the notoriety that subprime loans gained as a prime cause of the
financial crisis, they are re-emerging, under much more careful control,
as one answer to the tight lending standards that have shut out
millions of would-be homeowners.
call it the sane subprime,” said Brian O’Shaughnessy, chief executive
of the Athas Capital Group, which gave the Arroyos their loan.
loans, which accounted for about 15 percent of all new home loans in
2005 and 2006, are now a tiny sliver of the mortgage market. Only a
handful of lenders are offering them, at interest rates from 8 to 13
percent (compared with about 4 percent for conventional loans to highly
rated borrowers). For the full article, see the New York TImes:http://www.nytimes.com/2014/06/29/business/in-home-loans-subprime-fades-as-a-dirty-word.html?smid=fb-share&_r=1
A settlement involving the mortgage-servicing company Ocwen could
result in up to $8 million in homeowner relief for New Mexicans.
New Mexico Assistant
Attorney General Kenneth Owens said part of the settlement will come in
the form of principal reductions for homeowners who are currently
underwater on their mortgages. The other part will be direct payments to
homeowners who were foreclosed on by Ocwen between 2009 and 2012.
People who believe they were wrongly foreclosed on have until Sept. 15
to file a claim for direct payments.
The settlement came in
regards to complaints that Ocwen was engaged in a practice called
“robo-signing,” Owens said. This occurs during the foreclosure process
when banks must provide affidavits confirming the accuracy of
information contained in foreclosure documents.
Ocwen also acted improperly with some homeowners during the loan-modification process, Owens said.
“Ocwen would sometimes be
contacted by the homeowner asking to do a loan modification, and Ocwen
would provide incorrect information to them,” he said. “They never
really gave the person a fair opportunity to get caught up on their
Homeowners wishing to file a claim against Ocwen for mortgage relief or direct payments can do so by clicking here.
The National Home Builders just released a study concluding that when the national median home price increased $1,000, 200,000 buyers are priced out of the market. This analysis suggests that sellers of homes of any price lose potential buyers when they over-price their properties. In other words, a seller can estimate the number of qualified buyers that exist to buy a home at $165,000. That number of buyers gets smaller when the price goes to $166,000. The number of potential buyers continues to decrease every time the home price increases.
The bottom line is sellers are better served pricing their home realistically from the beginning because that opens their home to the largest pool of buyers. http://www.nahb.org/generic.aspx?genericContentID=174956
The Fair Housing Act
, 42 U.S.C. 3601 et seq.
prohibits discrimination by direct providers of housing, such as
landlords and real estate companies as well as other entities, such as
municipalities, banks or other lending institutions and homeowners
insurance companies whose discriminatory practices make housing
unavailable to persons because of:
A clean credit report opens up a life of convenience and opportunity. Yet, roughly 77 million Americans, or 35 percent of adults with a credit
file, have a report of debt in collections. These adults owe an average
of $5,178 (median $1,349). Debt in collections involves a nonmortgage
bill—such as a credit card balance, medical or utility bill—that is more
than 180 days past due and has been placed in collections. http://www.urban.org/publications/413191.html.
Consumers can help themselves by consulting with an experienced loan officer or reviewing their credit report then addressing each negative credit item one by one. Follow up on thirty day cycles until your credit report is clean enough that old information is not continuing to do you harm.
Take this one as a life changing project. Encourage and help your friends and family to do it too.
There are some things you can do to help yourself, friends and family prepare to buy a home. Here they are:
1. Student Loan Debt. Restrict your student loan's to as few as possible and make your payments or deferment requests on time.
2. Strict Lending Standards. Keep your credit report clean by making payments as agreed, avoid debt, and disputing credit report entries you thinkg are wrong.
3. High Home Prices. Ask your broker for a portal containing homes that fit your needs and get to know the market. Be ready to act when a good deal can be had.
4. Down Payments. First time home buyers should ask their lender for assistance resources. Veterans can borrow with no down payment. Everyone else should have at least 3.5% in a traceable bank account for their down payment.
5. Credit Score. Keep an eye on your credit report and clean up your report.
6. Property Taxes. Borrowers have a monthly payment consisting of principle, interest, taxes and insurance. Include all four items in your mortgage payment estimates.
Call me with questions.
You Need a Smaller Down Payment than You Think
Home buyers often can qualify for a conforming,
conventional mortgage with a down payment of as little as 5 percent —
and sometimes even 3 percent. Between 2009 and 2013,
Freddie Mac’s purchases of mortgages with down payments of less than 10
percent more than quadrupled. So far in 2014, more than one in five
borrowers who took out conforming, conventional mortgages put down 10
percent or less.
Depending on their credit history and other factors, many borrowers can
expect to make a down payment of about 5 percent or 10 percent.
However borrowers who puts down less than 20
percent may pay a higher interest rate or be asked to buy mortgage insurance.
There are abundant
down-payment assistance programs that exist to help buyers break into home
ownership. Every state in the U.S., as well as many cities and counties,
offer down-payment assistance programs for qualified borrowers, such as
the American Dream Downpayment Initiative and HOME Investment Partnerships Program.
Many buyers prefer a larger down payment for a variety of reasons that make good investment sense. But, if you want to buy and your down payment resources are in the 3-10% range you still have good buying power and should check with your real estate broker and mortgage lender to get your plan organized.
Source: “Down Payments: Today’s Most Persistent Misconception About Mortgages,” Freddie Mac (June 16, 2014)