Real Estate Blog

CNN reported earlier this morning that hundreds of thousands of homeowners who may struggle to make mortgage payments are likely to get some relief in coming months, including more options to refinance into lower-cost, fixed-rate loans and tax relief if they do face foreclosure.

About 240,000 borrowers of the estimated 2 million with adjustable-rate loans scheduled to reset in the next year already are eligible to refinance into a loan insured by the Federal Housing Administration (FHA) - roughly 80,000 of them are eligible because of the newly created FHASecure Act, which loosens FHA’s criteria for refinancing.

The FHA program has been geared toward home buyers and homeowners with weak credit. Lenders may be more willing to lend to a buyer with shaky credit when the FHA is insuring the loan.

Borrowers with FHA-insured loans - which they get from private lenders as they would any other mortgage - pay a small premium to the FHA every month. The FHA, in turn, uses those premiums to cover the lender in the event of foreclosure and requires lenders to pursue viable ways to help borrowers avoid foreclosure if they become delinquent.

If you are behind on payments by at least four months but no more than 12, the FHA may even make a one-time interest-free loan to you to make your account current with your lender.

It used to be you couldn’t refinance into an FHA loan if you’d been delinquent in your payments for any reason. But with the FHASecure Act, delinquent homeowners qualify for an FHA-insured refi if they have:

• A history of on-time payments for at least six months before their loans reset to higher rates
• Interest rates scheduled to reset between June 2005 and December 2009
• 3 percent equity in their home, or the cash equivalent
• A sustained history of employment
• Sufficient income to make their FHA-insured mortgage payment and all other obligations Continue reading ‘Better Refi options for Homeowners in a Crisis’

Realty Trac has just released the foreclosure numbers for July 2007 and according to the report the nationwide foreclosures are up 93 percent since last July and 9 percent up from June 2007. There were $179,599 foreclosure filings reported in July. But what are the main factors that have contributed to the increase in foreclosures numbers?

Let’s take a look at a few of them:

1. Subprime and adjustable-rate mortgages

When the mortgage rates were at an-all-time low, consumers have borrowed more than they could afford, and due to the adjustable-rate mortgages, they were able to buy more expensive properties.

2. Increase in the real estate taxes

This is a factor that has affected everyone nationwide and in some areas, consumers have seen an increase as high as 50 percent.

3. Higher assessments

Due to an increase in electricity, gas and other consumer’s good, the property management companies and the condo associations have imposed higher assessments fees on the owners.

4. Higher interest rates

This is obviously one of the most important factor that contributed to such a high number of foreclosures fillings

5. Average time of properties on the market

The average time of houses on the market has increased and more and more sellers are facing with the situation where their property stays on the market for a prolonged amount of time. A 60-70 days time on the market is seen as normal these days but this has definitely hurt the homeowners that are in financial trouble and need to make the sale quick.

If you find yourself in trouble, read this article and remember to always talk to your lender first before deciding on other options, it is known that recently banks have been willing to go down as 20 percent of what is owed to them.

The number of foreclosures reported in the U.S. last month jumped 93 percent from July 2006 and rose 9 percent from June. This is an again an obvious sign that homeowners are having trouble making payments and finding buyers during the national housing downturn. The average time of properties on the market has increased also and this makes it even more difficult for people that find themselves in a bind and need to sell fast.

According to the report, there were 179,599 foreclosure filings reported during July, up from 92,845 during the same period a year ago. The number of foreclosures for June was at high as 164,644.
Continue reading ‘Foreclosures numbers have doubled compared to last July’

The news that the largest U.S. mortgage lender could face bankruptcy as liquidity worsens has had a great impact on its stock, down 13%. This is the biggest one-day decline since the 1987 stock market crash. The stock has been downgraded to “sell” from “buy” on Wednesday and the investors are less confident the company can pay its bills and fund operations.

