Have you fallen behind on your mortgage payments? Has your lender asked you to contact them? If so don't ignore the letters from your lender Get hold of the lender as soon as possible.
1. Don't ignore the problem.
The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house. Be proactive
2. Contact your lender as soon as you realize that you have a problem.
Lenders are not looking to own your house. They have options to help borrowers through difficult financial times.
3. Open and respond to all mail from your lender.
The first notices you receive will offer good information about foreclosure prevention options. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.
4. Know your mortgage rights.
Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and time-frames in your state (as every state is different) by contacting the State Government Housing Office.
5. Understand foreclosure prevention options.
Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the Internet at www.fha.gov/foreclosure/index.cfm.
6 Prioritize your spending.
After health-care, keeping your house should be your first priority. Review your finances and see where you can cut spending. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.
7. Use your assets.
Use your assets like a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.
8. Avoid foreclosure prevention companies.
You don't need to pay fees for foreclosure prevention. Rather use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services a Realtor or a HUD approved housing counselor will provide free if you contact them.
9. Don't lose your house to foreclosure recovery scams!
If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.
10. Don't just give up.
You have options, get educated and save your home.
Dear Dave, I just received a notice of default letter from my mortgage lender that says my house will go to auction sale in four months. Can house still be sold by owner? -- Sue
Dear Sue, It appears that you are right in the beginning of the foreclosure process, but as long as the house is still in your name you can save it. While you need to be careful, you also need to act quickly. Four months can seem like a long time but it can go by in a flash. So let's get right down to what your options are.
7 possible do's when foreclosure looms:
1. Sell the property: If you can find a buyer before the house is auctioned, you can sell it and keep whatever equity still exists.
2. Work out a deal: Your lender may be willing to work with you, rather than lose money at a foreclosure sale.
3. Refinance with a subprime lender: Your credit is poor right now because of the mortgage delinquencies. This means most or all of the traditional banks will not work with you. However, if there is equity in the property, you may be able to find a lender who will refinance you -- at a higher-than-normal rate. These are called subprime loans, and they're increasingly common: About 20 percent of mortgages today are subprime.
4. File Chapter 7 bankruptcy: If you can't get caught up in time, you will not be able to keep the house -- but you'll generally be able to delay the foreclosure sale a month or even several months. Any remaining debt to the lender will be wiped out.
5. File Chapter 13 bankruptcy: If you can afford to make the future mortgage payments and the delinquent payments, too, file for a Chapter 13 bankruptcy. This is different than Chapter 7, in which assets are liquidated but debts are wiped clean. With Chapter 13, you keep your assets and, under court supervision, you repay your debts under a three-to-five-year plan.
6. Short sale/deed in lieu of foreclosure: A short sale takes place when the bank allows you to sell your property even though their mortgage won't be paid. Be careful -- the bank may allow the sale to go through, but only on the condition that you repay the deficiency. In a deed in lieu of foreclosure, the property is signed over to the bank in exchange for the bank giving up its rights against you. When might a bank agree to either of these? Lenders spend close to or more than $30,000 to foreclose on a property. Most lenders will consider these options to avoid foreclosure costs.
7. Walk away from the house: Pack your things and leave. The only issue remaining is whether your lender can sue you for any deficiency still owed after the sale, and that depends on the state you live in and the type of mortgage you have. You'd be wise to speak to an attorney before taking this step.
Any sale or transfer of property has tax consequences, including a foreclosure sale or a deed in lieu of foreclosure. Seeing an accountant is probably a good idea, as well.
Here are two options NOT to consider. In other words, they're scams
1. Signing over your property title to another company: Some companies say that after the mortgage is current they will re-sign the property back over to you. This rarely happens. Instead, the company is likely to pull out equity, not make any mortgage payments and allow the property to be foreclosed. You will not be able to save the property from future foreclosures because the property is no longer in your name. 2. High-interest second mortgage: When a property has equity, there are companies that will give you a second mortgage, in an amount as high as 70 percent of the equity available. The interest rate could be as high as 18 percent and the fees can be exorbitant. They are hoping that you'll blow the money and default -- which allows them to take the property from you.
The US Federal Reserve decided on Tuesday to cut a key interest rate by a half percentage point to 4.75 percent in an effort to calm turmoil in the credit markets and avoid a broader economic downturn.
This was the first cut in the central bank's target for the federal funds rate, the interest rate that commercial banks charge each other for overnight loans, in more than 4 years.
After the Fed's 17 consecutive rate hikes over two years since June 2004, the key short-term interest rate had risen to 5.25 percent from a 46-year low of one percent, where it had stood for one year.
