Higher interest rates put the brakes on mortgage refinancing this week, according to Freddie Mac.
The firm's weekly survey pegged interest on 30-year fixed mortgages at an average of 5.59 percent -- up from 5.29 percent last week and the highest rate since November 2008.
Other rates also climbed:
Interest climbed to 5.06 percent from 4.79 percent for 15-year fixed loans;
5.17 percent from 4.85 percent for five-year, adjustable-rate mortgages;
5.04 percent from 4.81 percent for one-year ARMs.
Freddie Mac chief economist Frank Nothaft says the gains are not affecting home purchase loans.
Showing posts with label Mortgage Information. Show all posts
Showing posts with label Mortgage Information. Show all posts
Monday, June 15, 2009
Thursday, June 11, 2009
FHA Tax Credit Monetization Helps Home Buyers With Upfront Costs
RISMEDIA, June 11, 2009-First-time home buyers who would otherwise qualify for the $8,000 tax credit, but don’t have the money for a down payment or closing fees, may now be able to get a loan to help cover those upfront costs.
The U.S. Department of Housing and Urban Development (HUD) announced on May 29 that the Federal Housing Administration (FHA) will allow state housing finance agencies to provide second mortgages “monetizing” the tax credit so that borrowers can use the funds toward their down payments and closing costs for the purchase of homes with FHA-insured mortgage loans.
“This is great news for thousands of families who want to take advantage of today’s low interest rates, competitive prices, great selection and the federal tax credit that is only available until Nov. 30, but could not save enough money for a down payment and closing costs,” said National Association of Home Builders Chairman Joe Robson, a home builder from Tulsa, Okla.
HUD also announced that FHA-approved lenders may purchase the tax credit from the home buyer in advance, so that the home buyer can use the funds for closing costs or to make a down payment in addition to the 3.5% minimum. Home buyers who go directly to FHA-approved lenders will still need to come up with the 3.5% minimum down payment that is required for an FHA-insured loan.
Home buyers previously would be able to use the funds from the tax credit only after filing their federal tax returns and had to come up with the pre-purchase costs on their own.
NAHB estimates that 40,000 more homes will be purchased due to the new FHA monetization program, in addition to the 160,000 sales already expected as a result of the tax credit.
The National Council of State Housing Agencies has a list of states offering first time home buyer tax credit loan programs on their website, www.ncsha.org.
For information on the $8,000 first-time home buyer tax credit, go to www.federalhousingtaxcredit.com.
The U.S. Department of Housing and Urban Development (HUD) announced on May 29 that the Federal Housing Administration (FHA) will allow state housing finance agencies to provide second mortgages “monetizing” the tax credit so that borrowers can use the funds toward their down payments and closing costs for the purchase of homes with FHA-insured mortgage loans.
“This is great news for thousands of families who want to take advantage of today’s low interest rates, competitive prices, great selection and the federal tax credit that is only available until Nov. 30, but could not save enough money for a down payment and closing costs,” said National Association of Home Builders Chairman Joe Robson, a home builder from Tulsa, Okla.
HUD also announced that FHA-approved lenders may purchase the tax credit from the home buyer in advance, so that the home buyer can use the funds for closing costs or to make a down payment in addition to the 3.5% minimum. Home buyers who go directly to FHA-approved lenders will still need to come up with the 3.5% minimum down payment that is required for an FHA-insured loan.
Home buyers previously would be able to use the funds from the tax credit only after filing their federal tax returns and had to come up with the pre-purchase costs on their own.
NAHB estimates that 40,000 more homes will be purchased due to the new FHA monetization program, in addition to the 160,000 sales already expected as a result of the tax credit.
The National Council of State Housing Agencies has a list of states offering first time home buyer tax credit loan programs on their website, www.ncsha.org.
For information on the $8,000 first-time home buyer tax credit, go to www.federalhousingtaxcredit.com.
Wednesday, June 10, 2009
Mortgage Rates Rise for Second Straight Week
RISMEDIA, June 10, 2009-The weekly average rate borrowers were quoted on Zillow Mortgage Marketplace for 30-year fixed mortgages increased last week to 5.48%, up from 5.25% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by leading real estate website Zillow.com(R). Meanwhile, rates for 15-year fixed mortgages rose to 4.95% from 4.78%, and 5-1 adjustable rate mortgages rose to 4.62% from 4.48% the week prior.
Mortgage Type Average Rate Average Rate
Week ending 6/7/09 Week ending 5/31/09 % Change
30-year fixed 5.48% 5.25% 4.4%
15-year fixed 4.95% 4.78% 3.6%
5-1 ARM 4.62% 4.48% 3.1%
On Monday, rates for 30-year fixed purchase mortgages rose further, with the average rate on Zillow Mortgage Marketplace at 5.62%. For current, up-to-the-minute rates, visit www.zillow.com/Mortgage_Rates/.
Thirty-year fixed mortgage rates varied by state. Georgia mortgage rates and Missouri mortgage rates increased the most, from 5.15% to 5.48% in Georgia and from 5.25% to 5.53% in Missouri. New York mortgage rates and Massachusetts mortgage rates were the highest, at 5.56% and 5.55%, respectively. Florida mortgage rates were the lowest, at 5.44%. California mortgage rates were the most requested among all states.
State Average 30-yr . Average 30-yr.
Fixed Rate Fixed Rate
Week ending 6/7/09 Week ending 5/31/09 % Change
Arizona 5.47% 5.25% 4.2%
California 5.45% 5.24% 4.0%
Colorado 5.48% 5.23% 4.8%
Connecticut 5.50% 5.26% 4.6%
Florida 5.44% 5.19% 4.8%
Georgia 5.48% 5.15% 6.4%
Illinois 5.53% 5.28% 4.7%
Maryland 5.52% 5.35% 3.2%
Massachusetts 5.55% 5.30% 4.7%
Michigan 5.48% 5.21% 5.2%
Minnesota 5.51% 5.28% 4.4%
Missouri 5.53% 5.25% 5.3%
New Jersey 5.45% 5.24% 4.0%
New York 5.56% 5.29% 5.1%
North Carolina 5.52% 5.27% 4.7%
Oregon 5.50% 5.27% 4.4%
Pennsylvania 5.45% 5.26% 3.6%
Texas 5.45% 5.25% 3.8%
Virginia 5.48% 5.23% 4.8%
Washington 5.45% 5.24% 4.0%
Mortgage Type Average Rate Average Rate
Week ending 6/7/09 Week ending 5/31/09 % Change
30-year fixed 5.48% 5.25% 4.4%
15-year fixed 4.95% 4.78% 3.6%
5-1 ARM 4.62% 4.48% 3.1%
On Monday, rates for 30-year fixed purchase mortgages rose further, with the average rate on Zillow Mortgage Marketplace at 5.62%. For current, up-to-the-minute rates, visit www.zillow.com/Mortgage_Rates/.
Thirty-year fixed mortgage rates varied by state. Georgia mortgage rates and Missouri mortgage rates increased the most, from 5.15% to 5.48% in Georgia and from 5.25% to 5.53% in Missouri. New York mortgage rates and Massachusetts mortgage rates were the highest, at 5.56% and 5.55%, respectively. Florida mortgage rates were the lowest, at 5.44%. California mortgage rates were the most requested among all states.
State Average 30-yr . Average 30-yr.
Fixed Rate Fixed Rate
Week ending 6/7/09 Week ending 5/31/09 % Change
Arizona 5.47% 5.25% 4.2%
California 5.45% 5.24% 4.0%
Colorado 5.48% 5.23% 4.8%
Connecticut 5.50% 5.26% 4.6%
Florida 5.44% 5.19% 4.8%
Georgia 5.48% 5.15% 6.4%
Illinois 5.53% 5.28% 4.7%
Maryland 5.52% 5.35% 3.2%
Massachusetts 5.55% 5.30% 4.7%
Michigan 5.48% 5.21% 5.2%
Minnesota 5.51% 5.28% 4.4%
Missouri 5.53% 5.25% 5.3%
New Jersey 5.45% 5.24% 4.0%
New York 5.56% 5.29% 5.1%
North Carolina 5.52% 5.27% 4.7%
Oregon 5.50% 5.27% 4.4%
Pennsylvania 5.45% 5.26% 3.6%
Texas 5.45% 5.25% 3.8%
Virginia 5.48% 5.23% 4.8%
Washington 5.45% 5.24% 4.0%
Friday, June 5, 2009
Mortgage Rates Hit 25-Week High
Mortgage rates across the board jumped this week, with conventional mortgages reaching their highest point so far this year.
