June 2007
Monthly Archive
30 Jun 2007 04:56 am
Credit Boosting Websites May Be Running Out of Time
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[tag]Credit boosting[/tag] works like this: Folks with low FICO (credit) scores, such as a number in the low 500s, have a hard time qualifying for a mortgage with today’s guidelines. However, federal regulations allow for people with good credit to have authorized users on credit cards and other loans. The person with bad credit is instantly linked to the history of the person with good credit, although they have no access to the actual credit cards or loans. This can almost instantly inflate a credit score 200 points or more. |
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29 Jun 2007 07:18 am
How Wall Street Precipitated The Mortgage Meltdown
| Today, there are numerous examples of how Wall Street’s money and expertise have helped transform subprime lending into a major force in the U.S. financial markets. The mortgage lenders claim they are proud of their role in helping provide credit to consumers who might otherwise have been unable to buy a home, and proud of the controls they have brought to a sometimes-unruly business. Now, however, that business is in deep trouble, and some consumer advocates and policy makers are pointing the finger at Wall Street. Roughly 13% of [tag]subprime loans[/tag] stand in or near foreclosure, bringing turmoil and sometimes eviction to tens of thousands of homeowners. Dozens of lenders have gone out of business. |
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28 Jun 2007 04:10 am
Another choice for home financing.
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Lenders and brokers both perform a variety of [tag]loan origination[/tag] tasks, which include finding, counseling and [tag]qualifying borrowers[/tag], taking applications, [tag]checking credit[/tag], and verifying employment and assets. But the lender is the one who must approve the deal and disburse the money to the borrower. Mortgage brokers usually are not authorized to provide final loan approval, nor do they disburse money. Suppose that at closing, the lender lends the broker enough money for the broker to fund the loan in his own name, then 10 minutes later when the transaction is completed, the broker sells the loan to the lender. Would this convert the broker into a lender? If we define “lender” as the entity who disburses funds to the borrower and receives back a note and mortgage, then the answer has to be “yes.”
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27 Jun 2007 07:29 am
Treat Bankruptcy Symptoms Early
| Homeowners and renters facing rising rents and others who, for whatever reason, just can’t financially hack it, are beginning to bang at the double doors of bankruptcy court again. The American Bankruptcy Institute reported in May that bankruptcy filings increased 51.3 from May in 2006. AICCCA says of 400,000 consumers it counseled since the new law went into effect in October of 2005, more than 95 percent of them went on to file for bankruptcy. That’s often because by the time consumers make it into counseling, their potential for [tag]bankruptcy[/tag] already critical. |
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26 Jun 2007 06:55 am
Credit scores influence more than lenders
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According to Bankrate.com, [tag]credit score[/tag]s heavily impact home and [tag]auto insurance[/tag] coverage and rates. With a poor score, you could be denied insurance outright, which is especially tough in cases where the law requires insurance. People with [tag]bad credit[/tag] are assigned to a higher risk group, as insurance companies are finding a correlation between bad credit and a higher number of claims. The logic being that fiscally irresponsible people might turn to insurance as source of revenue, turn to insurance too frequently, pad claims or make dishonest claims. |
25 Jun 2007 07:38 am
12 free credit monitoring strategies
| The United States Congress has guaranteed a free once-a-year glimpse into your credit files. But, how do you keep an eye both on your credit and on costs? Here are a few suggestions.
1. Catch mistakes before they make it to your report. Double-check your [tag]credit card[/tag] and other lending statements to make sure you were credited for last month’s payment and that all charges are yours.
2. Stagger your free reports for year-round monitoring. The only place to get your federally guaranteed [tag]free credit report[/tag] is through the annual credit request service.
For the complete list, chick here. |
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24 Jun 2007 06:51 am
What Everybody Ought to Know About Your FICO score
| Millions of U.S. homeowners have purchased homes “subject to” an existing mortgage. If they fail to make the payments, they can lose their property by foreclosure. That is your son’s situation. What matters is he must be on the title and be legally obligated to make the payments or risk losing the property. When you added his name to the title, he became eligible to claim the income-tax mortgage interest and property-tax deductions. |
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23 Jun 2007 07:15 am
Understanding Your Mortgage Closing Costs and Fees
| As an informed mortgage customer, you should make your mortgage banker walk you through each cost, and explain in detail what you are paying. The bottom line is that you don’t want to be surprised at the last moment. Imagine getting a call from your mortgage banker the day of your closing with a message that your [tag]closing costs[/tag] are $1,200 more than you thought. And the only explanation is that the [tag]title company[/tag] made a mistake. Chances are you may have to reschedule your closing to get the money together for the difference, or have your mortgage adjusted to have the amount rolled in. |
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22 Jun 2007 06:42 am
Is It Smart To refinance to make ends meet?
