Archive for Foreclosures
Housing Forecast
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With 25 percent of mortgages underwater and high levels of delinquencies, James Lockhart, former director of The Office of Federal Housing Enterprise Oversight (The Great Wizard Behind the Curtain for Fannie Mae and Freddie Mac), says the housing market will need another year or more before it shows signs of recovery.
This all comes before the hangover hits from the homebuyer tax credit, and all the pay option ARMs hit their maximum negative amortization forcing a payment recast and causing more loans to go delinquent. Least we forget the shadow inventory.
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New Hope for Housing: HAMP 2.0
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Obama announces changes to to HAMP
While this modification sounds great each of these programs to help, has garnered little support, and been able to help very few people. The reason that each program has failed is because the guidelines for the customer to qualify are still too stringent.
The program has been modified to attempt to help those that have been effected by the economy through no fault of there own. There is increased incentives for mortgage services to help unemployed homeowners, and for those that owe more than their home is worth. This is still in an effort to help stabilize the housing market.
Eligible homeowners must live in an owner-occupied home, have a mortgage balance less than $729,750, owe monthly mortgage payments that are not affordable (greater than 31% of gross income), and demonstrate some sort of financial hardship.
Today is an important step forward for homeowners, who will now have more options to retain homeownership. The use of principal write down as an additional tool in the Home Affordable Modification Program (HAMP) will offer expanded opportunities in the case of negative equity.
Faith Schwartz
Executive Director
Hope NOW
For more information on HAMP 2.0:
FHA Refinance Fact Sheet for Underwater Homeowners
Here is a video from CNBC that goes over the new developments for HAMP:
If you cannot view the above video on HAMP Updates Click Here.
USDA still needs additional funding for the Guaranteed Rural Housing Program
One item that was completely ignored was increased funding for a program that is already working, USDA Home Loans. A USDA Home Loan is one of the best loans available, it also has the lowest foreclosure rate of any other product available, 1.72%. The Wall Street Journal had an excellent piece talking about USDA Home Loan and the need for Congress to authorize additional funding.
I urge everyone to contact your elected officials immediately and voice your concerns; Authorize additional funds for USDA Home Loans.
16 Signs of Mold
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There are 16 signs that you need mold testing in your home. Mold that produces and releases dangerous toxins into the air can affect a family’s health. Many times we see only one family member affected. There are many things to look for if someone in your home is being affected by these toxins.
Why is Mold Testing Necessary?
Testing for mold is important because mold spores can cause or aggravate many illnesses, including asthma and allergies. Some molds can cause very serious lung infections.
When should Testing Take Place?
Mold testing should be done if anyone in the household is feeling effects associated with fungal contamination. Symptoms include headaches, dizziness, difficulty paying attention, and lack of concentration.
What should I Look for?
The following are signs that mold could be growing in your home and needs to be eradicated:
- High humidity – areas that are prone to high levels of humidity retain moisture for longer amounts of time, fostering mold growth.
- Pipe or water leaks – surfaces that are consistently wet provide a home for mold, and leaks can be difficult to detect
- Flooding – large scale water damage to a home is very conducive to mold growth
- Musty, moldy odors – odors are a good indication that mold is present
- Increased respiratory problems or allergies – a Mayo Clinic study, completed in 1999, found that most chronic sinus problems were caused by mold in the home
- Symptoms of toxic poisoning – signs that family members are being affected include dizziness, headaches, and difficulty concentrating and maintaining an attention span
- Leaky Roof – the attic will show signs of water damage
- Damp basement or crawlspace – moisture in dark environments encourages mold growth
- Rusting or condensation – can be signs of a leak
- Discoloration or water stains on walls – water stains will indicate locations of leaks, while discolored spots may indicate locations of mold
- Peeling paint – the mold could have had a chance to grow before the wall was painted, causing the current peeling
- Warped wood – this is a sign that moisture is present in sufficient levels to allow mold to grow
- Growth of mold in bathroom tile areas – this is a very good indication that mold is growing in other areas of the house
- Visible mold growth – indicates a strong presence of mold elsewhere in the house
- Poor ventilation – if moisture from the home, including appliances, isn’t vented, it can facilitate mold growth
- Wet materials inside the house – any areas of carpet or flooring that are wet frequently can also house mold.
