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BofA Offers Help to Homeowners Underwater

Real Estate Home Blog — Mon, 05 Apr 2010 10:10:09 +0000

With hopes of encouraging more participation from homeowners in programs of modification, the Bank of America now has a brand new approach on modifying loans that are extremely underwater.
First, it looked at principal forgiveness when modifying adjustable-rate and subprime mortgages that qualified for the NHRP. These also had to meet the most basic qualifications of the Home Affordable Modification Program.

This approach focuses on mortgages that are extremely underwater and have high delinquency rates, most of all Pay-Option ARMs and subprime loans.

The Bank of America has seen a lot of homeowners that owe a lot more on mortgages than on what their homes are actually worth but are reluctant to accept solutions that focus merely on the payment without balance reductions from their loans.
When it comes to these mortgage modifications, the Bank of America is going to take principal reduction into consideration to reach reasonable payments that are equal to around 31% of the household income. If it is a necessity to get extra savings to reach that target of payment, a reduction of interest rates will also be taken into consideration.
Under this new approach, the qualified homeowners will get an offer of interest-free principal forbearance, which can become forgiven principal – a result of up to 30% in loan principal balance reduction.

For the initial three years, the forgiveness installments will be set to a level of 20%. In the last two years, this amount will rely on the property’s updated value to make sure that the LTV won’t go below 100% because of principal forgiveness.
Earned principal forgiveness can help homeowners

Aside from this new approach, the Bank of America has also started to provide two other sustainable and reasonable payment solutions when it comes to certain Pay-Option ARMs.
If negative amortization is the case, they will think about offering up HAMP modification to get rid of negative amortization and to forgive some of the amounts for principal reductions. If pending Pay-Option ARM recasts appear to increase the monthly payments of a customer, however, a preemptive modification which gets rid of negative mortgage amortization and changes it to a completely amortizing market rate loan might be taken into consideration.
The latest NHRP components will come about next month and they are expected to offer up improved solutions to principal reduction to around 45,000 customers that qualify for the HAMP modification. This would result in around a total of $3 billion of reduced principal.

February Foreclosures High

Real Estate Home Blog — Sat, 03 Apr 2010 10:07:26 +0000

In February, St. George’s rates of foreclosure went up compared to its rates last year.

St. George’s foreclosure rate among existing mortgage loans stands at 4.19% for February, 1.88% higher than last year’s 2.31%. In fact, the overall activity of foreclosure in St. George stands higher compared to the national rate of foreclosure, which stood at 3.17% this February – a difference of 1.02%.

The rate of mortgage delinquency in St. George has also gone up. In the month of February this year, 11.13% of all mortgage loans happened to be at least 90 days delinquent as compared to the 6.11% of last year – a 5.02% increase.

Foreclosures do not appear to be a problem is Rancho Santa Fe as the Rancho Santa Fe real estate market continues to remain strong.

All about Short Sales

Real Estate Home Blog — Fri, 26 Feb 2010 16:58:10 +0000

Real estate short sales are getting to be extremely common in Dublin, California. In fact, out of 255 pending or active homes in Dublin, 133 of them happen to be short sales. In a nutshell, if your home was purchased between 2003 and 2008, your loan debts are probably much more compared to your actual home’s worth. And, if you keep living there while paying the mortgage, your overall credit rating will probably not get a significant impact if your loan is “upside down”.

Because of this, things could get hard for you if you wish to sell your home. Whenever the market’s home value is lower than your actual loan balance along with the incurred sale expenses, you could avoid credit rating damage, if you pay for the difference on your own, but the truth is: the majority of sellers will not have money for this; so, if you need to sell, a short sale might be required.

A short sale refers to an agreement that, if the home is sold, the lender is going to accept the amount that the home sold for in place of the loan’s full payment. This will damage your credit, but it will not be as bad as the damage that foreclosures could do.

Now, why would a lender agree to such a thing, you might ask. Well, foreclosures cost a lot of money and take a lot of time to process. And, although the lenders could eventually get judgments against the deficiency of the borrower, getting that money back could prove to be a daunting task. Because of this, a short sale would be a much more cost-effective choice. Naturally, lenders will need proof of the borrower’s inability to pay off the mortgage, though, and the borrower will also have to prove that he is in real trouble due to things like loss of income and health expenses that resulted in the ability to pay. To prove this, copies of bank statements, income tax statements, bills, pay stubs, proof of income, and mortgage statements will need to be shown.

