Equity Talks

If you cannot afford your current financial commitments it may be time to get professional help. Below are some guidelines and resources:   The loss of their home's value has caught many people off guard. Even folks with good jobs and modest 80% LTV (loan amount to home value) now find their value may have dropped 20% or more in the last two or three years. As mortgage professionals, we have many resources, but we are not magicians! Fortunately, the same guidelines that lenders apply to mortgage lending (which we must know backwards and forwards) also apply to your new situation, although they are applied differently - you'll see how below. It is extremely and painfully obvious to banks that many homeowners simply would not now qualify for the same loan they now hold. Your mortgage balance represents their interest in your property -- which may now be greater than what the collateral (your home) is worth. So es...

Homeowners who have suffered a Short Sale or Foreclosure are advised to develop a recovery strategy from the day you decide to negotiate your settlement terms with your bank. The fact you have failed on a financial obligation, on the face of it, is an agreement to move forward with you life. Congratulations. Take a deep breath! You may be able to qualify for an FHA home loan as your fastest track back to homeownership sooner than later. FHA currently has no minimum credit score, although most lenders do have their own underwriting overlays on what they will accept. 620 FICO is the starting point for most. What about timing? The clock starts ticking in your favor the day your home title is transferred to a new owner. NOT unfortunately, the date your foreclosure is registered. Since Short Sales keep you on title throughout the process, you could be putting off home ownership however long it takes to settle your sale. If you were able to keep making your payments or miraculo...

Should this home be 'saved'? I read a wake up article today by a mortgage market advisor  Mark Hanson , who suggested that unless foreclosures double from the April 2010 record, the 'shadow inventory' of homes on the market --it will take at least 8-10 years to clear the sales backlog of homes for sale. Wow. Which suggests, by deduction, that our national housing markets will be affected by these lower priced distressed homes lagging if not languishing on the market beside new and non distressed homes, affecting their values for years. OK so that's the downside. But for every dark cloud there is a silver lining...right? What is the real effect of foreclosures in your local market? Are people who don't need to sell helping stabilize their local economies by staying put regardless of their paper 'losses' in value? Mr. Hanson goes on to suggest:  "Massive-scale home retention (mortgage mod) programs have truly helped only a small slice but primari...

Principal Writedowns + Help for Unemployed Homeowners: HAMP and Making Home Affordable Guidelines updated today are sounding pretty progressive: The much touted PR on Principal Write downs is being implemented by the first subscribers to this. If the idea of lowering your loan balance has any goodguy points be aware that citizens will be paying for this via more bailout funds or taxes. Supporting the collective good is after all what our democracy stands for. Which Banks?  Unfortunately, the major banks still standing have inherited many bad loans: Pay Option ARMS, and assorted Sub Prime loans i.e., loans famous for exploding one's principal balance or rate and payment when they adjust. Many of these loans were sold to people who simply did not understand ther terms or qualify for the full principal and interest payments. To the embarassment of some brokers and banks, these loans financed a rash of predictable defaults. So what is a lender holding so many bad loans to...

local impostors are claiming to be appraisers to gain entry to distressed homes We have heard from distressed homeowners who, after having the Notice of Default letters taped to their door, (pre-foreclosure) had unannounced individuals arriving at their door with cameras claiming to be the appraiser sent by 'their bank'. T hese people are imposters. They are getting names off the county bulletin boards of homes in arrears pending foreclosure proceedings. It is apparent some foreclosure buyers use this tactic to gain entry and qualify homes prior to auction. One homeowner just called to say a person arrived with a camera, without a business card, asking for information (she didn't give out) about her loan, her property, etc. They didn't know the name of the Bank or Trustee and asked how much was owed and other private information. She had the presence of mind to tell them to leave and call her trustee. Unfortunately a skilled impostor would ...

Making Home Affordable 105% Loans were introduced just this spring and the program has simply not been meeting the public need. Homeowners seeking to refinance their Fannie Mae or Freddie Mac Mortgages quickly found that the new 105% loans were helping a minority of people teetering on the edge of collapse. While it may seem obvious to people in trouble, here is why the limit was increased to 125% last week. Many homeowners simply cannot meet the required 33% debt to income limits necessary to refinance their loans due primarily to a job loss or cutback or other change in their financial situation. You see, many people purchased or refinanced their homes with much higher housing ratios: in many cases over 45%. So unless your income went up, the chances of a lower ratio will be slim even with a fixed interest rate. A careful look at the rates on the much touted 'DU Refinance' Programs our lenders are offering are just not so hot. Given you have to be in 'financial dist...

Loan Modification and Stimulus  Programs are the hot buzz words for distressed homeowners. But exactly what are they and who qualifies for help? Mortgage loan modification as a means to help folks in financial distress has always been an option --just not widely known. The basic premise is to renegotiate the terms of your existing loan contract with your mortgage holder. Generally, modifications are considered if your financial circumstances have changed, or you simply cannot afford the new adjustable rate reset. Most lenders want a hardship letter that holds water. (Not a good idea to complain that your stated income loan was a sham!) The key word is 'negotiation'. Few of us have the understanding of win win in a delicate balancing act with that creature we fondly refer to as 'The Bank'. Those friendly folks who loaned you money to buy or refinance just a few years ago, have built a very effective and impenetrable wall built of endless automated phone systems and...