Southern Nevada - with communities of Henderson, Anthem, Summerlin, Green Valley, Silverado Ranch and Mountains Edge - is in the very eye of the tornado when it comes to real estate markets sucked into its furious spin. Home loan foreclosures here are now as commonly talked about as the weather. Many homeowners have given up on trying to hang on to their properties while some are tenaciously seeking solutions to stay on. The latter have several avenues to explore, either directly through their mortgage lenders or then with assistance from a legal counsel.
Now they have a new weapon to deploy. It's called the retro appraisal.
It simply is an appraisal that is based on a past date. It could be three years ago, or five years ago. Normally appraisals are done for the present to be part of a mortgage application, vouching for the collateral's value.
Lawyers representing Las Vegas homeowners in mortgage foreclosure cases, foreclosure mediations and home loan modifications can now rely on these retro appraisals. The basic argument is that lenders were approving loans back in the day using inflated appraisals, largely ignoring any risk management protocols they may have had in place. As the infamous bubble was gathering steam the goal generally was to close mortgage loans as soon as possible for maximum profit and then sell them off to investors. The housing market was piping hot and everybody wanted to make the most of it.
A rather high number, put at 70%, of appraisals for mortgages were plenty overstated between 2005 and 2007, says Retro Appraisals, a firm that has created the back-looking valuation method. "The historical revised real estate appraisal is extremely helpful to a borrower or his or her counsel when seeking to modify a mortgage, defend against a foreclosure or take part in a court-ordered mediation," explains the company's co-founder.
This instrument can be truly effective in the more severely affected housing markets like Las Vegas and much of Arizona, California and Florida. The bubble really galloped out of control in them, artificially pushing up prices that then in many cases became the official appraisals for mortgages. If employed properly, it can be a useful bargaining tool.
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
Mortgage lenders and servicers have generally been going at a snail's pace, or slower, in modifying homeowners' loans. Many applications to do so have been actually declined for a variety of reasons. Some borrowers have just plain given up on the process due to all the hoops they have to jump through and still not get anything meaningful done. And all the well-meaning government programs introduced so far have produced at best mixed results.
A major mortgage provider, Wells Fargo, is doing something different now. It is taking the lead in home loan mods by taking in the so called Pick-A-Pay mortgages, an option ARM product it inherited with the recent Wachovia purchase, from distressed borrowers and replacing them with interest-only paper with due dates possibly as far down the road as 6 to 10 years.
The plan also includes the much sought-after mortgage principal reduction that every home owner who is underwater can appreciate. According to Wells Fargo its modifications to date have resulted in about $2 billion worth of balance cutbacks, averaging roughly $46,000 per loan. From what it looks like is that the bank is offering to reduce the underwater portion by about half. Let's say a home has a loan balance of $400,000 and is now worth only $200,000, Wells Fargo would propose a new interest-only mortgage amount at $300,000.
Las Vegas valley - including Summerlin, Henderson, Southern Highlands, Anthem, Mountains Edge and Green Valley - home owners who are currently on Wells Fargo mortgages could benefit from this. It's predictable that it is mainly targeting the most-ravaged real estate markets where being underwater is very common. Las Vegas certainly qualifies here. This could also inspire other mortgage lenders to come up with similar modification programs.
People are increasingly walking strategically away from their home loans which has obviously influenced Wells Fargo's decision makers. It clearly makes decent sense to give up half of the negative equity than the whole thing when a foreclosure sale is the other option. Every home owner isn't going to buy into this plan because it can still leave them on the hook for years to come. Most-affected Las Vegas residents, for instance, are likely looking at years in double digits before their home values recover to match their mortgage balances, provided the economy here gets back on its feet soon.
The healing of the housing market, in Las Vegas and nationwide, will come. Although it could be painfully slow. Wells Fargo is evidently betting that it is doing that within ten years and it could be right. Everyone would be happy to hoist a cold pint for that.
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
The real estate market has been cruel, to be perfectly honest, to homeowners across the country. Housing values in many cities and regions have dropped so far and fast that it's sometimes hard to keep track of it all. Much less understand how the utter devastation is possible. But that is the cold reality every homeowner is faced with today.
Southern Nevada - with communities like Las Vegas, Summerlin, Henderson, Southern Highlands, Anthem, Green Valley and Mountains Edge - has absorbed some of the most severe blows of them all to its real estate prices. In the same boat are at least Arizona, California and Florida. Industry observers are talking about values often dipping below replacement cost. With that type of erosion comes another grim problem; dragging scores of mortgage borrowers underwater on their homes.
