home loan: FHA struggling with climbing mortgage defaults - 04/05/09 05:49 AM
FHA, or the Federal Housing Administration, almost vanished from the home loan scene a few years ago when conventional mortgage lenders came up with their own attractive loan programs for subprime borrowers. In 2006 FHA's market share was a paltry 2%. Then the real estate market imploded, mauling the mortgage industry in the process into a bloody pulp. As a result banks were reluctant to make home loans unless they had a government insurance against possible defaults and all of a sudden FHA was back in the saddle, becoming for many the favorite go-to-guy. In the fourth quarter of 2008 FHA's … (19 comments)

home loan: Jumbo mortgage making a meaningful comeback - 04/01/09 09:16 AM
The current home loan landscape has been largely very unkind to those who were out to purchase a house using a jumbo vehicle or to homeowners who wanted to refinance an expensive property. In simple terms, when the loan amount goes above the Fannie Mae and Freddie Mac conforming limit it becomes a jumbo because the mandate of the above two agencies bans them from buying these high-priced loans on the secondary market. Generally the limit varies between $417,000, for areas considered general, and goes all the way up to $729,750 for high-cost regions. Las Vegas cut-off point today is $417,000.
… (6 comments)

home loan: New mortgage guidelines coming into focus - 03/16/09 05:12 PM
On the heels of the latest stimulus package, or whatever it was called this time, Fannie Mae and Freddie Mac have provided the home loan industry more details about their new requirements. Some of the guidelines are actually more borrower-friendly than what was initially believed. Eligible homeowners must have a mortgage that is either held by these agencies in their portfolio or is part of a mortgage bond guaranteed by them. The crucial element is that homeowners seeking to refinance through them have to have a solid payment record, for instance no lates during the last 12 months. 
Among the more … (10 comments)

home loan: Mortgage approval hinges on an acceptable appraisal more than ever - 03/14/09 11:43 AM
As if there already weren't enough roadblocks to qualify for a home loan. Most of the past mortgage programs have vanished into thin air in the aftermath of this still percolating real estate meltdown. Besides, down payment requirements have increased, FICO score standards are higher, PMI firms are pulling out of markets and so it goes.
Then there is the all-important appraisal. It's hard to get an accurate one when there are very few, if any, comparables in the immediate neighborhood to use. Homes are just not selling like they once were and this is the most reliable yardstick appraisers have … (6 comments)

home loan: Homeownership again making financial sense over renting - 02/26/09 11:13 AM
The recent real estate boom created quite a few imbalances in several marketplaces. One of them was the owning vs. renting question. When property values kept soaring to new heights, many would-be buyers simply couldn't qualify for a mortgage any more or just didn't want to pay for it even if they had the means. Renting had become so much less damaging to the budget that people chose to do that instead.
The red-hot housing market reached its peak around 2006 when after-tax home loan payments could go as high as 66% more than what rents were then, as was reported … (14 comments)

home loan: Fannie Mae update to boost housing demand - 02/21/09 01:35 PM
That's good news. One of the main barriers to getting the residential real estate market to change direction is the lack of demand. Well, there is some demand, it's true, thanks to very low mortgage interest rates and affordable prices. But they alone won't cut it because the underwriting guidelines remain rather strict and keep many qualified borrowers from getting a home loan. And then there is the poor economy.
But help is on the way. A revised Fannie Mae policy is going to give the demand function a nice shot in the arm. The change involves how many mortgages the … (13 comments)

home loan: Housing market needs more demand - 02/07/09 02:38 PM
It's pretty much basic economics that troubles the current real estate market. Too many homes for sale and not enough buyers approved for a mortgage chasing the inventory. Supply and demand are simply out of sync.
The still increasing weight of foreclosures is a big contributor to this imbalance. That is especially acute in states that have absorbed the heaviest damage from mortgages in default, namely Arizona, California, Florida and Nevada. All in all, it is now a nationwide phenomenon.
There are two distinct reasons to that. Banks, the term includes home loan servicers and investors who own mortgage-backed securities, have … (18 comments)

home loan: Freddie Mac offers more relief for homeowners and tenants in trouble - 01/31/09 11:55 AM
The agency is making life easier for mortgage borrowers and tenants facing foreclosure evictions. It has had its problems lately, including being taken over by the government last year because its portfolio of home loans was collapsing under failing mortgage paper, but is now making pro-active decisions to help out the severely challenged real estate market. They are pitching in. Looks like the new management team understands well what the word responsibility means.
The current eviction order suspension would expire today, January 31, 2009, but now it runs up to the end of February, 2009, as was announced by the agency. … (4 comments)

home loan: Mortgage loan modifications ought to have more bite - 01/22/09 01:22 PM
As foreclosure numbers keep growing nationwide lenders are facing more pressure to make home loan modifications, or workouts, more meaningful. Up to now their efforts have mostly been half measures from the borrower's perspective, backed by recent stats that around half of modified home loans re-default within six months. That surely isn't helping the pummeled real estate market to recover, something everyone ought to strive for, and thus help the entire economy get back on track.   
The entities operating between distressed homeowners and the investors who have bought their underlying mortgages usually are the servicing firms. They are the key … (6 comments)

home loan: FICO score is becoming more consumer accessible - 01/20/09 08:42 AM
This is an improvement credit applicants can cheer about. For instance, when a house is purchased with a mortgage the borrower's credit credentials are pulled and in most cases the company providing it is Fair Isaac Corporation, the home of the well-known FICO score. It's used to get a look at the consumer's past credit history and then evaluate the future risk he may pose. Over the years it has been for most borrowers kind of a mysterious entity they hear a lot about from real estate agents and mortgage consultants but they never really got to understand what all it does. … (4 comments)

