Dec 30, 2009
The 'Other Side' of the Loan Modification Story
Applying for a mortgage modification and being in a months-long trial period can devastate a home owner’s credit score.
Under the government plan, troubled borrowers can have their mortgage payments reduced to 31 percent of their pre-tax income. They are first put in a trial modification for several months to test whether they can meet the requirements of the new mortgage.
Borrowers who were previously current on their mortgages will see their FICO scores fall about 100 points while they are in the trial period, according to the Treasury Department. Borrowers who were previously late or missed payments will see their scores fall more, the government says.
The longer a borrower is in the trial period, the greater the impact on their credit scores, Once the modification is approved, the borrowers’ mortgage credit status will be listed as current and that should improve their scores, the Mortgage Bankers Association explains.
Even so, the delinquency remains on credit reports for up to seven years and can make getting credit for something else like a car difficult and expensive, borrowers report.
Source: CNNMoney.com, Tami Luhby (12/28/2009)
Dec 21, 2009
Selling Your Home-These low cost ideas may help!
Dec 16, 2009
Buy a New Home for LESS than $85,000-- Consider Purchasing a Condo.
New FHA Guidelines Could Aid Condo Sales
In an effort to continue to support the recovery of the Real Estate market in our neighborhoods, the Federal Housing Administration has provided new condo-loan guidelines that took effect Dec. 8 could make it much easier for condo buyers to get a loan. (Hooray!)
Under previous guidelines, half the units in a new condo development had to be sold before the FHA would underwrite a mortgage in the complex. New guidelines cut the requirement to 30 percent and raise the ceiling on FHA loans in a development to 50 percent from 30 percent.
The new rules also allow condo associations to turn down an accepted offer if they agree that it’s too low—unless they will be violating the Fair Housing Act. This is expected to motivate many associations to seek FHA-approved status for their buildings.
Even if they solve the vacancy problem, FHA loans can be a tough sell in some buildings, says Miami-area practitioner Madeleine Romanello, an associate with Douglas Elliman Florida.
"An FHA loan still has the connotation of being low-income. Condo boards say, 'No, we don't do FHA.' They don't understand that the FHA is the only game in town. We could be moving tons of condos if we could get their buildings FHA-approved," Romanello says.
Dec 10, 2009
Round 3: Short Sale Structure
After a long, difficult year for banks, struggling to handle the slew of homeowners trying to gain permission to sell their home for less than they owe, the U.S. Treasury Department announced new guidelines this week designed to make short sales go more smoothly.
To qualify under these new guidelines:
- The property must be the home owner’s principal residence.
- The home owner must be delinquent on the mortgage or close to defaulting.
- The loan must have been made before Jan. 1, 2009, and be for less than $729,750.
- The borrowers’ total monthly mortgage payment must exceed 31 percent of their before-tax income.
Under the plan, borrowers will receive $1,500 from the government for selling homes for less than the amount of their mortgages. Mortgage-servicing companies will get $1,000 for each completed short sale. Second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgage can collect up to $1,000 from the government for allowing the payments.
Borrowers who complete a short sale under the program must be "fully released" from future liability for the debt, according to the guidelines.
Dec 9, 2009
Survey Says
Tampa is #8 on the list of areas with the Most Overpriced Properties
Despite having no luck selling their properties, homeowners in some parts of the country have clung tenaciously to their notions of the value of their homes.
Forbes magazine ranked markets it considered the most overpriced based on the ratio of the median initial list prices compared to the median list prices at the time the properties actually sold. It also factored in how long the properties stay on the market.
In addition, the magazine considered expert forecasts of price increases in the areas, which could be what encourages homeowners to price high.
The top 10 areas where Forbes found the most over-priced properties were:
1. Orlando
2. Miami-Fort Lauderdale-Pompano Beach
3. Jacksonville, Fla.
4. Baltimore-Towson
5. Chicago-Naperville-Joliet
6. San Antonio, Texas
7. Denver-Aurora
8. Tampa-St. Petersburg-Clearwater
9. Indianapolis-Carmel
10. Austin-Round Rock