| Sometimes it doesn’t make sense to refinance. For example, say that you will be paying 2 points on $115,000 ($2,300) and total closing costs are around $5,000. You may be considering paying this to get some temporary relief in your monthly budget. So, [tag]paying points[/tag] when you plan to be out of the house in a year raises the effective rate on your [tag]mortgage interest[/tag] to over what you’re paying today.The points aren’t spread out over 30 years, they’re spread out over one year. |
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21 Jun 2007 06:53 am
Discussing 10 financial urban legends
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Rooted in many myths is the tiniest grain of reality. Listed below are a few, read the entire list on MSN :
* Myth No. 1: You can [tag]float a check[/tag] longer if you write in red ink. The theory is that a bank’s equipment can’t scan red ink, so it takes longer to process the check.
* Myth No. 2: You don’t have to pay [tag]income tax[/tag] — it’s illegal. Only [tag]foreign income[/tag] is subject to Uncle Sam’s cut, the story runs, and there’s a form you can file to exempt yourself. But no one will tell you about it.
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20 Jun 2007 06:26 am
SEC aid sought on subprime rule
| At issue is when a mortgage can be modified if it is part of a pool of securities that includes [tag]subprime adjustable rate mortgage[/tag]s made to borrowers with a poor credit history. Lawmakers and federal banking regulators are seeking ways to move [tag]subprime borrower[/tag]s into mortgages with [tag]fixed long-term interest rate[/tag]s, but the accounting rule might prove to be an accounting or legal obstacle. The lawmakers said they want to know if a loan might be modified at a point when default is reasonably foreseeable or at a time when default or delinquency has already happened. |
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19 Jun 2007 06:05 am
Valle Crucis NC Luxury Estate | NC Mountain Property
This is a 1031 Exchange Income Property.
39.4 acres with 360 degree view of Blue Ridge Mountains.
5,200 sq. ft. main house built in 1990 on 1.24 acres.
Five cottages each built in 1996 on approx. 1/2 acre sites.
No restrictions and no zoning offer many other options:
* Family compound
* Corporate retreat
* Religous retreat
* Horse farm / Dude ranch
* Recording studio
* Cottages can be sold separately
* Land can be further subdivided if desired
click here for more information
18 Jun 2007 07:19 am
Analyzing The Desperate measures for the mortgage business
| During the height of the [tag]real estate bubble[/tag], [tag]mortgage lenders[/tag] were often shameless in how they pursued new business. Whether it was jacking up [tag]hidden closing costs[/tag] to make loans appear cheaper than they were or using absurdly-low teaser rates on option- or interest-only ARMs to get customers in the door, lenders made owning a home seem easy. Many mortgage lenders all across the country are heading for financial trouble because they have made too many questionable loans. Some lenders may even go out of business. And what will become of the people who trusted those lenders if that happens?” |
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17 Jun 2007 08:51 am
The Federal Housing Administration, An Alternative to the Subprime Market
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As discussed in The Post, there is talk of coming up with a new way to provide mortgages to the credit-impaired borrowers the [tag]subprime[/tag] market serves. The [tag]Federal Housing Administration[/tag] is the only plausible substitute. But converting the FHA into a viable substitute for the subprime market would require a number of far-reaching changes. A core feature of the subprime market is risk-based pricing over a very wide range. On the price sheet of a typical[tag] subprime lender[/tag], the interest rate on the worst risk is seven to eight percentage points higher than the rate on the best risk. For the FHA to operate effectively in this market, it must do the same. |
16 Jun 2007 07:54 am
Lower Home-Price Appreciation Fuels Subprime Delinquencies
| Areas of the U.S. with greater [tag]house-price appreciation[/tag] last year tended to have lower [tag]delinquency rate[/tag]s on subprime mortgages. Distressed borrowers in a strong housing market may have also been better positioned to pursue alternatives to delinquency. Those borrowers could have built up more home equity and been better able to sell back their home to pay back the remaining principal or to refinance existing mortgages to ones that would offer lower, more affordable payments. |
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15 Jun 2007 08:02 am
Here is a Method To Find That Perfect Vacation Home