Freddie Mac reports a jump in the 30-year fixed mortgage rate to a 25-week high of 5.29 percent during the week ended June 4, up from 4.91 percent the prior week. As recently as two months ago, rates had been 4.78 percent.
The 15-year fixed rate also increased, rising to 4.79 percent from 4.53 percent, with Freddie Mac chief economist Frank Nothaft indicating that the gains follow a surge in long-term bond yields.
Meanwhile, the five-year adjustable mortgage rate climbed to 4.85 percent from 4.82 percent, and the one-year ARM surged to 4.81 percent from 4.69 percent.
Source: Chicago Sun-Times, Francine Knowles (06/05/09)
Freddie Mac reports a jump in the 30-year fixed mortgage rate to a 25-week high of 5.29 percent during the week ended June 4, up from 4.91 percent the prior week. As recently as two months ago, rates had been 4.78 percent.
The 15-year fixed rate also increased, rising to 4.79 percent from 4.53 percent, with Freddie Mac chief economist Frank Nothaft indicating that the gains follow a surge in long-term bond yields.
Meanwhile, the five-year adjustable mortgage rate climbed to 4.85 percent from 4.82 percent, and the one-year ARM surged to 4.81 percent from 4.69 percent.
Source: Chicago Sun-Times, Francine Knowles (06/05/09)
Tuesday, June 2, 2009
Tax Credit, Low Interest, and Big Inventory Lure Rookies into Housing Market
By Steve Campbell
RISMEDIA, June 2, 2009-(MCT)-Even in a sputtering economy, one segment of the U.S. housing market is feeling a bounce. First-time home buyers-loaded for bear with a new $8,000 tax credit, historically low interest rates and a big inventory to choose from-are happily diving into domestic life, according to real estate agents, economists and mortgage lenders.
Craig Brown, a 26-year-old marketing developer for an online sales company, feels as if he were getting a free, federally funded fresh start.
“The tax credit was what brought me into the house hunt. I could pay off my debt and get an extremely low loan rate. I couldn’t pass it up,” he said.
The $8,000 tax credit for first-time buyers, passed by Congress as part of its plan to jump-start the slumping U.S. housing market, has new graduates, newlyweds and young professionals alike scrambling to get their financial houses in order-sometimes with the help of their parents-to purchase a home by the program’s Dec. 1 deadline.
The tax credit does not have to be repaid by buyers who live in the home for at least three years.
The tax credit got even more attractive Friday, when Housing and Urban Development Secretary Shaun Donovan announced that the Federal Housing Administration will allow first-time buyers to apply the credit toward the purchase costs of an FHA-insured home.
That move allows state housing finance agencies and some nonprofits to “monetize” the tax credit so buyers can apply it toward their down payments, according to a HUD news release.
The National Association of Home Builders estimates that the tax credit will stimulate 160,000 home sales nationwide-101,000 of which will be by first-time buyers. Fifty-nine thousand homeowners will then be able to buy another house because a first-time buyer purchased theirs.
“It’s really a big deal,” said Linda Davidson of Service First Mortgage Co. in Garland, Texas. “The $8,000 tax credit is making things crazy. In almost every conversation we have with borrowers, it comes up. Even if they are not first-time buyers, they ask about it. Everybody wants it.”
But not everyone can get it.
The program is open only to people who have not owned a principal residence for three years before the purchase, Davidson said.
There are also income limitations, but they are fairly generous: Single taxpayers with incomes of up to $75,000 and married couples with incomes of up to $150,000 qualify for the full tax credit. Singles with incomes below $95,000 and married couples with incomes below $170,000 can be eligible for a partial credit.
‘Surgical impact’
The tax credit is “driving interest” nationwide, said Lawrence Yun, senior economist for the National Association of Realtors.
“In our most recent data from a month ago, we found that roughly half of all home buyers were first-time buyers. That is much higher than the usual one-third to 40% of first-time buyers in a normal market,” Yun said.
He said qualitative data suggest that the tax credit is also increasing foot traffic at open houses and phone inquiries to brokerage agencies.
“This is one program coming out of Washington that is apparently having a surgical impact on getting first-time buyers back in the market,” he said.
“That’s definitely one factor that has improved our market,” said Ruth Story, a broker associate at Keller Williams Realty. “This is the busiest second quarter I’ve seen in 25 years. It’s a combination of things: The low interest rates are very attractive, the tax credit combined with that and the fact that buyers still view our market as being affordable.”
Peer demographic
It’s a nice niche market for a young real estate agent like Grace Taylor, a 26-year-old agent at Helen Painter Group Realtors who is working with four first-time buyers ages 25 to 30.
“They all know it’s a great time to buy and that interest rates are low. But when someone is giving you free money, it pushes them over the edge,” Taylor said.
Nathan McDaniel, a 23-year-old loan officer at Cendera Funding, is also tapping his peer demographic. He says his age helps him connect with younger buyers, who make up a large part of his business. And all of them are interested in snagging the tax credit, he said.
“It really seems anyone who was thinking about getting a place is moving up their timetable so they can get it,” McDaniel said. “Even people who don’t have the down payment, they are getting gift funds from relatives so they can take advantage of it.”
He has made several loans to recent college graduates who were initially holding off “to see if they were going to get married.” Two of them bought a home, McDaniel said. “The tax credit has speeded up the timeline of age and lifestyle,” he said.
Prabhath Boya, a 28-year-old Fort Worth attorney, shopped for a house last year but didn’t find what he wanted. After a “hard” 3 1/2 -week hunt, however, he now has a house near TCU under contract.
“I’ve been living in an apartment for almost two years and looking at interest rates and opportunities,” Boya said. “This is as good a time as anyone can imagine, rates-wise and pricing-wise.”
‘Weeded out’
The national housing meltdown has spurred tougher lending restrictions, culling the herd of would-be first-timers with less-than-stellar credit.
When the tax credit was announced in February, Davidson said her office was flooded with people who wanted to pre-qualify for loans. Unfortunately, most of them are still renters.
“It was overwhelming. Our pre-qualifies were double what we see in a normal month-but 70% of them didn’t qualify,” she said.
Now that the bad applicants have been “weeded out,” Davidson said she’s qualifying people who have done their homework and have their finances in order.
Story is seeing the same thing.
“It’s a different kind of first-time buyer,” she said. “The credit restrictions are so tight, so we are seeing real quality buyers. The profile of the first-time buyers has changed. They have been waiting, watching and saving. And they are ready when the right house comes along.”
Michael and Ambra Cole fit that profile. After living in Switzerland for five years, they moved to Fort Worth in July 2007 when Michael, 36, went to work as a management professor at the Neeley School of Business at TCU. Ambra, 34, works as an account manager for an employment agency.
The couple spent nearly two years saving, watching the market and scouting locations. They scoured Internet listings and then viewed about 25 houses over four months before the right home popped up in the Berkeley Place neighborhood near TCU.
They were the first house hunters to see the home, and they quickly cut a deal. Location and resale value were the prime attractions, Michael Cole said.
“We really tried to do our homework in advance rather than falling in love with the first house we saw,” he said. “The low interest rates, the right house in the right neighborhood — it all came together.”
Within budget
Yun says first-time buyers nationwide seem to have adapted to a more realistic view of real estate.
“We are seeing more lower-price home transactions,” he said. “The lower price point sales indicate to me that many homeowners are trying to stay within their budgets.
“The old-fashioned American way was that one starts in a starter home and after a few years people build equity and trade up,” Yun said. “That is the old-fashioned way to accumulate wealth without stretching themselves. I think we are moving back into that stage, and that’s healthy.”
