"This letter might be the most important piece of mail many of these families will receive all year," said HUD Secretary Steve Preston. "This information could not only help save their current home, it could help provide them with long term financial security. This outreach campaign will ensure families are aware of the safe mortgage alternative offered by FHA."
Letters are being sent to homeowners who have already faced or are experiencing the first reset of their adjustable rate mortgages. Through the end of the year, FHA can insure home loans valued between $271,050 and $729,750. Normally these loan limits are set between $200,160 and $362,790 but were expanded through President Bush's Economic Stimulus Package. Bipartisan FHA Modernization legislation awaiting final action by the Senate and House of Representatives would permanently increase the loan limits to an acceptable level.
FHA-insured loans are backed by the full faith and credit of the government, which typically allows lenders to offer mortgage products at a lower, more affordable interest rate. More than 90 percent of FHA-backed mortgages are 30-year, fixed rate products. FHA also provides a one-of-a-kind loss mitigation program that helps protect borrowers against foreclosure. Finally, FHASecure, which allows borrowers who are current and delinquent on their loans to refinance with the FHA, is saving tens of thousands of families on average $400 a month compared to their exotic subprime loans.
Below is a copy of the letter being sent to homeowners.
-----
Dear Homeowner,
Do you need help with your mortgage?
Your area is experiencing a disturbing home foreclosure rate that has accelerated in recent months. News reports cite the damaging effects of "sub prime loans" as a major factor in the unsettled market. By focusing on education and safe mortgage alternatives, though, the Federal Housing Administration (FHA) of the United States Department of Housing and Urban Development (HUD) is working diligently to address this unacceptable foreclosure trend.
Over the past few months, FHA has worked with mortgage loan servicers to identify solutions for the crisis facing current homeowners. Your current mortgage does not have to be FHA insured for you to benefit from our help. If you are facing financial difficulties due to a recent or imminent mortgage reset, or other housing-related difficulty, I urge you to contact us at 1 (800) CALL-FHA or to visit www.fha.gov. There you will have the opportunity to learn about foreclosure prevention, legal rights, and credit counseling, among other topics.
Many homeowners may also be able to take advantage of our recently announced FHASecure program. This new program allows eligible homeowners to refinance into a secure, fixed-rate FHA loan even if they are in default.
Additionally, a new partnership between mortgage companies and non-profit housing counselors called HOPE NOW is available to you. Their mission is simple: reach out to homeowners who may be having difficulty paying their mortgages. For more information or to see if your mortgage company is a member of this caring coalition please go to www.hopenow.com.
Again, please contact us at 1 (800) CALL-FHA (800-225-5342) or go to www.fha.gov. As part of the federal government, the Federal Housing Administration wants to help you protect and preserve the American dream - your home.
Sincerely,
Brian D. MontgomeryAssistant Secretary for HousingFederal Housing Commissioner
Tags: FHASecure, distressed homeowners, mortgage default, foreclosure, subprime loans, mortgage companies, FHA, Hope Now, conomic Stimulus Package, insured loans
Ed McMahon, Johnny Carson’s sidekick on “The Tonight Show” for three decades, may lose his home to foreclosure. Ed’s home has been for sale for two years.
A default notice for $643,596 was filed against the 85-year- old McMahon by ReconTrust Co., a unit of Countrywide Financial Corp., the biggest U.S. home lender. The default involves a $4.8 million mortgage issued by Calabasas, California-based Countrywide, according to property-record data collected by Discovery Bay, California-based ForeclosureRadar.
McMahon’s 7,013-square-foot (652-square-meter) home went up for sale at about $7 million in mid-2006. The price was later dropped to $5.75 million and then, two months ago, increased to $6.25 million. The boost was needed to pay what McMahon owes on the house. That sounds like a great idea …. RAISE the price on a home that isn’t selling!
The default notice was filed on March 3, according to ForeclosureRadar. Its filing was reported earlier today by the Wall Street Journal.
McMahon was the “Tonight Show” sidekick from 1962 until Carson retired in 1992, supplying both the drawn-out “Heeeere’s Johnny!” introduction and constant laughter at the host’s gags. McMahon also hosted the syndicated talent show “Star Search” and was a pitchman for the American Family Publishers sweepstakes.
McMahon isn’t the only celebrity with mortgage problems. Former baseball star Jose Canseco, who last played in the major leagues in 2001 and wrote a 2005 book revealing steroid use in the sport, also is losing his Los Angeles home to foreclosure, television show Inside Edition reported last month.
“It’s happening to anyone and everyone,” said Canseco.
