Difficulty in landing a mortgage is keeping many buyers out of the market.
At the peak of the housing boom, about 20 percent of the mortgage market was subprime, and nearly 20 percent was "Alt-A loans” or "A-minus" loans, typically offered those with good credit but with high debt-to-loan ratios or little or no proof of income.
Both categories are now nearly extinct. That means about 40 percent of the residential mortgage market has all but disappeared, according to David Olson of Wholesale Access Mortgage Research and Consulting.
"The underwriting has really tightened up," Olson says, "Before, if you could fog a mirror, you got a loan. Now, that's not the case."
Nationwide, practitioners say they are encountering more potential buyers who can’t get financing.
"Buyers come in with confidence, and once they have talked with a lending practitioner, it's like they've been hit over the head with a ton of bricks," says Dean Moss, an agent at Keller Williams Fox and Associates Realty in Chicago.
A study conducted using data from a Reno, Nev., multiple listing service, found that about 30 percent of sales haven’t closed after 90 days. Practitioner Guy Johnson, who analyzed the data, suggests that buyers stay on top of their loans, checking in with their lender frequently to make sure the loan for which they’ve been approved is still the same.
"A loan commitment letter," he adds, "isn't really as solid as it once was."
Source: USA Today, Anna Bahney (08/05/2008)
Sunday, August 17, 2008
5 Foreclosure Laws You Need to Know
Regulations relating to foreclosure differ by state, so check your state’s statutes.
One place to start is a Web site such as www.foreclosurelaw.org.
1. Notification of intent to foreclose. Many states require that a lender notify the borrower in advance (30 days, for example) before obtaining a court judgment to foreclose.
2. Nonjudicial foreclosure. Many states permit lenders to add a clause to a mortgage document that permits the lender to foreclose and sell the property without obtaining court approval.
3. Deficiency judgment. Some states permit a lender that forecloses on a mortgage to file a judgment against the borrower entitling the lender to collect from the defaulted borrower any amount of the outstanding mortgage not covered by the sale price.
4. Right of redemption. Some states (New Jersey, for example) permit a defaulting borrower to satisfy the loan default and recover the property if done within a specified amount of time after the property is sold.
5. Military service. If the borrower or the borrower’s spouse is on active military duty, the Civil Relief Act of 2003 prohibits a lender from foreclosing on the mortgage. In addition, the borrower may qualify for an interest rate reduction or even a temporary suspension of mortgage payments.
Don’t forget the HOPE Now Alliance. This new private-sector program negotiated by the federal government should help borrowers with subprime adjustable rate loans that will reset in 2008 or 2009 avoid foreclosure.
The voluntary plan encourages lenders to help qualified subprime borrowers refinance their loans into an FHA-insured or other more affordable mortgage without prepayment penalties. Lenders may also freeze the interest on ARM products at the introductory rate for five years to assist borrowers who are unable to qualify for refinancing. For more information, go to www.hopenow.com.
One place to start is a Web site such as www.foreclosurelaw.org.
1. Notification of intent to foreclose. Many states require that a lender notify the borrower in advance (30 days, for example) before obtaining a court judgment to foreclose.
2. Nonjudicial foreclosure. Many states permit lenders to add a clause to a mortgage document that permits the lender to foreclose and sell the property without obtaining court approval.
3. Deficiency judgment. Some states permit a lender that forecloses on a mortgage to file a judgment against the borrower entitling the lender to collect from the defaulted borrower any amount of the outstanding mortgage not covered by the sale price.
4. Right of redemption. Some states (New Jersey, for example) permit a defaulting borrower to satisfy the loan default and recover the property if done within a specified amount of time after the property is sold.
5. Military service. If the borrower or the borrower’s spouse is on active military duty, the Civil Relief Act of 2003 prohibits a lender from foreclosing on the mortgage. In addition, the borrower may qualify for an interest rate reduction or even a temporary suspension of mortgage payments.
Don’t forget the HOPE Now Alliance. This new private-sector program negotiated by the federal government should help borrowers with subprime adjustable rate loans that will reset in 2008 or 2009 avoid foreclosure.
The voluntary plan encourages lenders to help qualified subprime borrowers refinance their loans into an FHA-insured or other more affordable mortgage without prepayment penalties. Lenders may also freeze the interest on ARM products at the introductory rate for five years to assist borrowers who are unable to qualify for refinancing. For more information, go to www.hopenow.com.
Sunday, August 10, 2008
California Foreclosures Offered at 12% Discount
Under a California initiative aimed to help prospective homeowners with modest means, lenders including Wells Fargo, HomeEq, CitiMortgage, and Fannie Mae will price their foreclosed properties at 12 percent below market value. The California Housing Finance Agency will offer 30-year loans at a fixed interest rate of 5.5 percent to first-time home buyers who purchase the foreclosed properties through the Community Stabilization Home Loan Program. "This is a starting point to try to get some of these foreclosures off the market in some of the hardest-hit communities in the state," says Ken Giebel, marketing director for the California Housing Finance Agency. He expects more lenders to join the program.
Source: San Francisco Chronicle, Carolyn Said (07/22/08)
Copyright Info Inc.
Source: San Francisco Chronicle, Carolyn Said (07/22/08)
Copyright Info Inc.
Five Foreclosure Laws You Need to Know
Regulations relating to foreclosure differ by state, so check your state’s statutes.One place to start is a Web site such as www.foreclosurelaw.org.1. Notification of intent to foreclose. Many states require that a lender notify the borrower in advance (30 days, for example) before obtaining a court judgment to foreclose.2. Nonjudicial foreclosure. Many states permit lenders to add a clause to a mortgage document that permits the lender to foreclose and sell the property without obtaining court approval.3. Deficiency judgment. Some states permit a lender that forecloses on a mortgage to file a judgment against the borrower entitling the lender to collect from the defaulted borrower any amount of the outstanding mortgage not covered by the sale price.4. Right of redemption. Some states (New Jersey, for example) permit a defaulting borrower to satisfy the loan default and recover the property if done within a specified amount of time after the property is sold.5. Military service. If the borrower or the borrower’s spouse is on active military duty, the Civil Relief Act of 2003 prohibits a lender from foreclosing on the mortgage. In addition, the borrower may qualify for an interest rate reduction or even a temporary suspension of mortgage payments.Don’t forget the HOPE Now Alliance. This new private-sector program negotiated by the federal government should help borrowers with subprime adjustable rate loans that will reset in 2008 or 2009 avoid foreclosure.The voluntary plan encourages lenders to help qualified subprime borrowers refinance their loans into an FHA-insured or other more affordable mortgage without prepayment penalties. Lenders may also freeze the interest on ARM products at the introductory rate for five years to assist borrowers who are unable to qualify for refinancing. For more information, go to www.hopenow.com.
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