Craig Brown, the young house hunter, is a model for that new long-run reality.
“The reason that I didn’t buy before was that I would have been stretching myself too thin,” he said. “I didn’t want to be in a position of having no room for error.”
He’s already looking ahead even as he searches for a home in the $130,000 to $140,000 range in Carrollton and north Dallas. And flipping that first house isn’t part of the equation.
“I’m thinking about finding a couple of roommates, and that can pay my mortgage,” he said. “And whenever I get married, I can use this property as a rental property.”
The $8,000 tax credit - key elements of the 2009 First-Time Home Buyer Tax Credit:
Who qualifies?
- First-time home buyers who have bought or will buy between Jan. 1 and Dec. 1. The IRS defines a first-time home buyer as someone who has not owned a principal residence during the last three years.
- The credit does not have to be repaid if the buyer occupies the home for at least three years.
- The credit is 10% of the home’s purchase price, up to $8,000.
- The credit may be applied to primary residences, including single-family homes, condos, town homes and co-ops.
Copyright © 2009, Fort Worth Star-Telegram, Texas
Distributed by McClatchy-Tribune Information Services.
Read more: "Tax Credit, Low Interest, and Big Inventory Lure Rookies into Housing Market | RISMedia" - http://rismedia.com/2009-06-01/tax-credit-low-interest-and-big-inventory-lure-rookies-into-housing-market/#ixzz0HKE0GKNM&A
RISMEDIA, June 2, 2009-(MCT)-Even in a sputtering economy, one segment of the U.S. housing market is feeling a bounce. First-time home buyers-loaded for bear with a new $8,000 tax credit, historically low interest rates and a big inventory to choose from-are happily diving into domestic life, according to real estate agents, economists and mortgage lenders.
Craig Brown, a 26-year-old marketing developer for an online sales company, feels as if he were getting a free, federally funded fresh start.
“The tax credit was what brought me into the house hunt. I could pay off my debt and get an extremely low loan rate. I couldn’t pass it up,” he said.
The $8,000 tax credit for first-time buyers, passed by Congress as part of its plan to jump-start the slumping U.S. housing market, has new graduates, newlyweds and young professionals alike scrambling to get their financial houses in order-sometimes with the help of their parents-to purchase a home by the program’s Dec. 1 deadline.
The tax credit does not have to be repaid by buyers who live in the home for at least three years.
The tax credit got even more attractive Friday, when Housing and Urban Development Secretary Shaun Donovan announced that the Federal Housing Administration will allow first-time buyers to apply the credit toward the purchase costs of an FHA-insured home.
That move allows state housing finance agencies and some nonprofits to “monetize” the tax credit so buyers can apply it toward their down payments, according to a HUD news release.
The National Association of Home Builders estimates that the tax credit will stimulate 160,000 home sales nationwide-101,000 of which will be by first-time buyers. Fifty-nine thousand homeowners will then be able to buy another house because a first-time buyer purchased theirs.
“It’s really a big deal,” said Linda Davidson of Service First Mortgage Co. in Garland, Texas. “The $8,000 tax credit is making things crazy. In almost every conversation we have with borrowers, it comes up. Even if they are not first-time buyers, they ask about it. Everybody wants it.”
But not everyone can get it.
The program is open only to people who have not owned a principal residence for three years before the purchase, Davidson said.
There are also income limitations, but they are fairly generous: Single taxpayers with incomes of up to $75,000 and married couples with incomes of up to $150,000 qualify for the full tax credit. Singles with incomes below $95,000 and married couples with incomes below $170,000 can be eligible for a partial credit.
‘Surgical impact’
The tax credit is “driving interest” nationwide, said Lawrence Yun, senior economist for the National Association of Realtors.
“In our most recent data from a month ago, we found that roughly half of all home buyers were first-time buyers. That is much higher than the usual one-third to 40% of first-time buyers in a normal market,” Yun said.
He said qualitative data suggest that the tax credit is also increasing foot traffic at open houses and phone inquiries to brokerage agencies.
“This is one program coming out of Washington that is apparently having a surgical impact on getting first-time buyers back in the market,” he said.
“That’s definitely one factor that has improved our market,” said Ruth Story, a broker associate at Keller Williams Realty. “This is the busiest second quarter I’ve seen in 25 years. It’s a combination of things: The low interest rates are very attractive, the tax credit combined with that and the fact that buyers still view our market as being affordable.”
Peer demographic
It’s a nice niche market for a young real estate agent like Grace Taylor, a 26-year-old agent at Helen Painter Group Realtors who is working with four first-time buyers ages 25 to 30.
“They all know it’s a great time to buy and that interest rates are low. But when someone is giving you free money, it pushes them over the edge,” Taylor said.
Nathan McDaniel, a 23-year-old loan officer at Cendera Funding, is also tapping his peer demographic. He says his age helps him connect with younger buyers, who make up a large part of his business. And all of them are interested in snagging the tax credit, he said.
“It really seems anyone who was thinking about getting a place is moving up their timetable so they can get it,” McDaniel said. “Even people who don’t have the down payment, they are getting gift funds from relatives so they can take advantage of it.”
He has made several loans to recent college graduates who were initially holding off “to see if they were going to get married.” Two of them bought a home, McDaniel said. “The tax credit has speeded up the timeline of age and lifestyle,” he said.
Prabhath Boya, a 28-year-old Fort Worth attorney, shopped for a house last year but didn’t find what he wanted. After a “hard” 3 1/2 -week hunt, however, he now has a house near TCU under contract.
“I’ve been living in an apartment for almost two years and looking at interest rates and opportunities,” Boya said. “This is as good a time as anyone can imagine, rates-wise and pricing-wise.”
‘Weeded out’
The national housing meltdown has spurred tougher lending restrictions, culling the herd of would-be first-timers with less-than-stellar credit.
When the tax credit was announced in February, Davidson said her office was flooded with people who wanted to pre-qualify for loans. Unfortunately, most of them are still renters.
“It was overwhelming. Our pre-qualifies were double what we see in a normal month-but 70% of them didn’t qualify,” she said.
Now that the bad applicants have been “weeded out,” Davidson said she’s qualifying people who have done their homework and have their finances in order.
Story is seeing the same thing.
“It’s a different kind of first-time buyer,” she said. “The credit restrictions are so tight, so we are seeing real quality buyers. The profile of the first-time buyers has changed. They have been waiting, watching and saving. And they are ready when the right house comes along.”
Michael and Ambra Cole fit that profile. After living in Switzerland for five years, they moved to Fort Worth in July 2007 when Michael, 36, went to work as a management professor at the Neeley School of Business at TCU. Ambra, 34, works as an account manager for an employment agency.
The couple spent nearly two years saving, watching the market and scouting locations. They scoured Internet listings and then viewed about 25 houses over four months before the right home popped up in the Berkeley Place neighborhood near TCU.
They were the first house hunters to see the home, and they quickly cut a deal. Location and resale value were the prime attractions, Michael Cole said.
“We really tried to do our homework in advance rather than falling in love with the first house we saw,” he said. “The low interest rates, the right house in the right neighborhood — it all came together.”
Within budget
Yun says first-time buyers nationwide seem to have adapted to a more realistic view of real estate.
“We are seeing more lower-price home transactions,” he said. “The lower price point sales indicate to me that many homeowners are trying to stay within their budgets.
“The old-fashioned American way was that one starts in a starter home and after a few years people build equity and trade up,” Yun said. “That is the old-fashioned way to accumulate wealth without stretching themselves. I think we are moving back into that stage, and that’s healthy.”
Craig Brown, the young house hunter, is a model for that new long-run reality.
“The reason that I didn’t buy before was that I would have been stretching myself too thin,” he said. “I didn’t want to be in a position of having no room for error.”
He’s already looking ahead even as he searches for a home in the $130,000 to $140,000 range in Carrollton and north Dallas. And flipping that first house isn’t part of the equation.
“I’m thinking about finding a couple of roommates, and that can pay my mortgage,” he said. “And whenever I get married, I can use this property as a rental property.”