The federal funds rate, which ultimately affects the cost of borrowing money by businesses and consumers through credit card interest rates, commercial loans and more, had been kept steady at 5.25 percent since late June 2006.
Tuesday's decision came as a widening credit crisis has triggered turbulence in global financial markets and increased downside risk to the US economic growth.
The recent credit crunch has stemmed from troubles in the US high-risk subprime mortgage market, which offers loans to people with lower credit and had grown rapidly as sales of both existing and new homes in the country hit records in five years in a row.
However, the once-sizzling US housing market has significantly cooled off since last year, getting into the worst slump in 16 years.
Rising interest rates and falling home prices have made borrowers at the subprime mortgage market, especially those who have taken out adjustable-rate mortgages, increasingly hard to keep up with their monthly payments.
As delinquencies rise, banks are reducing the availability of credit to subprime borrowers and even those with good credit.
"The subprime problem will, in fact become worse," Josh Rosner, managing director at the New York-based institutional research firm Graham Fisher & Co., told Xinhua recently in an interview.
"It is spreading outside of subprime in both the real economy and in financial markets," he said.
Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc., was quoted Monday by The Wall Street Journal as saying that "We should expect further problems in the financial markets from the housing troubles."
Today's trouble "is more serious than 1998, by a significant margin," he said.
A survey of economists published last week by WSJ.com put the risk of a US recession at 36 percent, up from 28 percent a month earlier.
While most economists don't expect recession, they worry that the combined effects of the credit crunch and the housing mess will hold back consumer spending, business investment and corporate profits, which is bad news for stocks.
In the face of the crisis, the European Central Bank stepped back from plans to boost its own key rate at the beginning of September.
On Monday, US Treasury Secretary Henry Paulson said that the current turmoil on financial markets would persist for a while longer but the overall global economy remains healthy.
Economists believe that the credit crisis and the housing slump could affect the overall economy significantly.
Mark Zandi, chief economist at Economy.com., predicts that the US economic growth will slow to around 2.5 percent in the July- to-September period from 4 percent pace in the second quarter.
Growth rate in the fourth quarter is likely to be even weaker at around 1.5 percent, he forecasts.
Rooted in the American dream of homeownership is the notion of transforming your newly purchased home into a better product-your own customized palace. This may be one reason why "Fixer-Uppers" seem to attract and intoxicate many buyers. A fixer-upper may mean a historic home that requires some minor repairs and updates. Or, it could mean a certified dump with no insulation, mildew in the bathrooms, and water problems in the basement. All home buyers (especially inexperienced first-time-buyers) may want to be cautious of fixer-uppers. Indeed, some fixer-uppers can be excellent bargains and wonderful homes, but a careful and thorough investigation of the property and all of the costs, can help you avoid a money pit.
Foreclosures: Let the Buyer Beware
A foreclosure property is a home that has been repossessed by the lender because the owners failed to pay the mortgage. Like fixer-uppers, you may find these are often bargain-priced, but it is wise to be cautious of the legal and monetary risks when considering a foreclosure. Many experts, in fact, advise inexperienced buyers to hire an expert to take them through the process. It is important to have the property thoroughly inspected and to be sure that any liens, undisclosed mortgages, titles and court judgments are cleared. Be a savvy buyer, and use these rules-of-thumb when evaluating a fixer-upper:
· Educate yourself between the too-good-to-be-true home listings and reality.
A home may appear to look wonderful on the outside, but a closer look on the inside may reveal a much different story. Look for fixer-uppers that have relatively inexpensive cosmetic problems, like outdated decor, old carpeting or the need for a fresh coat of paint. Also pay attention to floor plans and layouts.
· Choose a top-notch neighborhood.
Sometimes the neighborhood eyesore can be upgraded, and the neighborhood will help support the value of the fixer-upper and the return on your money.
· Evaluate the surroundings.
Find out if the asking price of the fixer-upper is comparable with the prices of other homes in the neighborhood. Also see if any other nearby homes have been refurbished, and for how much they sold.
· Buy a fixer-upper when the market has bottomed out.
This way, you minimize your risk of overpaying, and it can help to offset the cost of your improvements.
· Estimate up-front exactly how much work will be required to fix your prospective home.
Calculate every dime - purchase costs, maintenance, building materials, labor, financing costs and your valuable time invested--to make sure you've considered everything.
