum?
CH: We hope to have three (trucks) within three months. All three will be different concepts. We're looking at a couple different trucks right now and a couple different ideas that we got. You should see different concepts coming up pretty soon.
JE: Extending the brand and using it and expanding it to do other things. We'd like to do a restaurant at some point. Just basically using this to fund that.
* * *
Q&A: The guys behind Dim and Den Sum
Duo brings first food truck to Cleveland
By Janet Nguyen
Metromix
April 27, 2010
Two long-time friends have reunited to bring a popular food concept on both the East and West Coasts to Cleveland.
Three years ago, Jeremy Esterly, 34, and Chris Hodgson, 24, met while working at Fire Food & Drink in Shaker Square. They became fast friends and stayed in touch even after Hodgson moved to New York City to work at The Spotted Pig. But an idea—now a reality—recently brought Hodgson back home to work with Esterly on this new concept—and when we say new, we mean new to Cleveland.
We're talking food trucks.
What is a food truck? It's exactly that. A truck that serves food. And nothing on the Dim and Den Sum menu is more than $6. The truck is slated to start serving food next month. What kind of food, you ask? Locally-sourced comfort food with an Asian twist to the lunch and late night crowds in and around Cleveland. Where in Cleveland? Well, you'll need to follow them on Twitter and Facebook to find out their exact location on any given day. Just look for the brightly-colored truck with a red, maniacal-looking octopus painted on the side.
When did you two come up with the idea of bringing a food truck to Cleveland?
CH: It was probably about four months ago when we decided to team up. We had ideas about it separately probably half a year ago. When I came back to visit, we talked about it and decided to go with it.
JE: We worked together previously for like six months about three years ago and we hit it off pretty well and had a bunch of ideas then. It was really crazy. We were both talking about it at the same time. It's a good way to start up a restaurant. You get capital from this and work your way up. We were tired of working in a kitchen, tired of putting in long hours for somebody else and we wanted to do something for ourselves.
CH: It was kind of a new territory for both of us and for Cleveland because they don't have any food trucks. We looked into all the codes and everything ... Cleveland's trying to start a food cart program. We've been in contact with the city getting this going. We wrote a business plan, we found a truck and got the truck here to Cleveland. I moved back to Cleveland about three weeks ago. We've just been focusing all on this and doing menu testing and everything like that so that when we open, we can hit the streets with some awesome food.
How did you come up with the name "Dim and Den Sum?"
CH: Jeremy was drunk. [Jeremy laughs in the background]. He called me up and was like, "Dim and Den Sum" and at first, I was like, "I don't know about that." But then, once I started doing research on dim sum, it became a very playful thing for people to say.
JE: I was drinking a lot and I was throwing a bunch of ideas at him. [Looks at Chris]. What else did we have? Flavor Wagon? It was a bunch of stupid, random things and I was drinking heavily and that's what came out of it. The octopus—everything.
How did you come up with the menu?
CH: The menu took a long time. It's in its fourth iteration, fifth iteration. We started just throwing ideas out there and once we actually saw the truck and bought the truck and saw the equipment, we had to tweak it a little bit more. We wanted to stick with the locally-sourced, still going with the best product, but able to get the food out of the kitchen quick enough so people aren't standing around for 10 minutes. We want to run like four to five minutes. We came up with a fun menu that's got a lot of different ideas, an Asian flare to it, but quick enough that people can order and be gone in three to four minutes.
JE: I spent a lot of time in the South with a lot of comfort food, a lot of soul food. So that's what we tried to stick with—things that would make people comfortable. There's a lot of Midwestern comfort foods—tributes to the Polish boy and stuff like that.
CH: I love Asia. It's my favorite continent I've ever been to. Japan, Korea—all those places—I think the way they cook, their techniques, their attention to detail, the different flavor combinations they do ... it has always influenced me and been an awesome part of my cooking.