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Baby boomers with discretionary dollars to spend have fueled an increase in the number of [tag]vacation home sales[/tag] in recent years. In fact, the National Association of Realtors reported that a record 1.07 million vacation homes were sold in 2006, a 4.7% increase over 2005. While the majority of buyers, 79%, said that they bought the home to use for vacation or as a family retreat, 34% said a reason for buying was to diversify their investments, according to the Realtors’ survey. Twenty-eight percent said they planned on using the home as a primary residence in the future, and 25% said the tax benefits were a reason to buy. And 21% bought because they had extra money to spend; 18% of buyers planned on renting out their homes. |
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14 Jun 2007 07:17 am
Understanding Why Homeowners Are Fleeing Grasp Of ARMs
| With interest rates as high as they’ve been in 10 months, homeowners are [tag]refinancing[/tag] in droves to fixed rate mortgages. That could be a smart and timely move for those who can qualify for the switch. Even a higher rate on a [tag]fixed rate mortgage[/tag] (FRM) now could be a better deal than holding onto an [tag]adjustable rate mortgage[/tag] (ARM) in the process of upward interest rate adjustments. It’s a lot easier to budget for mortgage payment based on a stable fixed rate rather than scramble every six months or so to keep up with payment adjustments on an ARM. |
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13 Jun 2007 07:28 am
The Secret of Acquiring A Commercial Loan For Rental Property
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Ignore those late-night infomercials, the ones that promise huge returns with [tag]no money down[/tag]. Experienced landlords agree that the upfront costs are usually higher, and the returns lower, than those promoters would have you believe. Lenders typically expect down payments of 20% to 25% for rental property, said Bill Moore, co-founder of Landlord.com, and some lenders want as much as 40% down. Your loan will be more expensive than a typical [tag]residential mortgage[/tag], as well, because lenders believe investors are more likely to walk away from a rental than they are from their own home. |
12 Jun 2007 07:02 am
Little Known Ways to finance construction of a home
| [tag]Construction loans[/tag] are [tag]interest-only loan[/tag]s, typically at a floating (adjustable) interest rate. The builder receives draws from the loan proceeds as construction progresses. The loan comes due when construction is finished and there is a certificate of occupancy on the property. Most home buyers will need permanent financing to repay the construction loan. [tag]Construction-to-permanent financing[/tag] establishes the structure of both loans upfront. Instead of paying closing costs on two loans, there’s only one set of closing costs. The ability to lock in a fixed rate on the permanent financing will depend on both your lender and how long it will take to build the house. |
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11 Jun 2007 07:01 am
The Art of Successfully Buying A Second Home
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The best of the best of these lists are presented with a pinch of intrigue, turn of phrase, or perhaps a dash of humor. They hold our interest captive for the few fleeting moments we have to spare, but then leave us sated with pointed information. Craig Venezia, author of the new “[tag]Buying A Second Home: Income Getaway or Retirement[/tag]” (Nolo, $24.99) offers one such list for the second home crowd. Venezia is a contributing real estate writer for the San Francisco Chronicle who telecommutes to work from his Boston-area home. He also served as a Wells Fargo executive, worked closely with ETrade Financial and knows the ins and outs of structuring private loans between family and friends. |
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10 Jun 2007 07:54 am
Solar-Panel Rebate System Helps Spur Demand and Prices
| Putting [tag]solar panels[/tag] on homes is especially costly right now, as backlogged installation companies accommodate customers willing to pay more. This is especially true in California, where a time-sensitive rebate system has homeowners trying to cash in on incentives before they shrink, and before summer utility bills start arriving. Most solar panels are made from silicon, a product used in the semiconductor industry. Though several new silicon plants are in the works, most won’t be operational for a few years. Solar panels that don’t rely on silicon aren’t as widely used because they either can’t produce as much energy or are still being tested. |
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09 Jun 2007 08:30 am
Can we expect a low-rate future?
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From 1963 to 2001, the mortgage-rate low was 7 percent. In that same span, the Fed got to a recession-bottom 3 percent in 1993, but was above 5 percent or going there quickly all the rest of the time. The first half of that 38-year interval was distinguished by the Fed’s epic error in tolerating inflation until it got out of control in 1979, and the inflation fight thereafter, victory in 2001. Then the money world turned on its head (no, NOT 9/11): deflation became the problem, and the Fed eased to 1 percent (go back 50 years to find that). |
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08 Jun 2007 07:05 am
What can seller do if mortgage approval is cancelled?