Many Las Vegas homeowners are increasingly thinking of walking away from the obligation. The more they are upside down, or underwater, the more likely it is that they'll do just that. It's hard to consider moral responsibility that much any more when in-the-red numbers are typed in six figures.
What's noteworthy is that the well-off are now more liable to execute a strategic walkaway from a mortgage than others. Experian, the credit firm, and Oliver Wyman, a management consulting shop, have conducted a study on this and it proves the intriguing trend. The reasons of course are many, although the availability of money is not one of them.
Perhaps some of these mortgage borrowers feel that Wall Street operators are largely responsible for the real estate fiasco and their own current troubles and this is payback time. Wall Street banks and investment firms created the subprime home loan products, packaged a multitude of loans into complicated mortgage-backed securities for sale to investors and colluded with bond rating agencies to hype the bonds' potential. Many of them are now surviving on taxpayer largesse, but are still reluctant to help homeowners in distress.
Also, these people probably have the confidence in their ability to recover in a reasonable time frame from any damage to their credit. They often have a decent knowledge base of how credit works. They are fairly secure in their employment even in this down economy and in case a job loss is inevitable have predictably put away a sizable safety fund to draw from for months.
That well-to-do homeowners are more apt to pull off a strategic mortgage default is in some ways unsurprising. In pure monetary terms they usually are underwater the most, like when a $1.2 mil mini mansion in Las Vegas loses 50% of its value, that's $600Ks. That's a bundle.
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
As it frequently happens when I’m at a party, the subject of occupation comes up and when people discover I’m a realtor, the conversation usually gets very personal because people immediately want to know from an insider how they’ve been affected. This weekend was no exception. We were at an excellent Halloween party (no you don’t get pictures of my costume) and the subject of a particular market came up. Although it seemed as if different price ranges were talking, the question was the same: What is my house worth and when will I get my money?
How should someone who is contemplating the value of their home feel?
As always, it depends when one bought, and when they are thinking of selling. If someone bought their home in 2001, they enjoyed six unrealistic and unsustainable years of 10-20% appreciation, while traditional appreciation had been closer to 4-5% per year.
Let’s compare a hypothetical 25% loss of value between 2007 to today with what reality should have been. Yes, I’m using a post bubble lens but bubbles are only real for brief periods, and that’s the best lens we have.
If a $500K house were bought in 2001 and appreciated 12% yearly until 2007 then depreciated 25% from 2007 to today, the house would be worth just over $764K. On the other hand, if that house appreciated a consistent and mere 5% (boy doesn’t that sound good), that house would be worth less than $739K!
Yeah, I know it hurts, and it’s not politically prudent to tell you, but you shouldn’t be complaining. That $45K was monopoly money you get to keep.
If you bought that same house in 2006 for $881K, then things are a bit different for you as it will take you four years (at 4% appreciation) to get back there. The good news for you is that get back there you will, if you don’t need to sell sooner. Many have genuinely suffered over the economic downturn in the past year and a half, but many also are still enjoying the benefit of the crazy price climb.
The financial crisis has been a bitter pill to many people, but we shouldn’t be quick to forget the honey we’re still tasting.
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
When I launched a monthly Las Vegas email mortgage and housing newsletter a few years ago the main challenge was to produce articles with solid content for my past customers and those who had signed up for it. The plan was to have four articles in each issue. To write in the last week of every month four of them just for this purpose seemed like a lot. But around that time I joined ActiveRain and began blogging here and soon enough this great big light bulb goes on in my head. Why not use recent mortgage and real estate posts from AR for this newsletter. The material is fresh and broad and many recipients probably are happy to receive a short collection of the best I have to offer once a month. And voila.
Nowadays the newsletter starts with an update on mortgage interest rates, something that I don't blog about at AR. So three spots are now left for genuine AR posts. Every so often I fiddle with what type of a lineup will be presented for the next several months, so that's how the interest rate roundup sneaked in there. Moreover, each blog gets only the first two paragraphs pasted on the newsletter and then there is a link below that takes the reader to my AR blog for the rest of the material. The idea is to keep the newsletter rather short and to the point.
Since I am a mortgage consultant these blogs in the newsletter cover the home loan market on a national scale, but I also include material on the real estate sector. Being in Las Vegas local housing will certainly get its share of attention. The mortgage topic earns at least one blog, sometimes two, per issue. It depends on what had happened in the last few weeks. Then the others are on the real estate side, one for sure about how Las Vegas housing stats turned out the previous month. This way the presentation is more or less balanced. These blogs are always from the past two or three weeks, so the info is current. That's what clients expect.