Find a reputable home inspector. A general inspection of the home, from the crawl space to the roof top, should be part of any home purchase. There is always the possibility that the inspector can locate a significant problem which you may not notice . If possible, be present at the time of the inspection to learn first hand about the condition of the home. Read more about home inspections in our Complete Guide to Home Inspections. Try to get the seller to pay for all or part of the home improvement costs. After the home inspection, you may be able to negotiate repairs with the seller by having them reduce the cost instead of making the required repairs. Involve your lender. Keep the lines of communication open with your lender about exactly how much work will be required to fix your potential home and whether it can be done before or after closing. A ggod lender can work with you to find the loan that best accommodates your home financing needs. Inspect the general contractor who will potentially be doing renovation work Make sure general contractors are licensed, insured, financially stable, and not facing numerous consumer complaints. Talk to people who have had experience with the contractor, and view some of the work they have done.
With careful research, you can definitely find promising fixer-uppers out there. Take your time, and align yourself with reputable realtors, lenders, home inspectors and contractors. Most importantly, educate yourself in order to help you make the right decision on the best home purchase for you.
<span id="topmenu"></span><table width="650" height="800" border="0" cellspacing="10" cellpadding="0" align="center" bgcolor="#21631C" background="http://www.eclassifiedads.info/flyer_templates/realtor/scenes/roadway_back.jpg" style="background-color: #21631C;background-image: url(http://www.eclassifiedads.info/flyer_templates/realtor/scenes/roadway_back.jpg);background-repeat: no-repeat"> <tr> <td valign="top" align="center"><h2 style="color:#ffffff;font-family:arial"> Welcome to your own private oasis.</h2> <p align="center" style="padding-top:100px"><img src="http://www.eclassifiedads.info/realtor_uploads/5340/19958827991.jpg"></p> <table width="100%" border="0" cellspacing="0" cellpadding="5"> <tr> <td><img src="http://www.eclassifiedads.info/realtor_uploads/5340/13315517532.jpg"></td> <td><img src="http://www.eclassifiedads.info/realtor_uploads/5340/5.jpg"></td> <td><img src="http://www.eclassifiedads.info/realtor_uploads/5340/21280450071.jpg"></td> </tr></table> <h5 style="color:#c0c0c0;font-family:arial;padding-bottom:0px;margin-bottom:0px"><u>Property Address:</u> 5111 SW 186 Ave, South West Ranches, FL 33332<br /><u>MLS:</u> F833976 | <u>Price:</u> $699000<span id="slideshow"></span><span id="photos"></span><span id="map"></span></h5> <p style="font-family:arial;font-size:12px;padding-top:5px;margin-top:0px"><font color="#B5AF69">Welcome to your own private oasis. Whether lounging in the refreshing swimming pool, grilling on the deck overlooking the lake, reading a book while relaxing in the gazebo, or enjoying the morning paper over coffee in the Florida room, the sights and sounds of the splashing lake waterfall will make you forget about the hectic day that you just experienced.The tree-lined, fenced 1.23 acre property includes a lovely home with an open floor plan,Enjoy the benefits of South florida while living in the country</font></p> <table width="95%" border="0" cellspacing="0" cellpadding="0"> <tr> <td width="50%" valign="top" align="left"> <font color="#B5AF69"> <ul style="padding-top:0px;margin-top:0px;font-family:arial;font-size:12px;color:#B5AF69"> <li class="listtext">54600 S/F lot</li> <li class="listtext">Private Lake With A Waterfall</li> <li class="listtext">Quite Street</li> <li class="listtext">Large Pool</li> <li class="listtext">New Roof</li> <li class="listtext">Graet Neighborhood</li> <li class="listtext">One Of Kind Backyard</li> </ul> </font> </td> <td width="50%" valign="top" align="left"> <font color="#B5AF69"> <ul style="padding-top:0px;margin-top:0px;font-family:arial;font-size:12px;color:#B5AF69"> <li class="listtext">Tropical Paradise</li> <li class="listtext">Easy Access to Highways</li> <li class="listtext">Excellent School District</li> <li class="listtext">Close To Shopping</li> <li class="listtext">20 Minute Drive To The Beach</li> </ul> </font> </td> </tr> </table> </td> </tr></table><table width="650" height="100" border="0" cellspacing="10" cellpadding="0" align="center" style="background-color: #B5AF69"> <tr> <td align="center"><table width="100%" border="0" cellspacing="5" cellpadding="0"> <tr> <td width="33%"><img src="http://www.eclassifiedads.info/images/logos/EWM_Color_Logo.gif"></td> <td width="33%" style="font-family:arial;font-size:12px;color:#ffffff" align="left"> <strong>EWM Realtors</strong><br /> Dave Magua<br /> 2000 Main Street<br> Weston, FL 33326<br> 754-581-5077<br> <a href='http://www.eclassifiedads.info/contact_member.php?flyer_id_send=8307' target='_blank'></a><br> <div id="add_links"></div> </td> <td width="20%"><img src="http://www.eclassifiedads.info/images/logos/8934604571.jpg"></td> </tr> </table></td> </tr></table><table width="650" border="0" cellspacing="0" cellpadding="5" align="center"> <tr> <td> </td> <td><font color="#666666" size="1" face="Verdana"></font></td> </tr> </table></td></tr></table></div><table width="500" border="0" align="center"><tr><td> </td><td> </td><td></td></tr></table><table width="600" border="0" cellpadding="5" align="center"><tr><td align="center"><font color="#666666" size="2" face="Arial, Helvetica, sans-serif">Powered By:</font><br /><img src="http://www.eclassifiedads.info/images/headerlogo.gif" width="200" height="35" border="0"></td></tr></table>
The Federal Reserve has taken significant action in the last few weeks due to the credit crunch. And now they've made an unexpected move by cutting the discount window rate - which is great news. I'll get to that in a minute, but first let's look at recent events and understand what they mean.
