Posted by Lily Lam on June 7, 2010 – 2:26 pm
(Source: CNN Money) Financing a home after foreclosure is possible for most homeowners. Those who default on their mortgages due to economic hardships, such as job loss, may receive approval for another mortgage in as little as two years, while it may take more than seven years for strategic defaulters to be approved.
• Lenders utilize several methods in determining whether to grant mortgages, including the amount of money borrowers have saved; employment histories; and payment history.
• According to the chief economist with the Mortgage Bankers Association, lenders may be more willing to finance a mortgage for a borrower who defaulted on their mortgage as a result of factors beyond their control.
• Some homeowners who strategically default—intentionally not meet their mortgage obligations although they have the financial means to do so—assume they can raise their FICO scores by paying their others bills on time. However, most future loan underwriters will scrutinize their records very closely, and if they determine the borrower strategically defaulted on their previous mortgage, the repaired credit score will not overshadow the walkaway.
• Although not impossible for strategic defaulters to finance another home purchase, it likely will be more difficult. Lenders may ask for down payments of 30 percent or more to provide sufficient collateral to enable the bank to recoup most of its money in a foreclosure. These borrowers also may be charged higher interest rates, even above the levels other borrowers with similar credit scores would receive.
Article from: California Association of Realtors
Posted by Lily Lam on May 21, 2010 – 3:22 pm
The Senate on Thursday approved the most extensive overhaul of the banking system since the 1930s.
The legislation must still be reconciled with the House bill passed in December.
Measures in both bills that directly affect property transactions include:
- Limits on the ability of mortgage lenders to penalize borrowers who pay off loans early.
- Stated-income loans would be effectively eliminated.
- Lenders would be required to obtain proof from borrowers that they can pay for their mortgages. Buyers would be required to provide tax returns, payroll receipts, or bank documents.
- Lenders and brokers will be prohibited from pushing borrowers to accept loans with higher interest rates or with risky features.
Source: The New York Times, Gregg Hitt and Damian Paletta (05/20/2010)
Article from: Realtor Magazine
Posted by Lily Lam on May 20, 2010 – 1:31 pm
The California Franchise Tax Board (FTB) recently released an update on the California home buyers’ tax credit alerting borrowers to fax delays it is experiencing. Due to the high volume of faxes, borrowers may experience delays or difficulties in connecting to the fax number during the FTB’s normal business hours. It may take several minutes or possibly up to an hour to connect and transmit the faxed application. All applications for the California home buyers tax credit must be submitted via fax.
More Detail：http://www.ftb.ca.gov/individuals/new_home_credit.shtml
Source：C. A.R. Newsline
Posted by Lily Lam on May 18, 2010 – 12:28 pm
1. Property disclosure form. This form requires you to reveal all known defects to your property. Check with your state government to see if there is a special form required in your state.
2. Purchasers access to premises agreement. This agreement sets conditions for permitting the buyer to enter your home for activities such as measuring for draperies before you move.
3. Sales contract. The agreement between you and the seller on terms and conditions of sale. Again, check with your state real estate department to see if there is a required form.
4. Sales contract contingency clauses. In addition to the contract, you may need to add one or more attachments to the contract to address special contingencies — such as the buyer’s need to sell a home before purchasing yours.
5. Pre- and post-occupancy agreements. Unless you’re planning on moving out and the buyer moving in on the day of closing, you’ll need an agreement on the terms and costs of occupancy once the sale closes.
6. Lead-based paint disclosure pamphlet. If your home was built before 1978, you must provide the pamphlet to all sellers. You must also have buyers sign a statement indicating they received the pamphlet.
Source: Realtor Magazine
Posted by Lily Lam on May 14, 2010 – 1:41 pm
The national mortgage loan delinquency rate — the ratio of borrowers 60 or more days past due — decreased in the first quarter of 2010 after steady increases for 12 consecutive quarters, according to a TransUnion report.
The delinquency rate dropped to 6.77 percent, a level slightly lower than in the fourth quarter of last year. This statistic, which is traditionally seen as a precursor to foreclosure, reflects a decrease of 1.74 percent from the previous quarter’s 6.89 percent average. Year over year, mortgage borrower delinquency is still up approximately 30 percent.
“With prices beginning to rise, increasing consumer confidence and positive trends in the equity markets, home owners who are currently upside down on their mortgages may be less inclined to join the ranks of defaulters, which have been growing in number since the summer of 2008,” FJ Guarrera, vice president in TransUnion’s financial services business unit, said in a statement.