Here are examples of the blogs that were included in my past email newsletters:
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
Mortgage loans that were labeled subprime just a few years ago were partly responsible for the notorious real estate bubble. When it burst and let all the air out, the subprime product quickly disappeared from the bloodied scene. Many housing observers warmed up their fingers over keyboards and wrote all these tearful obituaries, believing it would be gone for good. But guess what? It's now back.
This much-criticized mortgage segment has adopted a new backer, however. Subprime used to be pretty much exclusively conventional lenders' territory, until the recent thermonuclear event. With their exit a new player emerged to fill the void, Ginnie Mae, a wholly-owned government corporation created within HUD. Ginnie Mae is another adorable name in the mortgage arena, besides Fannie Mae and Freddie Mac.
Ginnie Mae operates a little differently from its above-mentioned and better-known sister agencies. It guarantees investors timely payment of interest and principal on MBS, or mortgage-backed securities, supported by federally insured loans, meaning FHA, and federally guaranteed loans, in this case VA. The majority of its guarantees go to these two organizations. Ginnie Mae is not in the business of buying or selling loans or issuing MBS.
According to the Federal Reserve Bank of San Francisco, FHA mortgage lending has skyrocketed in the last several months, achieved with the Ginnie Mae's guarantees. In 2006 subprime paper accounted for about 20% of all home loans. Then its market share plunged to near zero and now it is climbing back up again. San Francisco Fed asserts that today mortgage borrowers nationwide with FICO scores under 660 command slightly over 20% of the market. In short, it's back to where it was only three years ago. That raises some eyebrows. And rightfully so.
FHA has flirted with trouble lately as mortgage loan losses are mounting. Sinking property values have a lot to do with this, as are the lenient underwriting guidelines FHA uses, in other words subprime lending, and the generally weak economy. As of right now it looks as if it doesn't need a government bailout, feared by many. If home prices stabilize soon across the board, it'll be safe.
Las Vegas valley - including communities of Mountains Edge, Summerlin, Anthem, Henderson, Southern Highlands, Green Valley and North Las Vegas - has benefited greatly from FHA mortgages. Especially first-time home buyers have been using them and the nice tax credit to provide demand in an otherwise sluggish market. Without FHA the light at the end of the tunnel for Southern Nevada housing market would be just a tiny speck
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
REESTABLISHING YOUR CREDIT TO GET A MORTGAGE LOAN - DALLAS, TEXAS HOMES AND REAL ESTATE
Despite the various reasons why people may find themselves in a financial bind that damages their credit rating, the major obstacle that stops most from rebuilding their credit is lack of knowledge regarding how credit scoring works and what specific steps should be taken to ensure a quicker recovery.
The popular myth is that once a person's credit score is damaged from late payments, collections, a bankruptcy or even a foreclosure, those issues must be resolved or removed from their credit report or they face a seven year curse of bad credit.
It's almost like the old tale about breaking a mirror - once the damage is done, the only thing that can remove the curse is to wait around for the seven years of bad luck to pass.
This myth ends up becoming a self-fufilling prophecy because doing nothing instead of taking proactive steps to rebuild credit will often guarantee a prolonged period of bad credit. And when it comes to qualifying for a mortgage loan, lenders are usually forgiving of past mistakes if a new track record of responsible credit history can be established after the fact. And that is true even in today's new reality of tighter mortgage qualification guidelines.
In many cases, a person who encounters a major setback such as a repossession or bankruptcy may be able to qualify for a mortgage in as little as two years. In other cases of minor credit issues, such as sporatic late payments and/or collections, the wait time to qualify for a mortgage might even be less than a year, depending on the overall situation.
In cases where a home loan applicant has experienced past credit issues, a mortgage lender will typically want to see THREE things before they will consider approving them for a loan:
An explanation and sometimes documentation of the reason for the bad credit and some type of assurance that this resulted from circumstances that are not likely to recur. Some oversimplified examples of this would include a job loss, a divorce or ending of a relationship, an illness or injury, a death in the immediate family or some other type of event that most everyone experiences at some point in life that results in a financial hardship. Even an admission of irresponsibility with regards to past finances may be acceptable, provided the applicant has since demonstrated the ability to manage their finances properly.