Shares of Countrywide closed down $3.17 at $21.29 on the New York Stock Exchange. They have fallen 50 percent this year, and this is definitely a tough situation for them, which doesn’t seem to have an happy ending for the company. Continue reading ‘Countrywide shares sank on fear the mortgage company will file for bankruptcy’

Like many other homeowners, home-based business owners also tapped the seemingly ever-increasing rise in property value and the corresponding low interest rates the past few years to refinance their homes and use the funds for either consumer spending, business growth and expenses, or both. But now it looks as if that may not have been such a great idea.
When you are in over your head with your mortgage, when foreclosure is on the horizon, you have a few options, but I must tell you, none of them are great. Here are your choices:

Short sale: If you are on the verge of foreclosure, you would work with the bank to quickly sell the property – probably for less than its worth, but at least enough to cover the mortgage. It keeps the foreclosure off of your credit report, but that’s about it. Continue reading ‘Is your mortgage too high? Weigh these options’

This is a question that everyone has asked themselves: What should I do if I’m in a foreclosure situation?

There can be one of four different outcomes:

- You bring your payments current and your loan is reinstated. (Happy ending)
- You sell your home and pay off the loan, keeping “foreclosure” off your credit record. (You have to move but your credit rating is in tact.)
- You do nothing and your home is sold at auction by an attorney, trustee, or the local sheriff. (Not good.)
- You do nothing and the bank re-possesses your home with the intention of selling it. (Not good.) Continue reading ‘What to do if you’re in a foreclosure situation’

States with the Highest Foreclosure Rates
Jan-June 2007

1. Nevada
2. Colorado
3. California
4. Michigan
5. Florida
6. Ohio
7. Georgia
8. Arizona
9. Connecticut
10.Indiana

In the first six months of this year, Nevada, Colorado and California earned the dubious honor of being the three states with the highest foreclosure rates in the country. However, what might surprise people is that several states from the Midwest, including your home state of Ohio, round out the top ten.

The main problem in your area isn’t greed, but economic conditions, particularly in the auto industry. Unfortunately, knowing that others are facing similar circumstances doesn’t make your situation easier.

The slide started innocuously in April after New Century Financial, a mortgage lender whose principle borrowers were Americans with less-than-stellar credit, filed for bankruptcy protection.

Its customers were people who may have been late on credit card payments, maybe even filed bankruptcy in the previous years, but still wanted that shot at the American dream: a home of one’s own.

Lenders, flush with cash and eager to exploit new markets so they could, in turn, lend more money and increase their profits, were only too happy to oblige.

Hedge funds and banks worldwide saw a market flush with opportunity and took their fill, buying mortgage-backed securities to bolster their own bottom lines. Continue reading ‘How the mortgage crisis has affected the world’

Even if this is not something common, one day, your mortgage company might have to fill for bankruptcy. Of course, the question that will go through your head at that time is: What do I do? Am I screwed? Who owns my house?

Here is a simple advice:

1.Keep making your payments

Regardless of what kind of trouble the mortgage company may be in, you still need to send in your payments on time, says Greg McBride of Bankrate.com.Remember, your payments are considered an asset to the company. If a lender declares bankruptcy, those assets will just be sold to another lender.

In most cases, government-sponsored enterprises like Fannie Mae (Charts), Freddie Mac (Charts, Fortune 500) or Ginnie Mae will handle the transfer. But rest assured, there will be someone who wants to get your monthly check.

2: Know Your Rights

The terms of your loan should always stay the same, no matter who holds your loan. It’s important that you thoroughly review the details of your mortgage agreement. The interest rate and the type of loan you get should not change. If your lender does sell your mortgage, you should receive a letter from the company within 15 days that outlines the new mailing address and payment deadline.

You should also be given a toll-free telephone number that you can call if you have any questions. You must get a grace period of 60 days to get your payments to the right place on time. If you have any complaints or issues, write a letter to your lender. The company is required to respond within two months of getting your letter. Continue reading ‘What do you do if your mortgage lender goes bankrupt?’