Lots of folks on this forum are faced with homebuyers who may have cash, but cant qualify for a loan becuse they have let their credit become bruised.  Today it takes a solid 700+ FICO score to get a good loan.

If your clients need help with restoring their credit, you can find local credit repair companies in your area at ConsumerCreditGuide.org - the largest directory of credit repair companies and law firms.

Here's how the FICO system works:

FICO score is an aggregate of different data available in your credit report and this data affects the score in a varying proportion. Let us try to understand these factors before discussing further on improving the FICO scores.

Payment history is the largest determinant of the score and accounts for 35% whereas the amounts owed is responsible for the next 30%. Length of the credit history, new credit and types of credit used are the minor factors accountable for 15%, 10% and 10% of the score respectively. This broad categorization can be broken into further sub categories and controlling these sub categories can regulate your score effectively.

• To maintain a good payment history, it is always recommended to pay the bills on time. Try not to miss the payments as much as possible and stay current on all credit cards. Never ignore any collection notice, if you think it is genuine, pay it off otherwise raise a dispute. A collection item stays on your report at least for 7 years; it can not be removed before this stipulated period if it is accurate.
• Always be cautious about the total amount used on each credit card, keep the debt low to maintain a good credit to debt ratio. Pay off the debt instead of moving it around from one credit account to another.
• People mistake closing an unused credit card as a clever decision, but it can affect your score negatively. Do not open new credit accounts unless you really need one. Also do not open new credit accounts, it can impact your score and depress it. However if you have opened new credit account make sure you pay the bills on time, this in fact can leverage your score and reflect a positive status.

So a FICO score is a mix of all information, while an irresponsible behavior can depress your score, a positive pattern can leverage it. Creditors however take into account several other factors apart from your score when approving a loan; these factors include your employment status, income level, type of credit requested etc.

13.16% of all residential mortgages are in trouble.

With about 51 million houses with mortgages in the country, that means 6.71 million bad mortgages out there.

With the number of people out of work still rising, the problem is likely to continue to get worse for quite a while according to an article on the investing blog site Seeking Alpha.  At the end of the second quarter, 4.3% of all residential mortgages were in some part of the foreclosure process, up from 3.85% at the end of the first quarter and 2.75% a year ago. In addition, on a seasonally adjusted basis, 9.24% of all mortgages were delinquent (behind by at least one payment), up from 9.12% at the end of March, and just 6.41% at the end of June 2008.  As a result we have seen a pickup in sales of home alarm systems as people begin to protect their property.

Even good credit borrowers are having to pay attention to their credit score to get financing.

You can read the full article here from personal finance site RateNerd.com.

A couple of interesting articles that could be of interest to first time homebuyers, especially those interested in the $8,000 homebuyer tax credit -

• How to establish credit history - good article on how people with no credit history can build one quickly.
• How to boost credit score to obtain a loan - 5 step plan with a funny name ("Your Credit Sucks") shows how to do it.
• How to buy a home owned by the bank - REO and Foreclosure listings from banks themselves
• Nationwide foreclosure listings 
• Be sure to check out the video from "Flip This House" that shows how quickly vandals can destroy a vacant home before you decide to pursue a foreclosure or REO home - not for the fainthearted.

Any other resoucres you can share?

Not sure if everyone saw this, but this post on  "Prime Borrowers Now Going Into Foreclosure" from RateNerd.com.

Here is an excerpt:

13.16% of all residential mortgages are in trouble.

With about 51 million houses with mortgages in the country, that means 6.71 million bad mortgages out there.

With the number of people out of work still rising, the problem is likely to continue to get worse for quite a while according to an article on the investing blog site Seeking Alpha.  At the end of the second quarter, 4.3% of all residential mortgages were in some part of the foreclosure process, up from 3.85% at the end of the first quarter and 2.75% a year ago. In addition, on a seasonally adjusted basis, 9.24% of all mortgages were delinquent (behind by at least one payment), up from 9.12% at the end of March, and just 6.41% at the end of June 2008.