A twelve month history of on-time payments on at least three accounts, preferrably accounts that report the payment history to the credit bureaus. This usually also includes a satisfactory rental or mortgage payment history for the last 12 months. This is a MANDITORY MINIMUM REQUIREMENT to obtain most types of mortgages. It is also the one thing that most consumers aren't aware of that keeps them from qualifying for a home loan for a much longer period of time after experiencing a financial setback that adversely affects their credit rating. Many assume that since bad credit lingers on their report for seven years, it may take that long before they can qualify for a mortgage. The secret is knowing how to obtain credit with a bad credit rating.
Proof that the applicant has sufficient resources to afford the monthly mortgage payment and that they will likely be able to pay on time each month. Of course, this is something required of all home loan applicants regardless of past credit history. This boils down to character, capacity and capital, known as the "three C's of underwriting". Character can be summed up to a person's overall credit and payment history, capacity is their ability to repay (income and stability of employment) and capital is both the down payment (equity) and the amount of money they will have left over after closing. Every loan has specific requirements for each of these, and a strength in one area may help to overcome a weakness in another, depending on the overall picture.
So the real question is "How does a person with bad credit go about obtaining credit in the first place?" Well that's actually easier than most people think. Secured loans and secured credit cards are a form of credit that can be obtained by virtually anyone, regardless of past credit history.
What is secured credit? It's basically any type of credit that is secured with collateral (in this case, CASH). Most banks and nearly every credit union offers secured credit cards, but very few actually promote this service.
A secured credit card usually requires a minimum security deposit of $300-$500 dollars, which is held as collateral for repayment of any balance incurred on the card. The credit limit is usually equal to the amount of the deposit. In other words, a fully functional, major credit card that reports to all three credit bureaus can be obtained by nearly anyone by simply putting up a cash deposit in a savings account with a bank or credit union that offers this service.
And in addition to secured credit cards, many of these institutions offer secured installment loans as well.
But why on earth would someone put up a $300 deposit to obtain a credit card with a limit of $300? Doesn't it make more sense to just spend the cash and avoid credit entirely? Well, normally it would. But the purpose of obtaining a secured credit card isn't to actually borrow money, it's to reestablish a solid credit history.
Unfortunately the credit bureaus can only generate a credit score based on data that's reported to them by creditors, not on other factors such as income, employment or a person's ability to save money. And paying bills such as insurance, utilities and rent do not usually help one's credit score since these companies rarely report the payment history to the credit bureaus.
So unless there's something to report, the bad credit from the past is the only thing the credit bureaus have to consider. And that's where people get into a pickle with credit once they've had a setback and have closed all of their past accounts. The secured credit card is the catalyst that helps to actually rebuild the credit score.
Having said all of this about credit repair and restoration, I would not recommend someone buy a home that isn't financially ready for the challenge. Owning a home isn't like renting, it requires a steady supply of time and money to own and maintain a home. There is no maintenance man to call when the toilet overflows at 4AM or the air conditioner stops working in August.
Rebuilding credit is very important, but rebuilding and reestablishing overall financial health, including building up a six to twelve month reserve of cash, should be top priority for anyone who has experienced a financial setback.
IF YOU HAVE HAD A PERSONAL FINANCIAL AND/OR CREDIT SETBACK AND WOULD LIKE MORE INFORMATION ON THE RIGHT STEPS TO TAKE TO REBUILD YOUR CREDIT, PLEASE CALL OR EMAIL ME TO SET UP A CONSULTATION. I WORK WITH A NETWORK OF LENDERS THAT SPECIALIZE IN CONSULTING WITH CREDIT-CHALLENGED CLIENTS THAT NEED SOME FREE GUIDANCE ON WHAT STEPS TO TAKE TO QUALIFY FOR A HOME LOAN AS QUICKLY AS POSSIBLE.
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
Housing prices have been in a free fall in most sectors of the nation for a long while, much longer than any real estate expert had predicted. When mortgage financing is hard to come by and supply far outpaces demand that's usually what will follow. The weak economy is also a major contributor to this. Lately, though, prices have begun to stabilize across the colorful map.
Southern Nevada - Las Vegas, Henderson, Green Valley, Summerlin, Southern Highlands, Pahrump, Mountains Edge and Mesquite among its communities - is a good example of that. The lower end of the marketplace is rather busy here as investors and first-time home buyers do their thing and pick up bargain properties. The statistics are somewhat slanted because of the proportionally high impact of this particular segment. The mid-range and upper end in Las Vegas are still quite soft due to lack of demand, as expected, and difficulties in securing home loan approvals.
