Getting a mortgage can be tough these days – even people with near-perfect credit have been rejected for loans. But for some lucky borrowers, things aren’t as bad as the doom-and-gloom crowd says.
Read the full story CNN SmartMoney
Lenders prepare for lower loan limits, stop accepting certain applications
July 13, 2011 By Leave a Comment
In anticipation of the expiration of current loan limits on Sept. 30, 2011, Bank of America has stopped accepting conventional and government applications for loan amounts that will exceed the permanent loan amounts. The deadline to submit loan applications was July 1.
According to an email from Bank of America, conventional loans that exceed the permanent loan limits will now be required to use non-conforming programs.
Barring congressional action, the maximum FHA, Fannie Mae, and Freddie Mac conforming loan limit will decline to $625,500 beginning Oct. 1, 2011, from the current $729,750 limit, though the majority of counties will fall far below the $625,500 maximum. The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.
California Association of Realtors
Short Sale Soundoff: Partial release of lien for short sales
July 6, 2011 By Leave a Comment
The California Franchise Tax Board is accepting requests from taxpayers who have short sold their home and do not have enough funds in escrow accounts to pay the recorded state tax lien in full.
Taxpayers in this situation may apply for a Partial Release of Lien, which releases a specific piece of property from a recorded state tax lien. However, it does not release the lien in its entirety. The lien remains in effect against the taxpayer and continues to encumber other property the taxpayer owns or acquires in the future.
To learn which documents are required to request a Partial Release of Lien and the evaluation process, please visit http://www.ftb.ca.gov/professionals/taxnews/2011/July/Article_1.shtml.
California Association of Realtors
REALTORS®: New loan limit would hurt home sales
June 30, 2011 By Leave a Comment
Unless Congress takes action, the current loan limits will expire on Sept. 30 and the cost of a mortgage could rise significantly, especially in high-cost areas such as California.
More than 30,000 California families could face higher down payments, higher mortgage rates, and stricter loan qualification requirements if conforming loan limits on mortgages backed by the Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac are reduced beginning October 1, 2011, according to analysis by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.
Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.
C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, in 2008, Congress temporarily raised the conforming loan limits from $417,000 to $729,750 and has extended them annually through fiscal year 2011.
To see the impact the lower limits would have on various regions throughout the state, please visit http://www.car.org/newsstand/newsreleases/2011newsreleases/loanlimits/.
Read the full story Orange County Register
Home loans: A call to ARMs?
June 28, 2011 By Leave a Comment
One of the signature loans of the housing boom – the adjustable-rate mortgage – is looking more attractive than it has in years. For some buyers, it may be an even better deal than a fixed-rate mortgage.
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The Wall Street Journal
Foreclosure myths, debunked
June 23, 2011 By Leave a Comment
Although there are a number of programs available to help homeowners who have defaulted on their mortgages keep their home, the large amount of misinformation tends to result in troubled homeowners failing to contact their lender until it is too late.
Making sense of the story
Some homeowners believe, incorrectly, that contacting their lender early in the process will draw attention to their situation and result in a quicker foreclosure. In reality, contacting the lender or servicer is an important first step, and the sooner, the better. Contacting the lender provides the homeowner with an opportunity to explain their situation and the steps necessary to deal with it.
It is a common misconception that missing one mortgage payment will lead to foreclosure. However, the foreclosure process doesn’t begin until payments are 90 days delinquent. Lenders generally have a financial interest in keeping homeowners in their homes, so making contact as early as possible could help lenders modify terms of the mortgage or devise a repayment plan.
Once homeowners are behind on their mortgage payments, it becomes challenging to dig out of the hole. Some homeowners try to solve this by depleting their savings or dipping into their retirement accounts to become current on the loan. Most financial experts advise against this.
Delinquent homeowners may think they should stop making mortgage payments to get their lender’s attention, which often isn’t the case. When possible, homeowners should stay current on their mortgage payments and continue to contact their lender on a regular basis.
Homeowners who have applied for assistance or loan modification programs in the past and were turned down are advised to reapply. Program parameters are constantly changing, so the rules might have been liberalized since the last time the borrower sought help.
A number of free, government-sponsored housing services are available through the Dept. of Housing and Urban Development (HUD). A list of HUD-approved agencies can be found at http://www.hud.gov.
Read the full story Los Angeles Times
A red flag on reverse mortgages
March 19, 2011 By Leave a Comment
It is the saddest of paradoxes: A government-backed financial maneuver intended to free up extra money for struggling older people turns out to have left some widows and widowers on the brink of foreclosure.
Read the full story The New York Times
5 Tax Tips, Tricks and Traps for Homeowners
March 3, 2011 By Leave a Comment
Ask homeowners what’s so great about owning and they’ll holler: “tax deductions!” And it’s true – homeowners who itemize their taxes are able to deduct 100% of their mortgage interest and property taxes from their income tax returns. Here are five essential need-to-knows to help you get the most tax-reducing bang out of your home-owning buck – and to avoid hefty homeownership-related tax traps.
Calculating the annual percentage rate
February 17, 2011 By Leave a Comment
Calculating the annual percentage rate
The lending industry has tried to make it easier for borrowers to understand the true cost of a mortgage by disclosing both its interest rate and its annual percentage rate, or A.P.R. But consumers may often wonder which figure they should focus on when buying or refinancing a property.
The New York Times
Banks push home buyers to put down more cash
February 17, 2011 By Leave a Comment
Many economists and housing analysts blame lax lending standards – including no-down payment, no-document loans – for contributing to the challenges in the current real estate cycle. As a result, most lending institutions have increased minimum down payment requirements. Now, a new proposal by the Obama administration calls for gradually raising down payments to a minimum of 10 percent on conventional loans – those that can be bought or guaranteed by Fannie Mae and Freddie Mac.
MAKING SENSE OF THE STORY
- Banks have found that larger down payments discourage delinquencies by increasing the buyers’ exposure to loss and reducing the impact of declining prices. According to a study by the Federal Reserve Bank of St. Louis, buyers who made smaller down payments were more likely to default during “unfavorable economic circumstances, such as a housing market slowdown or job loss.”
- A recent analysis showed the median down payment in nine major U.S. cities rose to 22 percent last year on properties purchased with conventional mortgages. That percentage doubled in three years and represents the highest median down payment since the data were first tracked in 1997.
- Higher borrowing costs and larger down payments could cause housing prices to decline further, analysts say. For now, borrowers who can’t afford such amounts are turning to alternative programs, such as loans for veterans or those backed by the Federal Housing Administration. Some industry experts say this has created a nonconventional mortgage market for riskier borrowers and those who don’t qualify for conventional loans.
The Wall Street Journal
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