| Your closing is just around the corner and you discover that your [tag]lender has gone bankrupt[/tag]. Or, maybe because of the chaos in the [tag]subprime market[/tag] the lender has changed underwriting standards so you no longer qualify for the loan for which you had been [tag]preapproved[/tag]. After you’ve signed a contract but before you’ve gotten your [tag]mortgage acceptance letter[/tag], you can probably get your deposit back and walk away, if that’s what you want. If you want the house but need more time, you can ask the seller to move back the [tag]mortgage contingency deadline[/tag] or closing date. |
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07 Jun 2007 05:21 am
Understanding How To Use Real Estate to Build Your Retirement Portfolio
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By law, [tag]IRA[/tag]s cannot hold certain assets including life insurance and collectibles such as art, antiques, gems, coins, and most precious metals. Because there is no approved list of investments for IRAs, many view the rest of the investment universe as fair game. Stories of people using IRA money to purchase everything from thoroughbred horses to football season tickets have long circulated in financial-services industry circles, although more typical self-directed IRA fare might include interest in [tag]private equity partnership[/tag]s or commodity pools. |
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06 Jun 2007 06:40 am
Here is a Method That Might Help You Prevent Foreclosure
| You have a 1-in-3 chance of losing your house to [tag]foreclosure[/tag] if you got an [tag]adjustable-rate mortgage[/tag], or [tag]ARM[/tag], in 2004 through 2006 that had an initial teaser rate of less than 4%. If you got a subprime ARM in that period, you started out with a higher rate, and that puts you at less risk. You have a 1-in-8 chance of losing your home. Researchers assume that property values will remain relatively flat from their December 2006 levels. If house prices fall — and in many markets, they already have fallen since the start of the year — foreclosures will be higher than his estimates. If house prices rise, there will be fewer foreclosures than forecast. Each 1% rise or drop in house prices will translate into a decrease or increase of roughly 70,000 in foreclosures. |
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05 Jun 2007 06:45 am
The Interest Is In Interest
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A year ago [tag]mortgage rates[/tag] were actually higher than today — 6.67 percent according to [tag]Freddie Mac[/tag]. In other words, those who believe the glass is half full can say that rates have declined. But rates might rise higher still if there’s a belief that the country is growing too fast and is facing inflation. Even tepid growth estimates announced for the first quarter of 2007 turned out to be overblown. We’re not growing at 1.3 percent, but instead at just .6 percent. According to Commerce Secretary Carlos Gutierrez, definitely a half-full kind of guy, “our economy continues to chart a course of growth marked by historically low unemployment and rising wages. Numerous headwinds still haven’t knocked our economy off its 22 straight quarters of growth.” |
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04 Jun 2007 07:16 am
Understanding why adjustable-loan borrowers are the big losers
| Investors in securities issued against pools of [tag]subprime mortgages[/tag] have also felt pain, as the market value of these securities has declined. Lehman Brothers estimates the decline at $19 billion. Most of it is concentrated among the riskiest of the securities, which promised the highest yields. (No collection plates are being passed for them, either.) Securities rated AAA, which are first in line to be repaid and last in line to take losses, have been impacted very little. Mortgage brokers have not been significantly affected. A few have lost access to [tag]subprime lenders[/tag], but most of them have been able to replace defunct lenders with other lenders. |
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03 Jun 2007 08:58 am
Here is a Method to avoid predatory lending
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Any senior facing financial problems should confide in family and friends. Shame too often drives seniors to strangers. Seniors who are behind on their mortgage should contact their lender. If possible, the lender will try to work something out with the borrower to avoid foreclosure. For help working with the lender, the senior should call a HUD-certified counseling agency, which can give the senior advice on all available financial options. Stay away from people who come to the door offering to ‘rescue’ the house from foreclosure! And finally, people thinking about obtaining a [tag]home loan[/tag] should be sure they understand the language in their loan documents before signing them and should be careful before agreeing to an [tag]adjustable-rate loan[/tag]adjustable-rate loan. |
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02 Jun 2007 06:26 am
Here’s a Quick Way To Reduce The Hidden costs of owning a new home
| The lifetime cost of owning a new home includes your [tag]mortgage payments[/tag], [tag]property taxes[/tag] and [tag]homeowner’s insurance[/tag]. It also includes the estimated cost for utilities, maintenance (repainting for example) and replacement of various “body parts” as they wear out. While most [tag]new-home buyers[/tag] rarely take the lifetime cost into account, it is a routine consideration for many, if not most, institutions, commercial enterprises and government agencies, as they begin to plan a new building that they expect to occupy for the next 30 to 50 years. As a result, these building owners often specify materials that cost more initially but last significantly longer. |
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01 Jun 2007 06:35 am
The Secret Of Qualifying For A Prime Mortgage
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As a homeowner with an expensive [tag]subprime mortgage loan[/tag] you signed on for, you may have actually qualified for a [tag]prime mortgage[/tag] with much lower interest rates. Subprime loans are usually designed for borrowers with damaged or sketchy credit histories. Lenders charge higher rates to these customers to offset the extra risks they take on. Prime loans are usually granted to borrowers with credit scores of 650 or higher. Freddie Mac, a government-sponsored mortgage-loan buyer, estimated that borrowers of 15 to 35 percent of all subprime loans it bought in 2005 could have qualified for prime-rate loans. |
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