home loan: Mortgage cosigner approach worth looking into - 01/15/09 02:32 PM
It could make home buying, or even a refinance, a reality. Mortgage interest rates are bouncing around the low 5% mark that ought to draw consumers to the marketplace by the thousands, and it's doing that to some degree. What still keeps many from getting a loan approved, though, are the stringent underwriting guidelines lenders now employ. Weak credit standing can be a major hurdle to overcome, as is the lack of enough down payment.
The solution could be the use of a cosigner. Normally it would be a relative who is willing to come in and help. His/ her name … (4 comments)

home loan: New ideas needed to energize rough real estate market - 12/13/08 02:52 PM
Whatever Washington has thrown at the ailing housing market so far hasn't had much of an impact. The latest plan was called TARP, the Troubled Asset Recovery Program, that has done very little to stabilize the messy situation. It has cost untold billions to no avail. The key still appears to be to halt foreclosure growth that would then help stabilize prices that in turn would lay down a firm foundation where the housing market can stand on.
One avenue to arrest foreclosures is to work with the investor community that owns mortgage-backed securities. About two-thirds of home loans out there … (18 comments)

home loan: New mortgage fiasco in the making? - 12/05/08 09:10 AM
The financial system has taken it to the chin repeatedly over the last few years thanks to multiple factors, one of which was the subprime home loan product. Many eager borrowers were able to secure funding for a home purchase using its flexible underwriting criteria although many really didn't have the means to keep making payments in the long term. The loans were structured with the idea that the real estate market would continue to expand and if it somehow tanked, well, that probability wasn't considered much at all. And so the bubble burst and the subsequent damage is severe.
As … (12 comments)

home loan: Some home buyers find the real estate market testing - 12/02/08 02:05 PM
First-time home buyers with good credit, say in Las Vegas, are jumping in delight over the vast selection of low-priced residences they can now put offers on. And do even more than that, they can also bargain for seller help in covering mortgage costs and other related stuff. Home loan foreclosures and the glut of inventory have brought down values to levels not seen in years and that has created terrific opportunities.
There is, however, a large segment in the huge housing market that is left holding the short end of the stick on this. That is the homeowner who has … (6 comments)

home loan: IndyMac mortgage loan modification plan could become national standard - 10/23/08 03:30 PM
IndyMac is one of the many hard-luck banks that was deeply involved in subprime mortgages and because of that it was about to go bust a few months ago when FDIC, the Federal Deposit Insurance Corp., swooped in and took control of it. In the following weeks FDIC did more, though, than just guarantee depositors' money. At the urging of its Chairman Sheila Bair the agency and IndyMac formulated an ambitious home loan work-out program and are now testing it.
At the core of the operation is the desire to save the FDIC money on foreclosures now in IndyMac's books. To … (13 comments)

home loan: Mortgage money widely available while other bank activity freezes - 10/21/08 10:47 AM
The media is all over the map describing in sweeping headlines how the American and international financial systems are on life support. Central banks across the globe are pumping all sorts of cash into their respective banking sectors to stay ahead of the advancing wildfire and keep the entire inter-connected financial network from collapsing. It's important news, of course, and has caught consumers from Las Vegas to Washington in this tantalizing development.
There is at least one sector in the U.S. financial system that is presently surprisingly stable, though. It's the mortgage business. True, it does have some issues to deal … (10 comments)

home loan: Mortgage creativity reached too far - 09/16/08 03:36 PM
As the world today watches major, with a capital M, American financial institutions come apart at the seams because they were too carelessly and deeply involved in recently-issued mortgage securities, many experts are already starting to look for reasons to the obvious meltdown. There are many of them but it's hard to put the right weight on each. One of them, for sure, has to be the innovative programs the home loan industry produced over the last decade or so.
Bringing new, creative products to the mortgage marketplace is often invigorating and is normally accepted with open arms by all participants. … (10 comments)

home loan: Fannie Mae and Freddie Mac thoughts - 09/09/08 02:46 PM
For a while it looked like the two main players in the secondary mortgage market just might be able to somehow successfully navigate the rough seas they were caught in the middle of. But it wasn't to be. When large investors, among them many foreign central banks, began unloading bonds issued by Fannie and Freddie because they were fast losing value, the writing was on the wall. That trend seemingly convinced Washington that it was time to act decisively and a rather swift takeover was engineered over the past weekend.
Thus far the effect of the major move has been positive. … (12 comments)

home loan: Mortgage fraud thrives even in this market - 09/01/08 02:48 PM
The real estate market is pretty tough right now in countless areas of the country. There are many reasons to it, one of which is the mortgage industry. Due to severe losses recently lenders have tightened their underwriting standards and flat out cut off many home loan programs that got them in trouble to begin with. They are also increasingly dealing with another concern and that is mortgage fraud.  
Mortgage Asset Research Institute is the main shop around gathering data on mortgage fraud and then putting together periodic reports on it. Its second quarter release shows that there was a … (28 comments)

home loan: Mortgage industry about to attract fresh capital - 08/30/08 03:26 PM
Investors are returning to the residential real estate market and that is a sign of a turnaround in the making. It may not happen tomorrow, but it's coming. There are all sorts of investors who desire to take advantage of the slumping market. In Las Vegas, for instance, they are looking around for single-family houses, condominiums and townhomes to buy and are finding bargains up and down the valley. Some might purchase just one or two of them while others go for a block of attractively-priced property.
These investors certainly are helping in reducing the glut of homes currently available for … (6 comments)