JE: We're both really into Asian food. Specifically, I think Korean. There's a lot of Korean stuff on the truck like kimchi slaw, and then we make ketchup out of ramp kimchi that we forage. We forage our own ramps. We're making a huge batch of that now, so that's cool.
Is your menu going to change with the seasons?
CH: Absolutely. Whatever we can get that's the freshest and is being produced at that time, we're going to use that to fill our menu up with new creations.
JE: The Dim of the Day is going to change depending on what we can find seasonally. We'd definitely like to feature ramps because I love ramps. And we're featuring them anyway and that's seasonal, and (spring) is such a short season. It's going to change based on what we find at the market. We'll probably do it on Saturdays—go to the farmer's market in Shaker Square and hit up whatever we can find.
When can we expect to see the truck cruising around Cleveland?
CH: May 10 is our official launch date. There is an event we're doing in the Warehouse District on the 7th. Lunchtime on the 7th we'll be in the Warehouse District if people find their way down there. We want to switch off between University Circle and downtown for lunches. 10 a.m. to 3 p.m. (for lunch) and we want to do late night in Coventry, Ohio City, Tremont and downtown from 10 p.m. to 3 a.m. We have iPhone applications coming out, Blackberry applications coming out. We Twitter, Foursquare and Facebook all of our locations and you can also go on our Web site (coming soon) and we'll have a map on there showing our exact location.
Do you think this concept will catch on in Cleveland?
JE: I think it's going to be huge real fast. We're not pioneers, but we're definitely the first to do it here. I think it's going to catch on real quick and hopefully we can partner up with other people in the future too and help them get going. Nobody moves around (in trucks)—we're different with that. Everything we make ourselves ... that's different too.
CH: I think it's going to catch on. If you go downtown or University Circle, you've got thousands and thousands of people right there. If we're offering food that's a lot better than getting a hot dog or something like that at a lower price that's fast, I think it's going to catch on really well.
What are your future plans for Dim and Den Sum?
CH: We hope to have three (trucks) within three months. All three will be different concepts. We're looking at a couple different trucks right now and a couple different ideas that we got. You should see different concepts coming up pretty soon.
JE: Extending the brand and using it and expanding it to do other things. We'd like to do a restaurant at some point. Just basically using this to fund that.
Friday, June 4, 2010
Whoah! Mortgage Rates Drop to 4.78%, the Lowest Level This Year
WASHINGTON -- Turmoil in the stock market and the European debt crisis are making life easier for American homebuyers and families looking to refinance: Mortgage rates are inching closer to a record low.
The window of opportunity may close soon. Home loan rates will rise if investors grow more confident and shift money out of the safety of government bonds, which influence mortgage rates.
For now, though, rates are tantalizingly low. The average 30-year fixed-rate loan sank to 4.78 percent this week, the lowest this year and barely above the record of 4.71 percent set in December. And 15-year loans are at their lowest rates in two decades.
"Strike now," suggested Greg McBride, senior financial analyst at Bankrate.com.
Some homeowners are doing just that. Applications to refinance surged this week to the highest level in seven months, the Mortgage Bankers Association said.
Anxiety over the European crisis has caused global investors to snap up Treasury bonds, which they view as much safer than other investments. Treasury yields have fallen as a result, taking mortgage rates down, too.
When the crisis eases, and especially if the American economy recovery stays on track, expect investors to move out of bonds and back into stocks. That would make mortgages more expensive.
"If the economy finally really shows sustained improvement, rates are definitely going to go up," said Fred Chamberlin, a consultant with Alpine Mortgage Planning in Eugene, Ore.
He suggests that homeowners looking to refinance move fast and not hold out for even lower rates. "If you want the bottom, the only way you're going to know it is when you've missed it," Chamberlin said.
Refinancing isn't right for everyone who qualifies. It typically costs several thousand dollars in fees. Experts suggest calculating how long it will take to recover those fees with the lower loan rate.
As cheap as mortgages are these days, the number of loans being taken out to buy homes remains at its lowest point in more than 13 years. One reason is that a special tax credit for homebuyers expired last month. Many people had rushed to sign contracts by then.