The $8,000 tax credit - key elements of the 2009 First-Time Home Buyer Tax Credit:
Who qualifies?
- First-time home buyers who have bought or will buy between Jan. 1 and Dec. 1. The IRS defines a first-time home buyer as someone who has not owned a principal residence during the last three years.
- The credit does not have to be repaid if the buyer occupies the home for at least three years.
- The credit is 10% of the home’s purchase price, up to $8,000.
- The credit may be applied to primary residences, including single-family homes, condos, town homes and co-ops.
Copyright © 2009, Fort Worth Star-Telegram, Texas
Distributed by McClatchy-Tribune Information Services.
Read more: "Tax Credit, Low Interest, and Big Inventory Lure Rookies into Housing Market | RISMedia" - http://rismedia.com/2009-06-01/tax-credit-low-interest-and-big-inventory-lure-rookies-into-housing-market/#ixzz0HKE0GKNM&A
Thursday, May 28, 2009
Will Downpayment Assistance Help the U.S. Housing Market?
Print Article
RISMEDIA, May 28, 2009-With home prices falling nearly 20% in the first quarter of 2009, Ann Ashburn, president of AmeriDream outlined four reasons why the U.S. economy and the next generation of homeowners would benefit from downpayment assistance funded in part by sellers (DPA). Congress is currently considering H.R. 600, bipartisan legislation that would make DPA an allowable gift source for creditworthy borrowers of Federal Housing Administration loans.
“AmeriDream continues to provide full support to H.R. 600, which will stabilize home values, protect taxpayers, encourage responsible homeownership, and create jobs,” said Ashburn. “These are four compelling reasons to make DPA an important part of our national economic recovery strategy.”
1. Stabilize home values. DPA can help stop the downward spiral in home values across the country by encouraging qualified homebuyers with FHA loans to enter the housing market. An estimated 300,000 homebuyers are eliminated from the housing market every year without DPA programs in place.
2. Protect taxpayers. H.R. 600 allows private partnerships between sellers and non-profits to provide downpayment gifts to qualified homebuyers at no cost to the taxpayer. That makes H.R. 600 a fiscally responsible alternative to government-subsidized downpayment assistance programs being considered by the U.S. Department of Housing & Urban Development.
3. Encourage responsible homeownership. H.R. 600 will enable 300,000 additional families and individuals- all qualified and approved for FHA loans- to become homeowners each year. The bill also requires that DPA recipients be offered homebuyer education courses to help them understand the financial responsibilities of homeownership. Lastly, H.R. 600 implements tougher credit requirements for DPA recipients, strict FHA underwriting guidelines, and stiff penalties for improper home appraisals.
4. Create jobs. DPA will create 235,000 jobs, generate over $4 billion annually in local and state revenues, and provide $2 billion annually in private capital for sustainable homeownership. DPA’s absence prompts fewer home sales, lower home values, more foreclosures, job losses, and lower revenues for cash-strapped local governments. H.R. 600 is a vital mechanism to stabilizing the U.S. housing market.
For more information, visit www.ameridream.org.
RISMEDIA, May 28, 2009-With home prices falling nearly 20% in the first quarter of 2009, Ann Ashburn, president of AmeriDream outlined four reasons why the U.S. economy and the next generation of homeowners would benefit from downpayment assistance funded in part by sellers (DPA). Congress is currently considering H.R. 600, bipartisan legislation that would make DPA an allowable gift source for creditworthy borrowers of Federal Housing Administration loans.
“AmeriDream continues to provide full support to H.R. 600, which will stabilize home values, protect taxpayers, encourage responsible homeownership, and create jobs,” said Ashburn. “These are four compelling reasons to make DPA an important part of our national economic recovery strategy.”
1. Stabilize home values. DPA can help stop the downward spiral in home values across the country by encouraging qualified homebuyers with FHA loans to enter the housing market. An estimated 300,000 homebuyers are eliminated from the housing market every year without DPA programs in place.
2. Protect taxpayers. H.R. 600 allows private partnerships between sellers and non-profits to provide downpayment gifts to qualified homebuyers at no cost to the taxpayer. That makes H.R. 600 a fiscally responsible alternative to government-subsidized downpayment assistance programs being considered by the U.S. Department of Housing & Urban Development.
3. Encourage responsible homeownership. H.R. 600 will enable 300,000 additional families and individuals- all qualified and approved for FHA loans- to become homeowners each year. The bill also requires that DPA recipients be offered homebuyer education courses to help them understand the financial responsibilities of homeownership. Lastly, H.R. 600 implements tougher credit requirements for DPA recipients, strict FHA underwriting guidelines, and stiff penalties for improper home appraisals.
4. Create jobs. DPA will create 235,000 jobs, generate over $4 billion annually in local and state revenues, and provide $2 billion annually in private capital for sustainable homeownership. DPA’s absence prompts fewer home sales, lower home values, more foreclosures, job losses, and lower revenues for cash-strapped local governments. H.R. 600 is a vital mechanism to stabilizing the U.S. housing market.
For more information, visit www.ameridream.org.
Sunday, May 24, 2009
Mortgage Rates Continue to Fall
Freddie Mac reports a drop in the 30-year fixed mortgage rate to 4.82 percent during the week ended May 21 from 4.86 percent the prior week. Meanwhile, the 15-year fixed mortgage rate dipped to 4.5 percent.
The Federal Reserve is working to hold down rates by purchasing upwards of $1.25 trillion in mortgage-backed securities and $300 billion in Treasuries. Mortgage rate premiums have declined substantially over the last couple of months even as Treasury yields climbed.
Source: Investor's Business Daily (05/22/09)
The Federal Reserve is working to hold down rates by purchasing upwards of $1.25 trillion in mortgage-backed securities and $300 billion in Treasuries. Mortgage rate premiums have declined substantially over the last couple of months even as Treasury yields climbed.
Source: Investor's Business Daily (05/22/09)
Saturday, May 2, 2009
7 Tips to Negotiate Your Way to a Mortgage Loan Modification
By Caleb Groos Print Article
RISMEDIA, May 2, 2009-For some small business owners, trouble on the home front (as in home mortgage front) threatens already precarious business conditions. Home mortgages that once seemed a good source of money for the business now could result in the need to layoff workers or even close. Homeowners with trouble making mortgage payments often hear that their best bet is to contact their lender about a loan modification, but they should be well prepared when they do so.
Whether the problem making mortgage payments is short term or long term, the best option for homeowners often is to contact their lender to try to work out a new payment agreement. Lenders are not obligated to make mortgage modifications, however it is often in their interest to work out a feasible payment plan for the homeowner rather than foreclose and sell the property.
The Obama Administration’s Homeowner Affordability and Stability Plan included refinancing of qualifying mortgages owned or securitized by Fannie Mae or Freddie Mac to a lower fixed interest rate. As reported by the Washington Post, the Obama Administration announced that the program will apply to previously excluded second mortgages.
In part to help those outside this program, the Obama plan also included $75 billion in matching cash to encourage lenders to agree to mortgage modifications.
Here are a few tips to keep in mind when seeking a mortgage loan modification:
1. Don’t fall for any mortgage modification scams (such as advanced fee scams).
2. To learn how to best make your case for a loan modification, contact one of the HUD Approved Foreclosure Avoidance Counselors in your area. They can also inform you about any federal, state or local programs that may assist you.
3. Get an accurate picture of your finances. Your best chance at getting a modification is to demonstrate the ability to repay and a thorough understanding of the costs and income you face going forward.
4. If the problem making payments is short-term, ask your lender about forbearance or postponement of payments for a limited period. Be prepared to demonstrate when you’ll be able to start making payments again.
5. If the problem is long term, and what you need is modification, be prepared to make an offer and demonstrate how you could repay the modified loan. Be sure your lender is up to speed on incentive programs that may be available to help.
6. When negotiating a modification, make sure to understand how it will deal with any fees or penalties that may have accrued. Know what fees are in play and whether the modification will eliminate, reduce or tack them on for repayment.
