In a joint effort to cool the raging foreclosure crisis, six of the nation’s largest mortgage lenders have agreed to temporarily stop foreclosure proceedings on homeowners who have fallen seriously behind in their house payments.

Efforts to foreclose on seriously delinquent borrowers will be postponed for 30 days while lenders and borrowers try to work out payment options. Known as Project Lifeline, the program will not be confined to borrowers with adjustable rate mortgages.

These ARMs have recorded the highest rates of delinquencies, even as default for loans of all types have risen dramatically over the past couple of years. (more…)

search for : foreclosure crisis, stop foreclosure, delinquent borrower

According to this author, mortgage brokers abuse borrowers when they collect a rebate from the lender for delivering a high-interest-rate loan without the knowledge of the borrower. I developed the Upfront Mortgage Broker program largely to deal with this problem.

Upfront Mortgage Brokers (UMBs) agree in writing with borrowers to a specified total fee, which includes any payment received by the broker from the lender. The borrower elects how to pay the fee, either in cash at closing or in a rate high enough that the lender will pay a rebate to the broker. (more…)

There is good news and bad news in the mortgage industry. First, rates are down, but the bad news is that it is much harder to qualify for a refinanced loan these days. Moreover, the borrowers who need to refinance the most, because their adjustable rate mortgages (ARMs) are resetting to higher interest rates, are among those having the most trouble winning approvals.

During the boom years, lenders approved most anyone with a pulse. Not so today. Mortgage brokers recognize this and are now being very selective about the clients whose applications they choose to submit to their lender network. (more…)

Beautiful Wilkes County NC Timber Frame Home and Mountain Property.

MLS Number: 51166, List Price: $898,500

2 Bedrooms, 2 Baths, 2 half baths, 2 car attached garage, full basement, and a barn on 5 acres of land.

These terms are used to describe thousands of homes and yet some things just can’t be described, they have to be experienced. This is one of those homes that really has to be seen to be appreciated.

This majestic Timber Frame home of the Bob Timberlake genre is not just another house, it provides a feeling of home that is not about walls and floors and windows and doors. It creates a feeling of the flow between your outdoor and your indoor environment that is seamless. Everywhere you look there is a view. Everything you touch feels natural and beautiful in a way that cannot be described, only owned.

Contact Elizabeth Carter, 336.973.5594 or Greg Stikeleather, Broker, 704.880.5247 or email eacarter@charter.net

click here for more information

As lenders suffer from defaulted mortgages, they are learning that the number of people who bought homes as investments is much greater than previously believed. Such borrowers turn up frequently in analysis of loans that defaulted within months after origination. In many cases, these speculators lied on loan applications, saying they intended to live in the homes in order to obtain more favorable loan terms or failed to provide the requested information.

Approximately 20% of mortgage fraud involved “occupancy fraud,” an industry term to describe the situation when borrowers falsely claiming they intended to live in a property. Another study looked at 45 subprime loans that defaulted within the first 12 months even though the borrowers had good credit scores. In two-thirds of the cases, borrowers said they intended to live in the property but never moved in. (more…)

search for : occupancy fraud

More than 2 million homeowners are in trouble with their debt payments. And a new study shows that more than half of homeowners who become delinquent on their loan payments ultimately go into foreclosure.

However, just for those beleaguered homeowners, the new Mortgage Forgiveness Debt Relief Act of 2007 is supposed to provide some relief to those who sell their homes short; that is, sell for less than the mortgage amount.

Prior to the new law being signed, if your lender agreed to a short sale, the IRS considered the difference between what you sold for and what you owed taxable income. So, just as you were starting to move on with your life, having lost just about everything, the following April 15 you’d have owed the IRS income tax on what amounted to phantom income. (more…)

Many holders of home-equity loans and lines of credit are benefiting greatly from the string of recent Fed rate cuts. Since home-equity rates are often based on the prime rate — which drops every time the federal funds rate is cut and now sits at 6% vs. 7.75% in September — interest payments on many home-equity products have fallen.

The not-so-good news, as some homeowners are finding out, is that it’s more difficult to get approved for one of these loans lately. As they have with first mortgages, many lenders have tightened their underwriting guidelines on home-equity loans and lines of credit in recent months, often requiring that borrowers have higher credit scores and a larger amount of equity built up in their homes.

In many cases, homeowners who do qualify can’t get as big of a loan as they once could have. (more…)

search for : home-equity loan

Part of the recent Countrywide Financial Corp.’s earnings release was the news that its $32.4 billion portfolio of prime home equity lines of credit (HELOC) had begun to rapidly deteriorate. The lender was forced to take a $704 million charge related to homeowners’ inability to pay back equity they extracted from their homes.

Once a certain threshold of losses is achieved in a home equity loan securitization pool, the bond holder is paid off ahead of the lender. What’s worse is that it’s difficult to see how large a lender’s exposure is to home equity loans.

In the short-term, this is just another blow for a investors in the financial sector. Longer-term however, it looks like a lot of ready cash is getting taken away from homeowners, at least in California. (more…)

search for : home equity lines of credit