In a housing study Goldman Sachs just published it says that home prices have been nationally steered higher by 5% on average on account of government incentives and interventions.The number can be debated until mouths foam, but the fact right now is that Washington is largely making the housing market what it is. Mortgage money is kept affordable by the Fed buying just about everything that has a mortgage bond stamp on it. Then there are all these home loan modification and rescue plans, with eye-catching acronyms, that most consumers are liable to lose track of. But regardless, they at least slow down the supply of homes being foreclosed and dropped on the already saturated marketplace. The first-time home buyer tax credit has given a nice boost to the demand side. And by the way, it looks as if a similar program will come out of Congress in a little bit to replace it.
Las Vegas metropolitan area - as are many other markets throughout - is still grappling with many challenges in the mortgage and real estate arenas. It would be in much worse shape, though, without Uncle Sam's charity and efforts. Eventually it has to stand on its own again, and it will. It's already taking some wobbly steps using crutches toward that goal, but obviously needs more time to fully recover.
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
HOME INSPECTIONS PROTECT HOME BUYERS - THEY ALSO PROTECT SELLERS AND AGENTS!
Probably the single most important step a home buyer can take as a part of the home purchase process is the home inspection. No one can guarantee the condition of a resale home. Therefore, the home buyer should understand that
1. You, a home buyer, cannot rely on the seller for information about the condition of the home they are offering for sale.
2. Buyers can protect themselves with a home inspection.
3. Some states go farther than others in providing protections for home buyers with required seller Property Condition Disclosure, while other states follow the "caveat emptor" rule which requires that the "buyer beware".
PROTECT YOURSELF WITH A HOME INSPECTION
We, as your agent, will do our very best, based on our experience with hundreds of home sold, to make you aware of potential problems with appliances; heating/cooling, interiors, exteriors and things we can see. However, a trained home inspector will not only test the mechanicals and appliances in a house, they will also inspect the structure, materials and condition of the components of a property. Cosmetics are not a part of a home inspection.
A good home inspector will examine the house from top to bottom. Most inspections in Maryland and Virginia will evaluate the physical condition: structure, construction, and mechanical systems. They will identify items that need to be repaired or replaced. They will also give you an estimate of useful life of the roof, appliances, mechanicals and any other equipment included with the home purchase.
You have negotiated all price, terms and conditions of the home purchase and now you want the home inspected. Good. Let's walk through a home inspection. At this point, a successful home inspection should be a contingency, meaning that, if the home inspection reveals serious defects, the home buyer can void the contract and be refunded their earnest money deposit. If the buyer decides to negotiate with the seller for repairs or compensation for defects, that stage requires that the buyer and seller negotiate repairs or agree to void the contract. So, the home inspection is a very important aspect of buying a home. A home warranty is not a substitute for a home inspection. Most home warranty policies do not protect for pre-existing conditions.
WALK THROUGH A TYPICAL HOME INSPECTION
STRUCTURE The home inspector will look for structural integrity, They will evaluate the quality of construction and materials used.
EXTERIOR A thorough inspection of the roof should reveal any past or present leaks. The exterior finishing will be inspected for cracked bricks, loose siding, improper grading and anything else suitable for your purchase.
INTERIOR The interior will be observed for signs of movement. A good home inspector will look for signs of unusual cracking, separating, shifting in the house.
MECHANICALS The heating and air conditioning will be tested, temperature permitting, and since this is an expensive appliance, the inspector may recommend servicing of the unit if it appears that the present owners have neglected this important duty.
APPLIANCES All kitchen appliances will be run through their cycle to make sure that they function properly. The refrigerator will be tested for temperature and seals. The range, microwave, disposer will all be run to make sure they know what to do.
PLUMBING All bathrooms, kitchen, laundry, exterior plumbing will be tested and inspected. This task has become very important since builders have been downgrading building materials for several years to compensate for escalating land costs.
ELECTRICAL All visible wiring, panel boxes, fixtures, switches, outlets will be tested for operating condition and safety. Often we find home owner repairs will be the most hazardous. If the homeowner did not obtain a permit and have work inspected, it may be defective and dangerous. A good home inspector spends a lot of time looking at electrical components of a house.
WHAT HAPPENS AFTER THE HOME INSPECTION?? If the home inspector finds serious problems such as structural defects, you will have to make a decision as to whether or not to go through with the purchase. If the home inspection shows defects that are repairable or replaceable, your agent will write an addendum requesting the repairs to be made by the seller prior to settlement. The seller may agree, refuse or negotiate a cash settlement to compensate you for the defects found.