7. If the lender won’t modify and foreclosure looms, consider asking the creditor to “produce the note,” (particularly when a creditor other than the original lender seeks foreclosure). It’s a stalling tactic, but can sometimes encourage creditors to negotiate.
For more information, visit www.findlaw.com.
RISMEDIA, May 2, 2009-For some small business owners, trouble on the home front (as in home mortgage front) threatens already precarious business conditions. Home mortgages that once seemed a good source of money for the business now could result in the need to layoff workers or even close. Homeowners with trouble making mortgage payments often hear that their best bet is to contact their lender about a loan modification, but they should be well prepared when they do so.
Whether the problem making mortgage payments is short term or long term, the best option for homeowners often is to contact their lender to try to work out a new payment agreement. Lenders are not obligated to make mortgage modifications, however it is often in their interest to work out a feasible payment plan for the homeowner rather than foreclose and sell the property.
The Obama Administration’s Homeowner Affordability and Stability Plan included refinancing of qualifying mortgages owned or securitized by Fannie Mae or Freddie Mac to a lower fixed interest rate. As reported by the Washington Post, the Obama Administration announced that the program will apply to previously excluded second mortgages.
In part to help those outside this program, the Obama plan also included $75 billion in matching cash to encourage lenders to agree to mortgage modifications.
Here are a few tips to keep in mind when seeking a mortgage loan modification:
1. Don’t fall for any mortgage modification scams (such as advanced fee scams).
2. To learn how to best make your case for a loan modification, contact one of the HUD Approved Foreclosure Avoidance Counselors in your area. They can also inform you about any federal, state or local programs that may assist you.
3. Get an accurate picture of your finances. Your best chance at getting a modification is to demonstrate the ability to repay and a thorough understanding of the costs and income you face going forward.
4. If the problem making payments is short-term, ask your lender about forbearance or postponement of payments for a limited period. Be prepared to demonstrate when you’ll be able to start making payments again.
5. If the problem is long term, and what you need is modification, be prepared to make an offer and demonstrate how you could repay the modified loan. Be sure your lender is up to speed on incentive programs that may be available to help.
6. When negotiating a modification, make sure to understand how it will deal with any fees or penalties that may have accrued. Know what fees are in play and whether the modification will eliminate, reduce or tack them on for repayment.
7. If the lender won’t modify and foreclosure looms, consider asking the creditor to “produce the note,” (particularly when a creditor other than the original lender seeks foreclosure). It’s a stalling tactic, but can sometimes encourage creditors to negotiate.
For more information, visit www.findlaw.com.
Sunday, April 19, 2009
Federal Housing Rescue Plan Launches
The Obama Administration’s program to rescue distressed home owners got off the ground this week. The program was announced on Feb. 18, but it took several weeks to put the bureaucracy in place.
Six of the nation’s largest banks signed up to participate, the Treasury Department announced Wednesday. They are JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.
Treasury says it is allocating $50 billion to the program. The Department of Housing and Urban Development will provide the rest.
The plan calls for loan servicers to reduce interest rates so a family’s monthly mortgage obligation is no more than 38 percent of its pre-tax income. Loan servicers also can reduce loan balances. After the loans are modified, the government then provides enough money to reduce payments to 31 percent of income.
Participating servicers get $1,000 a year for each modification and another $1,000 a year for three years if the borrower remains current. Servicers get an extra $500 if they do the modifications before the borrower falls behind in his payments—and the borrower gets $1,500. Also, homeowners get $1,000 a year for five years if they remain current on their payments. The money must be used to reduce their principal balances.
Source: CNN, Tami Luhby (04/16/2009)
Six of the nation’s largest banks signed up to participate, the Treasury Department announced Wednesday. They are JPMorgan Chase, Wells Fargo, Citigroup, GMAC Mortgage, Saxon Mortgage Services, and Select Portfolio Servicing.
Treasury says it is allocating $50 billion to the program. The Department of Housing and Urban Development will provide the rest.
The plan calls for loan servicers to reduce interest rates so a family’s monthly mortgage obligation is no more than 38 percent of its pre-tax income. Loan servicers also can reduce loan balances. After the loans are modified, the government then provides enough money to reduce payments to 31 percent of income.
Participating servicers get $1,000 a year for each modification and another $1,000 a year for three years if the borrower remains current. Servicers get an extra $500 if they do the modifications before the borrower falls behind in his payments—and the borrower gets $1,500. Also, homeowners get $1,000 a year for five years if they remain current on their payments. The money must be used to reduce their principal balances.
Source: CNN, Tami Luhby (04/16/2009)
Friday, April 17, 2009
Mortgage Modifications Increasing
RISMEDIA, April 17, 2009-Fannie Mae and Freddie Mac modified nearly 24,000 loans during the fourth quarter of 2008, an increase of 76% over the third quarter. The modifications, along with the suspension of foreclosures that began November 26, reduced the number of foreclosures by nearly 27% during the quarter, according to data released by James B. Lockhart, Director of the Federal Housing Finance Agency (FHFA), as part of the Foreclosure Prevention Report for the fourth quarter for 2008.
The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.
“Fewer homeowners are losing their homes as a result of the foreclosure prevention efforts,” said Director Lockhart. “We expect the numbers of those getting relief to grow further as the Making Home Affordable program picks up speed in coming months.”
The foreclosure prevention options include forbearance plans, payment plans, delinquency advances and loan modifications. Workout options that led to resolution of delinquent accounts, which means the account was either reinstated or removed from the portfolio, increased 15% in the last quarter of 2008.
The report shows that as of Dec. 31, 2008, of the Enterprises’ 30.7 million residential mortgages:
• Modifications represented 34.0% of fourth quarter loss mitigation actions up from 22.2% of the third quarter.
• Completed payment plans represented 19.0% of fourth quarter loss mitigation actions compared to 24.2% of the third quarter.
• Short sales represented 8.9% of fourth quarter loss mitigation actions compared to 7.7% of third quarter.
• Deeds in lieu represented 0.8% of fourth quarter loss mitigation actions compared to 0.7% in the third quarter.
As a result of increased loss mitigation efforts and the foreclosure suspensions, the overall loss mitigation performance ratio (loss mitigation actions as a percentage of mortgages for which foreclosure was likely) for mortgages serviced on behalf of Fannie Mae and Freddie Mac, increased from 55% during the third quarter of 2008 to 65.7% in the fourth quarter. For prime loans, the ratio increased from 45.1% to 54.2%, and for nonprime loans from 64.7% in the third quarter to 75.3% in the fourth quarter.
Suspensions gave servicers more time to work with borrowers in foreclosure who were eligible for the Streamlined Modification Program introduced in early November 2008. The impact of the suspensions caused December 2008 numbers for completed foreclosure and third-party sales to decline and for total loans, 60-plus, and 90-plus-days delinquent loans to increase.
When adjusted to account for foreclosure suspensions, the month-over-month change in the delinquency rates decreased. The month-over-month change in the 60-plus-days delinquency rate from October 2008 to November 2008 was an increase of 14.39%. The month-over-month change from November 2008 to December 2008 was an increase of 9.31%.
For more information, visit www.fanniemae.com or www.freddiemac.com.
The FHFA report details the actions Fannie Mae and Freddie Mac have taken to prevent foreclosures and keep people in their homes. It analyzes data provided by the companies with adjustments to account for the impact of the foreclosure suspension. The suspension, originally set to end Jan. 9, 2009, was later extended to Jan. 31, 2009.
“Fewer homeowners are losing their homes as a result of the foreclosure prevention efforts,” said Director Lockhart. “We expect the numbers of those getting relief to grow further as the Making Home Affordable program picks up speed in coming months.”
The foreclosure prevention options include forbearance plans, payment plans, delinquency advances and loan modifications. Workout options that led to resolution of delinquent accounts, which means the account was either reinstated or removed from the portfolio, increased 15% in the last quarter of 2008.
The report shows that as of Dec. 31, 2008, of the Enterprises’ 30.7 million residential mortgages:
• Modifications represented 34.0% of fourth quarter loss mitigation actions up from 22.2% of the third quarter.
