60 Minutes Correspondent Steve Kroft reports on the U.S. subprime mortgage meltdown and how it affects capital markets worldwide.

For more on this see:
[CBS 60 Minutes] House Of Cards: The Mortgage Mess
House Of Cards: The Mortgage Mess
60 Minutes: House of Cards

You may be loosing your house, but there is a resolution. The newest plan is to “reach out to borrowers” and give them the information they need to save their houses. The goal is to let borrowers know what programs are out there that may help them keep their homes. But are the homeowners who are embarrassed by the fact that they can’t pay their mortgage going to bite?

For more on this:
Operation HOPE Mortgage Crisis Initiative Gets Boost From Neighborworks America
Jack O’Connell and Jean Chatzky: Combating California’s financial literacy crisis
Foreclosure aid plan outlined

Resources:
Avoid Foreclosure with a Forbearance Mortgage
How to Protect Yourself From Mortgage Defaults

Mortgage rates edged lower this week, as the prevailing drift of housing news could be seen as good or bad, depending on the perspective.

• Home prices in the first quarter of 2008 were reported to have fallen by 7.7% from the same period a year ago
• Foreclosures for the month of April were reported to be up 65% from one year earlier
• Inflation for April came in at a relatively mild 0.2%

In other words, more bad news for homeowners — at least some of them — but good news for potential home buyers.

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The past week was chock full of news affecting the mortgage and housing markets:

• Foreclosure notices were reported to have increased by 112% over the past year
• Housing prices nationally were reported to have declined by 12.7% over the past year
• Economic growth for the first quarter of 2008 remained positive, if anemic
• The Federal Reserve cut interest rates for the seventh time in as many months

In short, a clouded economic picture continues to make this a buyer’s market for financially sound house hunters.

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Bankruptcy judges are uncovering some rather, well, icky practices in the mortgage servicing industry. Excessive fees, lack of notice before starting foreclosure proceedings, and incorrect application of payments are just some of the goings-on at some mortgage giants, according to the International Tribune. In one case a bank charged an elderly woman $465.36 in late fees and charges for missing a single $554.11 mortgage payment! In another, the lender asked a bankruptcy court to allow it to foreclose on a couple in bankruptcy because there was no equity in the home.  When that is the case lenders are allowed to foreclose in order to minimize their costs.  However, in this case the borrowers had $120,000 in equity and they were given no notice of the foreclosure by the bank! The judge in the case found there was an abuse of process and ordered the lender to pay the homeowners’ legal fees. The bottom line is this: if bankruptcy judges are finding lenders to be unethical when dealing with borrowers in bankruptcy, might the loan servicers also be conning the rest of us? Borrowers should make it a priority to look their statements over, check for unexpected fees, and make sure that their impounded taxes and insurance are calculated correctly.