Does a short sale appear to be the ideal option for you? If so, you need to get in touch with professional agents of real estate as soon as you can. A short sale could take several months to process due to lost faxes, lender indecision and dead ends. Therefore, by getting in touch with an experienced realtor, this uncertain and long process could become much more manageable as the agent can take care of home listing and working to get the best offer possible. Once there is an accepted offer, your agent of real estate will negotiate for you and attempt to get your lender to accept the proceeds of the short sale in place of the loan payment. Be careful of scams, though. Do not shell out any money upfront, no matter what, and do not sign things you do not fully understand. Legal realtors should only get paid after a short sale has been completed. Remember that.

IRS Releases Form for Home Buyer Tax Credit

Real Estate Home Blog — Mon, 01 Feb 2010 17:12:46 +0000

The IRS has recently released a form, which eligible homebuyers have to claim in order to get the first-time credit of homebuyers this tax season. They have also announced tax returns processing and brand new requirements in documentation to deter any fraud that may be related to first-time credit of homebuyers.

This brand new form follows major changes that were made a few months back, which extended credit to a wider array of home purchasers while adding new requirements of documentation to avoid fraud and making sure that taxpayers properly get credit at the same time.

Now, eligible homebuyers can begin to file tax returns from 2009 while taxpayers who want to claim the credit of homebuyers need to file paper tax returns due to the extra requirements in documentation.

2009 tax return processing is expected to begin mid-February after completing the testing and updating of systems to meet brand new law requirements. These updates will let the IRS put important system checks into place in order to avoid any fraud related to credit from homebuyers. Several early taxpayers who want this credit might need to wait several more weeks before getting tax refunds, though.

Aside from filling out the required form, every eligible homebuyer needs to add one document from the following to get credit:

- A settlement statement copy that shows every party’s signature and name, sales price, purchase date, and property address.

- A copy of an executed contract of retail sales that shows every party’s signature and name, property address, purchase date and purchase price.

- An occupancy certificate copy that shows the owner’s property address, name and certificate date.

Plus, long-term residents of a home can claim this credit if they choose to buy a brand new main residence. In order to qualify, however, every eligible taxpayer needs proof of having lived within older homes for five consecutive years. Also take note that the IRS has become stricter with compliance checks now.

Mortgage Modifications Double in December 2009

Real Estate Home Blog — Sun, 31 Jan 2010 17:01:34 +0000

After months of pressure given to mortgage servicers and banks, the administration of Obama has finally reported some improvement on its program in reducing payments of mortgage to get rid of foreclosures.

The amount of loan modifications that were recently made permanent has doubled since the end of December 2009. Plus, many more trial mortgage modifications have also been approved to become permanent, too.

Although mortgage servicers seem to have picked up the pace in turning 3-month trial modifications permanent, the amount of these permanent modifications remain low when compared to when the trials actually began.

The program offers up incentives for mortgage services in order to lower monthly payments for troubled homeowners, but critics state that this program has not done enough to stop the foreclosure tide. A more significant response is definitely required; that much is clear. But does enough political will actually exist that can force banks into modifying loans?

The administration acknowledges the need to do more and has goals of meeting a target of four million in modifications by the year 2012. They also promise to ensure that the program will run right and eventually stabilize the market of housing.

Resale of HUD Foreclosures

Real Estate Home Blog — Wed, 27 Jan 2010 10:51:48 +0000

With efforts to bring stabilization to home values and improve community conditions where there is high foreclosure activity at the same time, another temporary policy from the administration of Obama has been announced, which will give extra access to mortgage insurance of the FHA, as well as allow for fast resales on foreclosed properties.

Apparently, $2 billion will be granted to nonprofit housing developers and local communities to fight the effects that come with empty homes. Due to tight credit markets, mortgage financing that is insured by the FHA is usually the single means that exists to possible home buyers, giving the FHA an unprecedented chance to fulfill its goal by helping home buyers locate cheap housing while stabilizing the neighborhood at the same time.

Some exceptions aside, the FHA now prohibits mortgage insurance on homes that sellers have owned for less than ninety days, giving borrowers access to wider choices in properties that were recently foreclosed. However, this policy comes with strict guidelines and conditions to make sure that predatory practices do not get through.

This change in policy will allow buyers to make use of financing insured by the FHA to buy properties owned by the HUD or the bank, as well as let homes resell in no time and help with real estate stabilization and community and neighborhood revitalization. Before, FHA borrowers were shut out from purchasing cheap properties; now, they can take full advantage of these opportunities.