You and your agent will decide on the best way to handle any defects found. The important thing is that you are an EMPOWERED HOME BUYER when you know the good AND the not so good about a home.
Your Buyer's Agent may recommend local home inspectors or you can find home inspectors trained and certified by the American Society of Home Inspectors, ASHI.com.
Maryland and Northern Virginia Real Estate homes for sale HERE - Search Homes for Sale in Maryland and Northern Virginia.
Contact us to tour homes, 800-711-7988.
For your copy of the Homefinders.com home buyers relocation package, just give me a call. Whether you're moving to Maryland or Northern Virginia from out of the area or just across county. We can help.
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
The home loan and real estate markets we are currently slogging through are unprecedented in their severity. The last time something similar happened was so long ago that few are still here to remember it. As a result millions of people are unable to make their home loan payments and subsequently will have their credit damaged. Three basic events can lead to that.
In short sale the mortgage lender agrees to let the homeowner sell the property for less than the underlying loan balance. Deed in lieu means that the borrower gives the deed, or keys, to the home loan provider before it starts foreclosure action. And then there is the foreclosure itself. All three will slam the homeowner's credit generally up to seven years. By how much depends largely on how many other accounts are in distress.
These guidelines evolved gradually during "normal" housing market conditions. At times when there weren't millions of borrowers in trouble with their mortgage payments. But today things are different. The real estate scene is uniquely clobbered, bringing along with it a historic price adjustment, too. One that was actually badly needed to better reflect a sustainable value structure.
What FICO, the most widely used credit standard, does is use its computer model to predict future borrower behavior, in other words assess risk. FICO score, say, eight years ago was able to lay out a rather representative picture of a mortgage borrower. But from about 2007 onward a totally new class of a credit applicant was introduced to be rated. An unusually large segment of today's homeowners who in some shape have defaulted, or will default, on their mortgage have had a decent to excellent credit rating up until this meltdown. Keeping that in mind, their current FICO score would not be as accurate a predictor employing the standard model. Once the economy improves and most of them will obviously recover financially and become good credit risks once again, they'd still be carrying for years dings to their credit.
Las Vegas valley - with localities like Mountains Edge, Summerlin, Henderson, Southern Highlands, Anthem, North Las Vegas and Green Valley - has its share of homeowners who fall under this category. Real estate upturn here in Southern Nevada - and throughout the nation - will be undeniably delayed because many home loan applicants just can't get approved due to FICO's slow update policy. But there is hope.
The mortgage industry still has those with the spirit of entrepreneurship. Some scattered portfolio lenders are already underwriting mortgages for borrowers with recent foreclosure on their record. They keep the loans in their own books since Fannie Mae and Freddie Mac won't touch them. And it's foreseeable that more will start doing that as they realize what untapped market it is.
Home loans in Southern Nevada - including Las Vegas, Summerlin, Henderson, Green Valley, Mountains Edge, North Las Vegas, Southern Highlands, Anthem, Boulder City, Pahrump and Mesquite - and all of Nevada.
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.
Mortgage lenders and servicers have generally been going at a snail's pace, or slower, in modifying homeowners' loans. Many applications to do so have been actually declined for a variety of reasons. Some borrowers have just plain given up on the process due to all the hoops they have to jump through and still not get anything meaningful done. And all the well-meaning government programs introduced so far have produced at best mixed results.
The real estate market has been cruel, to be perfectly honest, to homeowners across the country. Housing values in many cities and regions have dropped so far and fast that it's sometimes hard to keep track of it all. Much less understand how the utter devastation is possible. But that is the cold reality every homeowner is faced with today.
Mortgage loans that were labeled subprime just a few years ago were partly responsible for the notorious real estate bubble. When it burst and let all the air out, the subprime product quickly disappeared from the bloodied scene. Many housing observers warmed up their fingers over keyboards and wrote all these tearful obituaries, believing it would be gone for good. But guess what? It's now back.
Housing prices have been in a free fall in most sectors of the nation for a long while, much longer than any real estate expert had predicted. When mortgage financing is hard to come by and supply far outpaces demand that's usually what will follow. The weak economy is also a major contributor to this. Lately, though, prices have begun to stabilize across the colorful map.
the home inspection. No one can guarantee the condition of a resale home. Therefore, the home buyer should understand that
The home loan and real estate markets we are currently slogging through are unprecedented in their severity. The last time something similar happened was so long ago that few are still here to remember it. As a result millions of people are unable to make their home loan payments and subsequently will have their credit damaged. Three basic events can lead to that.
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