I help people who are facing foreclosure. I can sometimes help them to stay in their homes. Most often, I help them avoid foreclosure by negotiating with their lenders to take less than the amount they owe as full satisfaction of their mortgage debt. Call me at 404-384-2274 to discuss your situation.
Tags: Ed McMahon, Jose Canseco, foreclosure, pre-foreclosure, short sale, mortgage, full satisfaction, loss mitigation, mortgage problems
Fannie Mae recently modified its guidelines regarding its "Soft Market" policy . This policy required borrowers to increase their down payments if the appraisal report suggested that the property is in a "declining market." In the press release below, Fannie Mae announced a new, consumer-friendly policy.
News Release
May 16, 2008
Fannie Mae Announces Single National Down Payment Policy;
Replaces Policy Regarding Markets Where Home Prices are Declining
WASHINGTON, DC -- Fannie Mae (FNM/NYSE) today announced a new, national policy on down payment requirements for conventional, conforming mortgages the company will purchase or guarantee. Starting June 1, 2008, Fannie Mae will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its Desktop Underwriter® (DU®) automated underwriting system, and 95 percent loan-to-value ratios for loans underwritten outside of DU, in all geographic locations in the United States. The new national down payment policy will supersede the policy the company adopted in December 2007 that required higher down payments in markets where home prices are declining.
"As another part of our 'Keys to RecoveryTM' initiative, we are today announcing that we will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions," Marianne Sullivan, Senior Vice President, Single-Family Credit Policy and Risk Management, said. "This new down payment policy reinforces our goal to support successful home-owning, not just home-buying, as we seek to bring liquidity to all communities and help the housing market recover."
The new national down payment requirements of 3 or 5 percent will apply to loans for purchase of single-family, primary residences. Down payment requirements will vary for other occupancy, property and transaction types. The company will implement systems and operational changes over the summer to accommodate the new national policy.
"We are able to adopt this new, national down payment requirement, even in markets where home prices are declining, because our new automated underwriting risk assessment model DU Version 7.0 will limit risk layering and assess each loan more precisely," Sullivan added. "At the same time, we believe that equity matters, especially in this market. Down payments are a critical success factor in homeownership -- and responsible lending is good business."
Since the housing correction began, Fannie Mae has expanded its mortgage guaranty business to serve the market's urgent need for stability, liquidity and affordability. The company also undertook steps to help protect borrowers, manage the increased credit risk in the market, and fortify the company's capital position. Among these steps, the company has continued to assess and establish new pricing, eligibility and underwriting criteria for its business that more accurately reflect the current risks in the housing market and guard against the potential for foreclosure. These changes have been incorporated into DU and have included adjustments to credit risk assessment, loan-to-value ratios and down payment requirements, among other factors.
Among the changes in response to market conditions, in December 2007 Fannie Mae adopted a "Maximum Financing in Declining Markets Policy" that restricted the loan-to-value ratios on properties in markets where home prices are declining, essentially requiring higher down payments in these markets. The new single national down payment policy announced today will supersede that policy.
Fannie Mae Senior Vice President Jeff Hayward stressed the company's commitment to special affordable lending programs to support homeownership for families of modest means. "We are stepping up to provide more liquidity and affordability to some of the most distressed communities while also seeking at least a 3 percent down payment investment through our Desktop Underwriter system from borrowers to help ensure their success."
Fannie Mae will continue to provide support for homebuyers that need down payment assistance, and will continue to allow loans with Community Seconds® up to a maximum 105 percent combined loan-to-value ratio. Community Seconds allow a borrower to obtain a second-lien mortgage to help cover down payment and closing costs, with funding typically provided by a state or local housing agency; an employer; or a nonprofit organization. Fannie Mae also offers MyCommunityMortgage® and Flex mortgage products, which permit down payment assistance programs in the form of gifts and grants.
"We recognize that down payment assistance programs remain a viable tool for borrowers who can afford a mortgage long term, but might need a little help getting started," Sullivan said.
As part of its "Keys to Recovery" initiative, Fannie Mae is expanding its partnership with the National Council of State Housing Agencies. The company will provide up to $10 billion in financing to help Housing Finance Authorities (HFA) serve first-time homebuyers of modest means. In some cases, Fannie Mae will purchase HFA mortgages that have greater than 97 percent loan-to-value ratios.
The first "Keys to Recovery" initiative that Fannie Mae announced on May 6, 2008 also includes: streamlined refinancing for Fannie Mae borrowers whose mortgage balances exceed the value of their homes; improved pricing for jumbo-conforming mortgages to help borrowers in high-cost areas; and a neighborhood stabilization initiative with the Center for Community Self-Help for targeted areas with high home foreclosures.