The waiver will be effective for a year and will be limited to the following sales:

- Sales with arms-length transactions and no interest identity between the parties involved within these transactions

- Sales whose lenders meet certain conditions, if the property sales price is at least 20% above the acquisition cost of the seller

- Sales with waivers restricted to forward mortgages and without applications for HECM purchase programs

Originations of Mortgage are Dropping

Real Estate Home Blog — Sat, 23 Jan 2010 18:54:22 +0000

It seems that residential mortgage originations are going to drop by 40% this year – the lowest in an entire decade – as the demand for home refinancing drops along with rising rates of mortgage.

Lenders are going to underwrite $1.28 trillion for home loans, compared to the $2.11 trillion of last year; this would be its lowest amount since 2000′s $1.14 trillion.

Although brand new purchase originations may rise a bit from last year’s $742 billion to $776 billion, refinance originations are seen dropping from $1.37 trillion from last year to a mere $502 billion.

Rates of interest are also expected to go up after the Federal Reserve stops purchasing securities backed by mortgage at the end of March while 30-year fixed rates are seen to rise to 5.8% this year, 6.2% next year and 6.5% the year after that.

Despite this rise in rates, mortgage bankers see a heightened housing demand as unemployment drops, economic growth keeps going and financial systems stabilize.

Housing starts appear to rise to annual paces that are seasonally adjusted, while complete sales of homes that were previously owned are seen to rise, as well. Prices seem flat this year after dropping by 4.1% in 2009, while 2011 prices are seen to rise by 2.8% and 5% the year after that.

The economy is expected to grow by 2.7% by the end of this year instead of the expected 0.2% contraction last year. It has also been stated that this will encourage the production of brand new kinds of mortgage security guaranteed by the government that government-chartered, privately owned entities of mortgage-credit guarantors would back.

Values Go Down, Thanks to New Rules of Home Appraisal

TeamAguilar — Thu, 21 Jan 2010 09:36:46 +0000

Home buyers that take out home loans insured by the government may soon learn that their mortgage brokers cannot choose appraisers anymore. This has come about to make sure that appraisers do not get pressured into inflating values the of homes.

Starting next month, brokers of mortgage won’t have the power to order loan appraisals that are FHA-insured anymore. This would mean that consumer home appraisals are going to reflect the value of a home much more closely since brokers that would usually profit from approved loans won’t be choosing appraisers that could declare higher values.

However, there are certain organizations that state that changes and other attempts to reform the industry of appraisal hurts both appraisers and consumers because the brand new rules that have come about are resulting in home values that are extremely low since the appraisers are not familiar or experienced with the local markets. Plus, these appraisers are also slower and take their time in getting things done, resulting in the returned values being lower than they should be.

The changes started last year when a code was adopted and made to divide loan officers from hiring appraisers. This code meant that loan production personnel, brokers and realtors can no longer hire appraisers. Instead, lenders have to turn to management companies that normally hire appraisers to get jobs done.

Although the entire process has now changed, it still remains to be seen whether it was a smart move due to the inexperience of the appraisers now being given out and their lack of knowledge regarding certain areas.

Alex Aguilar
Team Aguilar Real Estate Agent & Blogger!
San Diego Houses
Real Estate Blog

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Credit Card Debts Fall

Real Estate Home Blog — Thu, 21 Jan 2010 09:33:40 +0000

Credit card debts happen to be huge problems that consumers worry about and if you are one of these consumers, you are probably trying to get rid of your debts right now.

Recent consumer credit reports have shown that revolving credit has already fallen by 18.5%, the majority of which is made up of credit card debts that fell by 13.7 billion dollars.

Revolving credit seems to have been steadily declining since the end of 2008 and has gone through declines that adjusted between 7.3 – 9.7% in every quarter. The massive drop last November could improve this quarterly scope, but it would depend on how things go next quarter. As of now, a revised amount shows more drops in revolving credit.

A continuous decline in credit card debt shows that a lot of consumers have taken surveys that indicate just how much people try to depend more on debit cards and cash now. However, this might not be sufficient as default account rates and delinquency keep getting higher.

Originations of Mortgage are Dropping

Real Estate Home Blog — Tue, 19 Jan 2010 21:15:39 +0000

It seems that residential mortgage originations are going to drop by 40% this year – the lowest in an entire decade – as the demand for home refinancing drops along with rising rates of mortgage.

Lenders are going to underwrite $1.28 trillion for home loans, compared to the $2.11 trillion of last year; this would be its lowest amount since 2000′s $1.14 trillion.

Despite this rise in rates, mortgage bankers see a heightened housing demand as unemployment drops, economic growth keeps going and financial systems stabilize.