• Completed payment plans represented 19.0% of fourth quarter loss mitigation actions compared to 24.2% of the third quarter.
• Short sales represented 8.9% of fourth quarter loss mitigation actions compared to 7.7% of third quarter.
• Deeds in lieu represented 0.8% of fourth quarter loss mitigation actions compared to 0.7% in the third quarter.
As a result of increased loss mitigation efforts and the foreclosure suspensions, the overall loss mitigation performance ratio (loss mitigation actions as a percentage of mortgages for which foreclosure was likely) for mortgages serviced on behalf of Fannie Mae and Freddie Mac, increased from 55% during the third quarter of 2008 to 65.7% in the fourth quarter. For prime loans, the ratio increased from 45.1% to 54.2%, and for nonprime loans from 64.7% in the third quarter to 75.3% in the fourth quarter.
Suspensions gave servicers more time to work with borrowers in foreclosure who were eligible for the Streamlined Modification Program introduced in early November 2008. The impact of the suspensions caused December 2008 numbers for completed foreclosure and third-party sales to decline and for total loans, 60-plus, and 90-plus-days delinquent loans to increase.
When adjusted to account for foreclosure suspensions, the month-over-month change in the delinquency rates decreased. The month-over-month change in the 60-plus-days delinquency rate from October 2008 to November 2008 was an increase of 14.39%. The month-over-month change from November 2008 to December 2008 was an increase of 9.31%.
For more information, visit www.fanniemae.com or www.freddiemac.com.
Friday, March 27, 2009
Six Questions to Ask When Considering a Reverse Mortgage
RISMEDIA, March 27, 2009
Reverse mortgages have become an increasingly important financial tool for people 62 and older who want to remain in their home and fund their retirement. And, with 78 million Baby Boomers approaching retirement, interest is expected to grow. Despite this, many Americans are still unclear about how reverse mortgages work and when they may be appropriate.
“A reverse mortgage is a loan secured by the value of a house, where no repayment of the loan is required until the borrowers permanently vacate the home,” explained Peter Bell, president of the non-profit National Reverse Mortgage Lenders Association. ” Historically, reverse mortgages have been of particular interest to those with limited sources of liquid income, these days, there are many new retirees considering a reverse mortgage as an option after looking at all the other assets they’ve accumulated. This tool can help a person avoid taking Social Security too early or defer taxable withdrawals from IRA or 401(k) balances.”
“Reverse mortgages enable many Americans to ‘age in place’ comfortably in retirement,” said Donna DeMaio, president of MetLife Bank. “For many people, reverse mortgages are a good way to continue to stay where they are, remain independent, and live a more fulfilling life. Modern retirement income planning is about making the most of what you have, and reverse mortgages can be an important part of that plan.”
There are several advantages to securing a reverse mortgage. Borrowers can continue to live in the home as long as they want, and the amount owed to the bank by the borrowers when the property is sold will not exceed the lesser of the mortgage or its sale value. Interest and charges, including origination and closing costs, accumulate until that time, with no periodic payment required. As with traditional mortgages, the bank does not own the client’s home: borrowers retain ownership, and are responsible for paying property taxes and homeowner’s insurance, as well as property repairs.
So, when does a reverse mortgage make sense? Consider the following questions:
1. Do you qualify? Are you and any co-owner of the home at least 62 years old? Do you own your home and live in it as your primary residence? These qualifications need to be met before a reverse mortgage can be considered.
2. Do you have equity built up in your home? For individuals and families who have diligently paid down mortgages for years, and have worked hard to maintain and improve their property, a reverse mortgage is a way to realize a portion of that financial value.
3. Are you satisfied with your current level of retirement income? Many individuals in retirement or approaching retirement are finding that traditional retirement tools, including IRAs, pensions, and 401(k)s, do not provide enough income to comfortably fund current or anticipated living and healthcare expenses. A reverse mortgage can provide greater peace of mind and improve one’s quality of life. Taking reverse mortgage proceeds in regular monthly payments (the “tenure” option) that last as long as one lives in the property is a way to boost cash flow each month, and usually will produce a lower loan balance than a lump sum distribution when the time comes to pay off the loan.
4. Do you want to retire your existing mortgage? Many retirees are still paying a conventional mortgage, and as a result, have less disposable income than they would like to have at the end of the month. Depending upon the amount, a reverse mortgage can pay off an existing mortgage, freeing up money for other things. To gain a better understanding of where you stand, the AARP has a free reverse mortgage calculator that’s available at www.rmaarp.com.
5. Is a reverse mortgage a better option than a home equity loan? For many retirees, the income and credit requirements on a home equity loan may prove an obstacle to accessing that particular financial tool. A reverse mortgage doesn’t have these requirements.
6. Do you intend to pass your home on to your children or other loved ones? With a reverse mortgage loan, the outstanding balance needs to be repaid when the title changes hands. If one’s heirs wish to keep the home, they may be able to refinance the loan at that time, but it may be necessary to sell the property to repay the loan. Take the time to openly discuss this question with loved ones as an important first step when considering a reverse mortgage. Many families find that their children would prefer to see their parents experience a more comfortable retirement, rather than making the priority obtaining the family home, ‘free and clear.’
Reverse mortgages have become an increasingly important financial tool for people 62 and older who want to remain in their home and fund their retirement. And, with 78 million Baby Boomers approaching retirement, interest is expected to grow. Despite this, many Americans are still unclear about how reverse mortgages work and when they may be appropriate.
“A reverse mortgage is a loan secured by the value of a house, where no repayment of the loan is required until the borrowers permanently vacate the home,” explained Peter Bell, president of the non-profit National Reverse Mortgage Lenders Association. ” Historically, reverse mortgages have been of particular interest to those with limited sources of liquid income, these days, there are many new retirees considering a reverse mortgage as an option after looking at all the other assets they’ve accumulated. This tool can help a person avoid taking Social Security too early or defer taxable withdrawals from IRA or 401(k) balances.”
“Reverse mortgages enable many Americans to ‘age in place’ comfortably in retirement,” said Donna DeMaio, president of MetLife Bank. “For many people, reverse mortgages are a good way to continue to stay where they are, remain independent, and live a more fulfilling life. Modern retirement income planning is about making the most of what you have, and reverse mortgages can be an important part of that plan.”
There are several advantages to securing a reverse mortgage. Borrowers can continue to live in the home as long as they want, and the amount owed to the bank by the borrowers when the property is sold will not exceed the lesser of the mortgage or its sale value. Interest and charges, including origination and closing costs, accumulate until that time, with no periodic payment required. As with traditional mortgages, the bank does not own the client’s home: borrowers retain ownership, and are responsible for paying property taxes and homeowner’s insurance, as well as property repairs.
So, when does a reverse mortgage make sense? Consider the following questions:
1. Do you qualify? Are you and any co-owner of the home at least 62 years old? Do you own your home and live in it as your primary residence? These qualifications need to be met before a reverse mortgage can be considered.
2. Do you have equity built up in your home? For individuals and families who have diligently paid down mortgages for years, and have worked hard to maintain and improve their property, a reverse mortgage is a way to realize a portion of that financial value.
3. Are you satisfied with your current level of retirement income? Many individuals in retirement or approaching retirement are finding that traditional retirement tools, including IRAs, pensions, and 401(k)s, do not provide enough income to comfortably fund current or anticipated living and healthcare expenses. A reverse mortgage can provide greater peace of mind and improve one’s quality of life. Taking reverse mortgage proceeds in regular monthly payments (the “tenure” option) that last as long as one lives in the property is a way to boost cash flow each month, and usually will produce a lower loan balance than a lump sum distribution when the time comes to pay off the loan.
4. Do you want to retire your existing mortgage? Many retirees are still paying a conventional mortgage, and as a result, have less disposable income than they would like to have at the end of the month. Depending upon the amount, a reverse mortgage can pay off an existing mortgage, freeing up money for other things. To gain a better understanding of where you stand, the AARP has a free reverse mortgage calculator that’s available at www.rmaarp.com.
