On the Market: Homeowners reducing principle loan amount | SteamboatToday.com

On the Market: Homeowners reducing principle loan amount

— Freddie Mac reports that a growing number of homeowners refinancing their mortgages are choosing to take the occasion to reduce their principle balance.

In the fourth quarter of 2010, 46 percent of homeowners who refinanced their first-lien home mortgage lowered their principal balance by paying-in additional money at the closing table, according to Freddie Mac. This is the highest “cash-in” share since Freddie Mac began keeping records on refinancing patterns in 1985.

“Cash-out” borrowers, those that increased their loan balance by at least 5 percent, represented 16 percent of all refinance loans — the lowest cash-out share since the analysis began in 1985. The average cash-out share in the past 25 years has been 62 percent.

Alpine Bank of Colorado reports $48 million loss

The Aspen Times

Alpine Banks of Colo­rado lost $48.18 million in 2010 as it continued to shed bad loans and other assets that went sour during the recession, President and Vice Chairman Glen Jammaron said.

Alpine Bank, like many banks in the country, saw its non-performing loans soar in 2009 and last year as the wrath of the recession was felt. Some loans made for real estate acquisition and development couldn’t be paid off by borrowers. Loans often were secured by property, which ended up back in the hands of the bank through foreclosures and other steps.

Jammaron said the bank isn’t in the real estate business, so it tries to clear the troubled assets off its books as quickly as possible. Alpine has sold some property at a loss and held auctions for other properties.

The bank’s strategy was to respond to the problem as quickly as possible rather than spread the financial pain out throughout several years. So in 2010, the bank wrote off nearly $90 million in loans, he said.

“We wanted to put the bad year behind us in one year,” Jammaron said. “We want to make sure we make money in 2011.”

It is inevitable that more loans will have to be written off in 2011 and even in 2012 as some borrowers struggling to make payments find they cannot do it. “We know we’re not done,” he said.

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