Another obstacle: trouble qualifying for a mortgage. Borrowers need solid credit and a down payment of at least 3.5 percent. Banks tightened lending standards after millions of borrowers fell into default and foreclosure during the housing bust.
"They're really looking with a magnifying glass," said Steve Mevorah, a loan officer with Icon Mortgage Inc. in Las Vegas. "They're trying to make sure that they are flawless loans."
Analysts had expected mortgage rates to rise when the government ended a program designed to bolster the housing market. Instead, they fell because of fears that Greece would default on its debt.
Also keeping rates low is the government's decision last year to provide unlimited support through 2012 for Freddie Mac and Fannie Mae, which buy mortgages and package them into securities and help keep rates low.
Investors "are very comfortable with the guarantee that is in place," notes Credit Suisse mortgage strategist Mahesh Swaminathan. "That, for all practical purposes, is very strong government support."
Since the financial crisis ended, mortgages of all types have become more affordable -- from the 30-year fixed to adjustable varieties.
The premium that borrowers pay to take out "jumbo" loans for more expensive homes has dropped by a full percentage point since late 2008, to just 0.8 percent, for instance.
The window of opportunity may close soon. Home loan rates will rise if investors grow more confident and shift money out of the safety of government bonds, which influence mortgage rates.
For now, though, rates are tantalizingly low. The average 30-year fixed-rate loan sank to 4.78 percent this week, the lowest this year and barely above the record of 4.71 percent set in December. And 15-year loans are at their lowest rates in two decades.
"Strike now," suggested Greg McBride, senior financial analyst at Bankrate.com.
Some homeowners are doing just that. Applications to refinance surged this week to the highest level in seven months, the Mortgage Bankers Association said.
Anxiety over the European crisis has caused global investors to snap up Treasury bonds, which they view as much safer than other investments. Treasury yields have fallen as a result, taking mortgage rates down, too.
When the crisis eases, and especially if the American economy recovery stays on track, expect investors to move out of bonds and back into stocks. That would make mortgages more expensive.
"If the economy finally really shows sustained improvement, rates are definitely going to go up," said Fred Chamberlin, a consultant with Alpine Mortgage Planning in Eugene, Ore.
He suggests that homeowners looking to refinance move fast and not hold out for even lower rates. "If you want the bottom, the only way you're going to know it is when you've missed it," Chamberlin said.
Refinancing isn't right for everyone who qualifies. It typically costs several thousand dollars in fees. Experts suggest calculating how long it will take to recover those fees with the lower loan rate.
As cheap as mortgages are these days, the number of loans being taken out to buy homes remains at its lowest point in more than 13 years. One reason is that a special tax credit for homebuyers expired last month. Many people had rushed to sign contracts by then.
Another obstacle: trouble qualifying for a mortgage. Borrowers need solid credit and a down payment of at least 3.5 percent. Banks tightened lending standards after millions of borrowers fell into default and foreclosure during the housing bust.
"They're really looking with a magnifying glass," said Steve Mevorah, a loan officer with Icon Mortgage Inc. in Las Vegas. "They're trying to make sure that they are flawless loans."
Analysts had expected mortgage rates to rise when the government ended a program designed to bolster the housing market. Instead, they fell because of fears that Greece would default on its debt.
Also keeping rates low is the government's decision last year to provide unlimited support through 2012 for Freddie Mac and Fannie Mae, which buy mortgages and package them into securities and help keep rates low.
Investors "are very comfortable with the guarantee that is in place," notes Credit Suisse mortgage strategist Mahesh Swaminathan. "That, for all practical purposes, is very strong government support."
Since the financial crisis ended, mortgages of all types have become more affordable -- from the 30-year fixed to adjustable varieties.
The premium that borrowers pay to take out "jumbo" loans for more expensive homes has dropped by a full percentage point since late 2008, to just 0.8 percent, for instance.
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