5. Is a reverse mortgage a better option than a home equity loan? For many retirees, the income and credit requirements on a home equity loan may prove an obstacle to accessing that particular financial tool. A reverse mortgage doesn’t have these requirements.
6. Do you intend to pass your home on to your children or other loved ones? With a reverse mortgage loan, the outstanding balance needs to be repaid when the title changes hands. If one’s heirs wish to keep the home, they may be able to refinance the loan at that time, but it may be necessary to sell the property to repay the loan. Take the time to openly discuss this question with loved ones as an important first step when considering a reverse mortgage. Many families find that their children would prefer to see their parents experience a more comfortable retirement, rather than making the priority obtaining the family home, ‘free and clear.’
Saturday, March 21, 2009
Do You Understand Your Credit Report?
RISMEDIA, March 21, 2009-Over 70% of consumers identify errors on their credit report. Twenty-five percent of those are serious enough to deny consumers and business owners access to credit, preferred interest rates or even a job. With over 54 billion credit updates occurring each year, it’s very likely you-or your clients-may have errors that are negatively impacting the ability to get credit and/or causing you to pay unnecessary interest expenses.
Identifying a credit report error is only the first step. Most consumers don’t know they have an error on their report because they rarely, if ever, review it until they need to get a loan. By the time this occurs, a consumer typically has less than 45 days before they need their loan funded, and their ability to get a single, valid error corrected within this timeframe is marginal at best.
The need to proactively understand, evaluate and optimize your credit profile has never been greater. So what should a consumer do? Become educated and informed about how credit works. Your clients should continually review and evaluate their credit profile. When a questionable activity is identified, he/she should make sure they understand it and correct any valid errors. In most cases, consumers begin by filing a dispute with the applicable credit agency who is reporting the information.
Identifying a credit report error is only the first step. Most consumers don’t know they have an error on their report because they rarely, if ever, review it until they need to get a loan. By the time this occurs, a consumer typically has less than 45 days before they need their loan funded, and their ability to get a single, valid error corrected within this timeframe is marginal at best.
The need to proactively understand, evaluate and optimize your credit profile has never been greater. So what should a consumer do? Become educated and informed about how credit works. Your clients should continually review and evaluate their credit profile. When a questionable activity is identified, he/she should make sure they understand it and correct any valid errors. In most cases, consumers begin by filing a dispute with the applicable credit agency who is reporting the information.
Friday, March 20, 2009
How Will Foreclosure Effect Credit Scores?
The amount of damage to a credit score caused by foreclosure, deed in lieu or a short sale during 2008 and 2009 may be mitigated by the slower economic times, say some credit and legal experts.
FICO may have to adjust its credit scores to lessen the impact of a foreclosure in the last two years, says Todd J. Zywicki, a professor of law at George Mason University.
''It just seems obvious that a foreclosure in 2008 or 2009 doesn't have as much information value as a foreclosure five years ago,'' he says. ''To the extent that foreclosure doesn't predict future behavior as much as it did in the past, you'd expect that the FICO algorithm would change to adjust for that.''
One of the country’s largest credit unions Golden 1 has already figured out a way to lend to people with a foreclosure on their record by offering a mortgage repair loan specifically for those who have lost a home to foreclosure and who want to buy a new one.
BECU, another large credit union based in Washington State, is about to present a program to fellow lenders, ''How to Lend to the Newly Credit Impaired.”
Source: The New York Times, Ron Lieber (03/14/2009)
FICO may have to adjust its credit scores to lessen the impact of a foreclosure in the last two years, says Todd J. Zywicki, a professor of law at George Mason University.
''It just seems obvious that a foreclosure in 2008 or 2009 doesn't have as much information value as a foreclosure five years ago,'' he says. ''To the extent that foreclosure doesn't predict future behavior as much as it did in the past, you'd expect that the FICO algorithm would change to adjust for that.''
One of the country’s largest credit unions Golden 1 has already figured out a way to lend to people with a foreclosure on their record by offering a mortgage repair loan specifically for those who have lost a home to foreclosure and who want to buy a new one.
BECU, another large credit union based in Washington State, is about to present a program to fellow lenders, ''How to Lend to the Newly Credit Impaired.”
Source: The New York Times, Ron Lieber (03/14/2009)
Thursday, March 19, 2009
National 30 Year fixed Rate Droped to 4.75% today
30-Year Mortgage Rates Drop Substantially for First Time in Four Weeks
The 30 year fix rate in Connecticut is 4.72% today
RISMEDIA, March 18, 2009-The weekly average rate borrowers were quoted on Zillow Mortgage Marketplace for thirty-year mortgages fell for the first time in a month to 5.21%, down from 5.28% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by real estate website Zillow.com. Meanwhile, rates for 15-year fixed mortgages dropped to 4.78%, down from 4.82% and 5-1 adjustable rate mortgages increased, up to 4.71% from 4.64% the week prior.
Average Rate Average Rate
Mortgage Type Week ending 3/15/09 Week ending 3/8/09 % Change
30-year fixed 5.21% 5.28% -1.3%
15-year fixed 4.78% 4.82% -0.8%
5-1 ARM 4.71% 4.64% 1.5%
Rates for 30-year fixed purchase mortgages had fallen further, with the average rate on Zillow Mortgage Marketplace at 5.05%.
Thirty-year fixed mortgage rates varied by state. Maryland mortgage rates and New York mortgage rates decreased the most, dropping from 5.38% to 5.25% in Maryland and from 5.33% to 5.21% in New York. Georgia mortgage rates (5.05 %) and Texas mortgage rates (5.13%) were the lowest in the country while Ohio mortgage rates (5.38%) were the highest. California mortgage rates were the most requested among all states.
Average 30-yr. Average 30-yr.
Fixed Rate Fixed Rate
State Week ending 3/15/09 Week ending 3/8/09 % Change
Arizona 5.21% 5.30% -1.7%
California 5.18% 5.23% -1.0%
Colorado 5.22% 5.32% -1.9%
Connecticut 5.20% 5.23% -0.6%
Florida 5.21% 5.28% -1.3%
Georgia 5.05% 5.14% -1.8%
Illinois 5.30% 5.37% -1.3%
Maryland 5.25% 5.38% -2.4%
Massachusetts 5.23% 5.29% -1.1%
Michigan 5.27% 5.39% -2.2%
Nevada 5.32% 5.42% -1.8%
New Jersey 5.18% 5.28% -1.9%
New York 5.21% 5.33% -2.3%
North Carolina 5.23% 5.33% -1.9%
Ohio 5.38% 5.43% -0.9%
Oregon 5.23% 5.31% -1.5%
Pennsylvania 5.19% 5.28% -1.7%
Texas 5.13% 5.22% -1.7%
Virginia 5.22% 5.28% -1.1%
Washington 5.22% 5.26% -0.2%
The 30 year fix rate in Connecticut is 4.72% today
RISMEDIA, March 18, 2009-The weekly average rate borrowers were quoted on Zillow Mortgage Marketplace for thirty-year mortgages fell for the first time in a month to 5.21%, down from 5.28% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by real estate website Zillow.com. Meanwhile, rates for 15-year fixed mortgages dropped to 4.78%, down from 4.82% and 5-1 adjustable rate mortgages increased, up to 4.71% from 4.64% the week prior.
Average Rate Average Rate
Mortgage Type Week ending 3/15/09 Week ending 3/8/09 % Change
30-year fixed 5.21% 5.28% -1.3%
15-year fixed 4.78% 4.82% -0.8%
5-1 ARM 4.71% 4.64% 1.5%
Rates for 30-year fixed purchase mortgages had fallen further, with the average rate on Zillow Mortgage Marketplace at 5.05%.
Thirty-year fixed mortgage rates varied by state. Maryland mortgage rates and New York mortgage rates decreased the most, dropping from 5.38% to 5.25% in Maryland and from 5.33% to 5.21% in New York. Georgia mortgage rates (5.05 %) and Texas mortgage rates (5.13%) were the lowest in the country while Ohio mortgage rates (5.38%) were the highest. California mortgage rates were the most requested among all states.