TransUnion culls information quarterly from approximately 27 million anonymous, randomly sampled, individual credit files, representing approximately 10 percent of credit-active U.S. consumers and providing a real-life perspective on how they are managing their credit health.
The company’s forecasting models indicated that mortgage delinquency rates would be leveling off in mid 2010 at both the state and national levels.
Source: TransUnion
Article from: Realtor Magazine
Posted by Lily Lam on May 13, 2010 – 12:34 pm
National vacancy rates for owner-occupied housing decreased 0.1 percentage points in the first quarter of 2010 to 2.6 percent, according to the Dept. of Commerce’s Census Bureau. Meanwhile, vacancy rates nationwide for rental housing increased 0.5 percentage points to 10.6 percent during the same period. The homeownership rate of 67.1 percent was 0.2 percentage points lower than the first quarter 2009 rate of 67.3 percent and 0.1 percentage point lower than the rate last quarter of 67.2 percent, according to the report.
http://www.census.gov/hhes/www/housing/hvs/qtr110/files/q110press.pdf
Source: C.A.R.
Posted by Lily Lam on May 10, 2010 – 2:33 pm
Plenty of things can lower home values in any given neighborhood:
Condition of the houses. Do your neighbors maintain their homes well, or are their lawns overgrown with weeds and their yards full of junk cars and decrepit appliances?
Condition of the streets. Does your city/county/homeowners association maintain your streets well, or are they pocked with potholes? Do they drain well during spring rains? Are they plowed frequently enough in the winter? Are there sidewalks or bike paths?
Crime. How does crime in your neighborhood stack up with rates around the city? Are the police responsive to problems? Do you have a Neighborhood Watch in place, showing that neighbors work together and take crime seriously?
Schools. How are test scores in the schools where your neighborhood’s kids go? (Remember, with constant school redistricting, sometimes the school around the corner is NOT the one where kids in your area go; they may have to go to another school.) Are the schools overcrowded? Are they old and in need of repair or expansion or updating? Are there discipline problems?
Zoning. Will all the neighborhood streets remain quiet, or does the city or county have plans to widen streets to accommodate more traffic– using your neighborhood as a path from one side of town to another? Will that block of decrepit homes nearby be redeveloped into prettynew houses, or will your city put a strip mall or convention center or low-income apartments there?
Source: car.org
Posted by Lily Lam on May 7, 2010 – 12:08 pm
There are three basic stages of foreclosure in California: Pre-foreclosure, trustee’s sale, and repossession, often called an REO or real estate owned by the bank.
Pre-foreclosure homes are in the foreclosure process, but have not yet been auctioned. Owners of pre-foreclosed homes often try to sell the properties because they are “underwater,” meaning they owe more on the mortgage than the home currently is worth. Many homeowners attempt to sell via short sale, where the lender must agree to accept less than the amount owed on the mortgage. Buying at this stage of foreclosure often is a complicated and slow process. However, buyers of pre-foreclosed properties often are given the opportunity to inspect the home prior to purchasing, whereas this is not always the case when buying at other stages of foreclosures.
The second basic stage of foreclosure is the public auction at a trustee’s or foreclosure sale. Homes in this stage often are well priced, but also come with challenges to buy. These homes may not be available for inspection and buyers may later discover the property needs numerous repairs. As a result, many of the homes at auction are purchased by investors and contractors who have experience working with homes needing numerous repairs, or taken back as REO by the foreclosing lenders.
If a home does not sell to a third party at the trustee’s auction, the bank takes the property–the final stage of the foreclosure process. Although homes in this stage typically do not offer buyers the best prices, buyers generally can perform a thorough inspection of the property prior to closing.
Article from: CALIFORNIA ASSOCIATION OF REALTORS(R) News Letter
Posted by Lily Lam on May 6, 2010 – 12:36 pm
The typical U.S. homeowner in a negative equity position will begin to build positive home equity by late 2015 or early 2016, according to a forecast by First American CoreLogic. In some depressed markets, typical borrowers with negative equity may not experience positive equity until 2020 or later, according to the report. Research conducted by First American CoreLogic indicates more than 11.3 million, or 24 percent, of all residential properties with mortgages, had negative equity at the end of the fourth quarter of 2009.
Although house price appreciation will, over time, offset negative equity, in most cases, amortization will be a more significant remedy to negative equity. According to the report, over the next 10 years, the average loan balance will decrease by an annual rate of 3.3 percent, while home price are expected to increase at a three-percent annual rate over the next decade.
Article from: CALIFORNIA ASSOCIATION OF REALTORS(R) news letter