Market movement To date, over 120 mortgage companies have closed their doors due to reduced liquidity. The result: Borrowers who want to take out non-conforming loans have fewer, more expensive options.
Many media outlets have incorrectly added fuel to the fire by stating that mortgage lending has stopped altogether and that borrowers can't get a loan without a 20% down-payment. This is not true.
Conforming interest rates and loan programs, those backed by Fannie Mae and Freddie Mac, have not been significantly impacted by recent events. Even better, interest rates have come down from recent highs. While this is good news, the market is experiencing unprecedented volatility and changes could come at any time. Borrowers need to act swiftly and decisively in today's climate.
What did the Fed do? Now back to the discount rate. This is the interest rate charged to commercial banks and other depository institutions on the loans they receive from their regional Federal Reserve Bank's lending facility. The Fed's decision to cut this rate provides stability in the financial markets and this can be good for all of us.
How exactly does this provide stability? Here's an example: Imagine you just wrecked your car and it requires $5,000 worth of repairs. You have a short-term need for cash to pay your mechanic. Even though you know you will eventually be reimbursed by your insurance company, you still need the cash now. So do you sell off stocks to get the cash, or tap into an equity line of credit? Most likely, you draw from that line of credit rather than liquidating a long-term investment.
This is what the banks are facing in today's liquidity crisis. And Bernanke's move helps them avoid long-term damage by supplying access to short-term cash.
It's important to note that the discount rate is different than the Fed Funds Rate, which directly impacts interest rates that you pay for Home Equity Lines of Credit, credit cards, and automobile loans. Most importantly, the discount window rate cut does not directly impact mortgage rates.
What should you do now? Information, knowledge, and expertise are the building blocks of sound financial decision making. You need to work with your clients to help them understand that there are still attractive financing opportunities in today's marketplace - but they might be a little harder to find. Call me and let's discuss how we can give your clients the information they need to make the best decisions.
Just last week, American Home Mortgage, Homebanc and its wholesale counterpart, American Brokers Conduit, became the latest casualties of the credit crisis. Last year, this company closed over $58 billion in home loans. Despite being, by all accounts, a well-run business, market conditions forced them to file for bankruptcy, leaving nearly $800 million in loans unable to close. Tens of thousands of borrowers have now been left without financing as a result of companies like this going under.
Clearly, with over 100 national lenders having now closed shop in the last eight months, this is no longer simply a subprime lending issue. The credit market is experiencing unprecedented turmoil that, according to Mike Perry, CEO of Indymac Bancorp, is "broader and more serious than past disruptions."
What does this mean to the real estate market?
Sellers can no longer be reluctant to accept offers or reduce prices. Tightening credit and diminishing mortgage products will continue to reduce the pool of qualified buyers. This, along with the increase in national inventories, means now is not the time to hold out for the "best" price possible.
Buyers with credit issues or who have difficulty providing required documentation can no longer sit on the fence. If market conditions change, buyers who qualify for a loan today may not qualify a few weeks from now for the same exact loan. Just this week, many lenders have stopped offering no-Doc loans, and some lenders have even pulled back on all forms of stated loans. As market conditions continue to change, a buyer's pre-approval status can disappear even more quickly, delaying or spoiling the deal.