Average 30-yr. Average 30-yr.
Fixed Rate Fixed Rate
State Week ending 3/15/09 Week ending 3/8/09 % Change
Arizona 5.21% 5.30% -1.7%
California 5.18% 5.23% -1.0%
Colorado 5.22% 5.32% -1.9%
Connecticut 5.20% 5.23% -0.6%
Florida 5.21% 5.28% -1.3%
Georgia 5.05% 5.14% -1.8%
Illinois 5.30% 5.37% -1.3%
Maryland 5.25% 5.38% -2.4%
Massachusetts 5.23% 5.29% -1.1%
Michigan 5.27% 5.39% -2.2%
Nevada 5.32% 5.42% -1.8%
New Jersey 5.18% 5.28% -1.9%
New York 5.21% 5.33% -2.3%
North Carolina 5.23% 5.33% -1.9%
Ohio 5.38% 5.43% -0.9%
Oregon 5.23% 5.31% -1.5%
Pennsylvania 5.19% 5.28% -1.7%
Texas 5.13% 5.22% -1.7%
Virginia 5.22% 5.28% -1.1%
Washington 5.22% 5.26% -0.2%
Sunday, March 15, 2009
House Passes Mortgage Bankruptcy Bill
The U.S. House approved legislation on Thursday that will allow bankruptcy judges to lengthen terms, cut interest rates and reduce the principal owed by bankrupt borrowers.
The so-called "cramdown" bill (the actual name of the bill is the "Helping Families Save Their Home Act") passed by a margin of 234-191. The legislation was modified to become more lender friendly; it requires borrowers to certify that they provided their lenders with financial information and gave them time to provide other alternatives.
Borrowers receiving a cramdown must reimburse their lender for a portion of the loss if they sell the property before they complete a five-year bankruptcy repayment plan.
House Republican Leader John Boehner of Ohio, who opposed the legislation, says it forces those who acted responsibly to “subsidize scam artists, speculators and those who knowingly made bad decisions.”
The bill also permanently increases the Federal Deposit Insurance Corp.’s insurance on bank deposits to $250,000, gives loan servicers legal protection when they modify troubled loans, and retools the Hope for Homeowners lending program, which has so far been a failure.
The Senate is expected to consider a version of the bill as early as next week.
Source: Bloomberg, Dawn Kopecki (03/06/2009)
The so-called "cramdown" bill (the actual name of the bill is the "Helping Families Save Their Home Act") passed by a margin of 234-191. The legislation was modified to become more lender friendly; it requires borrowers to certify that they provided their lenders with financial information and gave them time to provide other alternatives.
Borrowers receiving a cramdown must reimburse their lender for a portion of the loss if they sell the property before they complete a five-year bankruptcy repayment plan.
House Republican Leader John Boehner of Ohio, who opposed the legislation, says it forces those who acted responsibly to “subsidize scam artists, speculators and those who knowingly made bad decisions.”
The bill also permanently increases the Federal Deposit Insurance Corp.’s insurance on bank deposits to $250,000, gives loan servicers legal protection when they modify troubled loans, and retools the Hope for Homeowners lending program, which has so far been a failure.
The Senate is expected to consider a version of the bill as early as next week.
Source: Bloomberg, Dawn Kopecki (03/06/2009)
Monday, March 9, 2009
Friday, March 6, 2009
House Passes Mortgage Bankruptcy Bill
The U.S. House approved legislation on Thursday that will allow bankruptcy judges to lengthen terms, cut interest rates and reduce the principal owed by bankrupt borrowers.
The so-called "cramdown" bill (the actual name of the bill is the "Helping Families Save Their Home Act") passed by a margin of 234-191. The legislation was modified to become more lender friendly; it requires borrowers to certify that they provided their lenders with financial information and gave them time to provide other alternatives.
Borrowers receiving a cramdown must reimburse their lender for a portion of the loss if they sell the property before they complete a five-year bankruptcy repayment plan.
House Republican Leader John Boehner of Ohio, who opposed the legislation, says it forces those who acted responsibly to “subsidize scam artists, speculators and those who knowingly made bad decisions.”
The bill also permanently increases the Federal Deposit Insurance Corp.’s insurance on bank deposits to $250,000, gives loan servicers legal protection when they modify troubled loans, and retools the Hope for Homeowners lending program, which has so far been a failure.
The Senate is expected to consider a version of the bill as early as next week.
Source: Bloomberg, Dawn Kopecki (03/06/2009)
The so-called "cramdown" bill (the actual name of the bill is the "Helping Families Save Their Home Act") passed by a margin of 234-191. The legislation was modified to become more lender friendly; it requires borrowers to certify that they provided their lenders with financial information and gave them time to provide other alternatives.
Borrowers receiving a cramdown must reimburse their lender for a portion of the loss if they sell the property before they complete a five-year bankruptcy repayment plan.
House Republican Leader John Boehner of Ohio, who opposed the legislation, says it forces those who acted responsibly to “subsidize scam artists, speculators and those who knowingly made bad decisions.”
The bill also permanently increases the Federal Deposit Insurance Corp.’s insurance on bank deposits to $250,000, gives loan servicers legal protection when they modify troubled loans, and retools the Hope for Homeowners lending program, which has so far been a failure.
The Senate is expected to consider a version of the bill as early as next week.
Source: Bloomberg, Dawn Kopecki (03/06/2009)
Thursday, March 5, 2009
Mortgage Calculator and Much More
Please cut and paste
http://www.mortgage101.com/calculators.asp?p=cyber
Go to this site for:
Mortgage Calculator
How Much Can I Afford?
This calculator helps you identify how much you are able to afford when you are searching for a home.
How Much Do I Need to Qualify?
Compare your total monthly obligations including your total mortgage payment to your monthly income.
Should I Buy or Rent?
Our Buy vs Rent Calculator help you analyze the total cost of renting versus the total cost of owning.
Tax Benefits of Buying This calculator estimates the tax benefit of buying a home.
APR Loan Calculator
Estimate the Annual Percentage Rate (APR) for a mortgage loan using your mortgage rate.
ARM Loan Payment
Compute your initial and estimate your future payments with Mortgage 101 ARM Loan Payment Calculator.
Refinance Calculators
Should I Pay Points - Refinance?
Helps you understand if you should pay loan points during your refinance.
Refinance Debt Consolidation Management
Figure how long before your savings equal the cost of obtaining a new consolidation loan.
Mortgage Principal
Figure your principal balance after any number of payments.
Extra Payments
Figures how long your mortgage will last depending on how much you pay monthly.
Mortgage Payment Amortization
This calculator will amortize your mortgage over the loan period based on your input.
APR ARM Loan
Estimate the Annual Percentage Rate for an Adjustable Rate Mortgage based on input parameters.
http://www.mortgage101.com/calculators.asp?p=cyber
Go to this site for:
Mortgage Calculator
How Much Can I Afford?
This calculator helps you identify how much you are able to afford when you are searching for a home.
How Much Do I Need to Qualify?
Compare your total monthly obligations including your total mortgage payment to your monthly income.
Should I Buy or Rent?
Our Buy vs Rent Calculator help you analyze the total cost of renting versus the total cost of owning.
Tax Benefits of Buying This calculator estimates the tax benefit of buying a home.
APR Loan Calculator
Estimate the Annual Percentage Rate (APR) for a mortgage loan using your mortgage rate.
ARM Loan Payment
Compute your initial and estimate your future payments with Mortgage 101 ARM Loan Payment Calculator.
Refinance Calculators
Should I Pay Points - Refinance?
Helps you understand if you should pay loan points during your refinance.
Refinance Debt Consolidation Management
Figure how long before your savings equal the cost of obtaining a new consolidation loan.
Mortgage Principal
Figure your principal balance after any number of payments.
Extra Payments
Figures how long your mortgage will last depending on how much you pay monthly.
Mortgage Payment Amortization
This calculator will amortize your mortgage over the loan period based on your input.
APR ARM Loan
Estimate the Annual Percentage Rate for an Adjustable Rate Mortgage based on input parameters.
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