We continue to have a number of realtors and banks who own REO's purchase LaserShield systems to protect thier REO homes.   The LaserShield Cellular Monitoring bundle pak is particularly well suited for REO homes which typically have electric power but no phone line.

Reposting from Ratenerd.com - click here to see the original post.

If you’re looking for a great deal on a home, check with the bank.  Due to high foreclosure rates, banks have tons of inventory they want to get off their books.  They wont give it away for nothing, and you need to make sure the property has not been stripped to the bone, but bank foreclosed homes for sale are a great deal.

Bank websites have their foreclosed home inventory available for you to search – if you want to find bank foreclosed homes for sale, two of the largest are Chase Bank Mortgage and Bank of America Home Loans.

Banks holding REOs (Real Estate Owned) are pretty easy to deal with. Typically, the property is listed through an agent who may have an asset management company between them and the actual lender. In this case, you can make an offer through your agent or the listing agent and receive a response in a day or two.

Short sales are entirely different and much more difficult. Banks require proof of hardship of the home owner in order to consider allowing a short sale. This usually requires extensive document gathering from the distressed homeowner, followed by a lengthy 2-3 month review period from the bank with no guarantee that the short sale will be approved. This doesn’t mean short sales aren’t worth pursuing, just be prepared to wait for answers and be patient.

How to Buy a Bank Owned Home (REO)

• Know Why You’re Buying. Do you want cash flow or appreciation? Let the math dictate the offer price and know how far you are willing to deviate from your baseline. Real Estate investing is too important to do based on feelings or hunches, if you don’t want to crunch the numbers, work with someone who will.
• Line up your financing. Timing counts when buying REOs. There are other investors looking at the same properties so a deal for you is probably also a deal for a dozen other investors. There are bargain hunters in every market so you must be prepared to act when the right deal comes along.
• Stay Focused. Don’t be disappointed by rejection or failure. It’s called a buyer’s market for a reason; other opportunities will come along as long as you aren’t too busy moping over the one that got away.
• Make An Offer They Cant Refuse. Write a clean, straightforward offer.   Put down at least 1 percent, have reasonable straight forward contingencies, have your financing ready and show you are willing to close in a reasonable amount of time.

I thought this was a pretty good post and worth passing along - explains what a GFE is and how to use it when comparing loans: http://ratenerd.com/whats-a-good-faith-estimate-gfe-from-my-mortgage-lender-1024

I thought I would pass along an unadvertised deal from Medical Home Alert.  This is for the personal emergency response buttons that seniors living alone wear in case they fall or just need help.

Their standard internet deal is free equipment, free shipping and monitoring for $29.95 a month with no long term contract.   but there are two deals you can get if you ask:

1) they will give you an extra pendant or wrist band for free which is good to keep in the bathroom or other area where they may slip and fall, and

2) you can get a free month if you pay for one year in advance.

I thought this was a pretty good deal - your thoughts?  here is the link: www.medicalhomealert.com or 800-800-0213

Thought I would share this article that outlines the impact of the new federal stiumlus bill on mortgages - does anyone else see any other impacts we can take advantage of?

http://ratenerd.com/how-the-federal-stimulus-plan-may-affect-your-mortgage-717

I thought this comment from the Washington Post was interesting:

"In some localities, officers are targeting vacant houses on regular patrols, using maps of foreclosed properties as guides, while working with community watch groups to identify trouble spots. Empty driveways, overgrown lawns, realty signs, lockboxes and "No Trespassing" notices in windows are all signals to would-be violators, police said."

We continue to get orders for home alarms from property owners, banks, builders who are sick and tired of having the double whammy of being ripped off and vandalized.

We are currently offering a two month free trial of our monitoring service, along with a 10% discount on every home alarm system through the end of the year.  Give yourself or your clients the gift of peace of mind this season.