Subprime and Alt-A refi candidates, especially those with ARMs scheduled to reset over the next 12 months, need to act now - even those with a pre-payment penalty. ARMs borrowers struggling with monthly payments now might be shocked to know that monthly payments can double in some cases once an ARM resets.
What does this mean to you as a real estate agent?
Not only is it essential to protect your clients and your transactions, it is your fiduciary responsibility. If you have any ongoing transactions that rely on this type of financing, you must work closely with those involved on both sides. Now is the time to use your expertise. Don't leave your buyers or sellers in the hands of random mortgage providers. Use someone trustworthy
So much depends on how others see you...especially when they're making decisions about your career and credit! For instance, whether you're thinking of making a career move in the near future or in the next few years, you need to pay attention to your online image. After all, potential employers do!
And Google searches aren't the only thing you have to be wary of. Banks and lenders only need to look at your credit score to form an opinion of you. The credit score article below can help you make sure you're taking the RIGHT steps to improve your score.
As always, please forward this issue to friends, family members, or coworkers to help them make favorable impressions with employers and lenders. And please call or e-mail if you need any personal assistance at this time!
THINKING ABOUT A JOB CHANGE? BETTER THINK ABOUT YOUR ONLINE IMAGE...
Many people go online to look for love, friendship and camaraderie, advertising themselves to be found by the interested or like-minded. But be careful...employers are now jumping into the "Googling" game to see what you might have left out of your resume.
CareerBuilder.com recently released some findings that might make you rethink and retool your online image. This popular site for job hunters surveyed hiring managers, and found that 26% of them say they use Internet search engines such as Google or Yahoo to research job applicants. Further, 12% say they use "social networking sites" to do the same. Most interestingly, a whopping 51% percent of the employers who did this type of diligence on job applicants admitted they did not hire the candidates based on what they found!
A potential employer doesn't need--or want--to know that a job applicant likes candlelit dinners and horseback riding at midnight. And while hobbies might provide a creative outlet that helps manage stress, finding out a candidate is the President and founding member of the National Toilet Paper Roll Artists Organization...well, it could cause a hiring manager to wonder if your interests and skills really match the job being interviewed for.
So be picky about what you post! Use pseudonyms if you need to interact with others who collect plastic spoons or engage in dog barking competitions. Don't put anything on a dating site that you wouldn't want your grandmother to read about you.
The Internet has become the online equivalent of that place where "everybody knows your name." All a potential employer or client has to do is "Google You." Depending on what they find, your chances of success could change...and you might never know why.
FAIR ISAAC'S PENDING CREDIT SCORING CHANGE WILL AFFECT MILLIONS...
By Edward Jamison, one of the nation's leading authorities on credit and credit repair. For more information on Edward Jamison and his services, visit http://www.jamisonlawgroup.com/.
I have been forecasting for quite some time that Fair Isaac would eliminate the loophole that allows people to quickly increase their credit score by being added as an authorized user on someone else's established credit card...and sure enough, the time has come.
Marketers Made Loophole Too Prominent to Ignore
For the most part, this loophole has stayed under the radar until recently when a few companies came out of the woodwork with a marketable service that catered to consumers who will benefit from this practice. These companies recruit people from all over the country who have older credit cards with low debt ratios and offer them $100-$300 for each person they add to their credit card as an authorized user. Then, they market to consumers with limited credit histories and/or high revolving debt ratios and offer to have them added as an authorized user on a seasoned trade line for around $1500 per credit card and pocket the difference. As this practice became more popular, it wasn't long before the over exposure of this loophole shed light on the flaws of Fair Isaac's software.
New Software Will Eliminate the Loophole
Under pressure from lenders, Fair Isaac made the decision to invest the money into correcting this loophole. The correction is fairly simple: When Fair Isaac takes that snapshot of somebody's credit file, they are going to look at one extra field that they previously had not looked at when generating the score. That field is the one that says who is responsible for that account. If the scoring software sees that the person is the primary on the account, then it will score the report just like it had done before and no change to the credit score will take place between the old and the new scoring model. This will also hold true if it says that the account is a joint account. But if they see that the responsibility on that account is as an authorized user designation, they will completely ignore that entire account when calculating the credit score. It doesn't matter if the authorized user was added five years ago or yesterday; they will instantly lose the benefits created, if any, from that account being shown on their credit report.
Going Forward
Due to the fact that the scoring model is changing in a few months coupled with the fact that some lenders are even denying applications in some instances if an authorized user account is present, I would advise that people refrain from getting added as an authorized user immediately. The benefit will soon be gone, and taking advantage of that benefit before it leaves may leave a person at risk for having a loan denied by some lenders.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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