While being unsightly and sometimes difficult to clean, mold should be removed from the home. It causes damage to the home itself, but the most intense effects are upon humans. Breathing mold spores can be very dangerous, especially for the very young or those who are advanced in years or adults with compromised immune systems. If you locate any of these signs in your home, it’s time to conduct testing for mold to see how extensive the problem has grown.
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REO Properties and USDA Loans
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- Flickr photo by Nick Bastina
Did you know you can use the power of a USDA Home loan to purchase a Real Estate Owned (REO) property. Yes, all the deals you’ve been hearing about on homes and a bank presently owns. Sometimes a foreclosure will need a little work, but recently foreclosures have been coming on the market needing less, and less work. With a USDA home loan you can purchase a home at under market value, and with 100% financing, and if the house appraises for enough you can even roll in the closing costs. A lot of lenders are so eager to move these homes that they will offer a closing costs concession, a percentage of the purchase price to use towards your closing costs.
You can use USDA Home Loan financing to purchase a foreclosed, bank owned (REO) as long as the house will be the house you intend on living in (primary residence).
With any home, but especially REO’s you must ensure that the property meets FHA minimum property requirements (MPR). The 3 S:
1. Safety
2. Security
3. Soundness
When you are ready to take the next step to get pre-qualified to purchase a home you can fill out my secure online application. If you’re just looking for just a little more information contact Jeremiah or complete the Live Rate Quote box on the right.
Using a USDA Loan to Purchase a Home After a Foreclosure
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- flickr photo by Respres
A lot of homeowners think that after a foreclosure they will never be able to purchase a home again. A foreclosure does hurt your credit in the short term, but it will not keep you from purchasing a home in the future.
The actual foreclosure event will stay on your credit report for seven (7) years.
So, your house was foreclosed on you’ve moved out now what.
You’ll need to start re-building your credit. One thing you’ll need to make sure is keep track of all paper work from the previous mortgage company. Be sure and get a free copy of your credit report from annualcreditreport.com Check your credit report for errors, if there are errors send supporting documentation to the 3 credit bureaus asking that the error be corrected. By law they have 30 days to investigate or they have to remove the item; however, if it is later found that it is accurate, it will be replaced on your credit. The Federal Reserve Board has a flyer to help you entitled, “5 Tips for Improving Your Credit Score.”
Document the circumstances surrounding your foreclosure. What happened that caused the foreclosure to start, loss of job, medical problems, death of spouse, significant other, etc. The underwriter will want to know that the problem is not likely to recur and that you are in a much better ability to pay a mortgage in the future.
You will need 3 years from the date of your foreclosure until you are able to purchase a house using a usda loan, which allow for 100% mortgage financing. In addition to the 3 year time frame you will also in most cases need at least a 620 credit score.
One thing that will help speed the process if you work with your lender prior to the foreclosure through:
- Forbearance. This is an agreement that lets borrowers make a reduced payment, or none, for a specific period. You might have to make larger payments once the crisis has passed. To qualify, you might need to show that you’re expecting a bonus, a tax refund or other income that will let you catch up.
- Reinstatement. You agree to pay the full amount of your missed payments by a specific date. Reinstatement is sometimes combined with forbearance.
- Modification. Your lender agrees to change the terms of the loan to make payments more affordable. Your lender may agree to add missed payments to your loan balance or extend the term of your loan, reducing the size of your payments.
If you are beyond that point or there is just no way you can afford the current mortgage then it is time to move on:
- Work with your lender and ask if they will accept a deed in lieu of foreclosure. This is where you sign the house over to the lender then they do not have to go through the foreclosure process. You will have to move out immediately. The bright spot for you is that you can begin the rebuilding of your credit sooner than if you waited on a foreclosure.
- Sell your home. More than likely you owe more than your home is worth. So, you will need to sell as a “short sale”. You’ll want to contact a short sell investor or a Certified Distressed Home Seller Real Estate Agent. While you may try selling yourself, this will not get you the exposure your home needs to sell quickly.
For a free copy of our Consumer Credit Scoring Booklet, contact Jeremiah Wean.