Here Comes the Bride
Here Comes the House
FHA endorses a Bridal Registry Initiative which allows couples to amass monetary gifts from friends and family specifically for the purpose of using these funds toward a down payment for a home.
Can be utilized for other "gift appropriate" situations
Lender must document funds
Couple establishes a bridal registry account for this purpose with lender and bank
Funds may be deposited directly by friends and family into this account
Checks can be signed over to the lender, with the lender depositing the money into the bridal registry account
Couples / donors may receive deposit coupons to mail money directly to the bank
Lenders can provide information for distribution to the friends and family of the bridal couple (i.e., letters, brochures)
Lenders can provide gift cards to bridal couple. These gift cards would reflect the gift-giver’s name and relationship to couple for the purpose of documenting the gift.
FHA Gift Program Guidelines--FHA allows the buyer to receive any or all of the down payment as a gift. However, there are very specific guidelines set forth that the to follow when the borrower is receiving such a gift.
The Lender has to:
Document their bank accounts prior to receipt of the gift
Have the donor fill out the gift letter form
Obtain an asset account statement from the donor for the purpose of demonstrating that they have the ability to give the gift. (Guidelines dictate that the donor may not borrow the money).
Document the transfer of funds from donor to borrower--not with a personal check.
There are a few ways to handle this transfer.
Wire from donor's account to borrower's account and obtaining confirmation of the wire
Wire from donor's account to title company's account
Cashier's check or certified funds from donor (showing them as remitter on check), and made out to borrower.
Tags: FHA, Bridal Registry Initiative, down payment program, gift program, donating the down payment, downpayment, gifts to newlyweds, FHA Gift Program, bridal registry account
SPRING MAINTENANCE TIPS:Outside the House - Up High Inspect the roof for damaged, loose or blistered shingles. Caulk/seal nail holes in the roof. Replace damaged shingles if they're on less than 20% of the roof. Reroof if damaged shingles cover more than 20% of the roof. Examine flashing around chimneys, vents, and roof edges. Remove debris from gutters and downspouts and patch any holes. Make sure the downspouts direct water at least five feet away from your foundation. Examine fascia or soffit boards. Replace these if they are soft or rotting because they may allow rain into your attic. Trim branches and shrubs that are touching your home so that they are 6 inches or more away from the structure. These branches can provide a pathway for bugs or excess moisture to enter. Remove dead branches that may fall on your home. Snap! Outside The House - Down Low Remove fallen limbs, branches and other debris around the home to discourage wood-eating insects. Termites = VERY BAD ! Clean out basement window wells. Inspect/replace caulk and seal windows, doors, and other penetrations, such as dryer vents and cable wire holes. Inspect and repair caulking where two different materials meet, for example, where wood siding joins the foundation's wall or at inside corners. Touch up any exterior surfaces that need paint before they deteriorate further. Inspect bricks and concrete blocks for cracked mortar or loose joints. Inspect grading around the house to be sure water drains away from the foundation on all sides. Make sure that your lawn sprinkler heads do not spray the walls of the house. Water entering home = VERY BAD ! Check your inside and outside foundation walls and piers for termite tubes and damaged wood. Information courtesy of PATH. For more information and resources, go to www.pathnet.org Tags: Spring Maintenance Tips, termites, water entering home, maintaining home value, home maintenance, grading, foundation, inspection, flashing, soffit, fascia, roof care
Inspect the roof for damaged, loose or blistered shingles. Caulk/seal nail holes in the roof.
Replace damaged shingles if they're on less than 20% of the roof.
Reroof if damaged shingles cover more than 20% of the roof.
Examine flashing around chimneys, vents, and roof edges.
Remove debris from gutters and downspouts and patch any holes.
Make sure the downspouts direct water at least five feet away from your foundation.
Examine fascia or soffit boards. Replace these if they are soft or rotting because they may allow rain into your attic.
Trim branches and shrubs that are touching your home so that they are 6 inches or more away from the structure. These branches can provide a pathway for bugs or excess moisture to enter.
Remove dead branches that may fall on your home. Snap!
Outside The House - Down Low
Information courtesy of PATH. For more information and resources, go to www.pathnet.org
Tags: Spring Maintenance Tips, termites, water entering home, maintaining home value, home maintenance, grading, foundation, inspection, flashing, soffit, fascia, roof care
Answer: Sometimes when the Fed cuts short term interest rates, mortgage rates fall too. In most cases, mortgage rates don't also fall. Here's why.
Find your loan documents and read along.
30 Year Fixed Rate Mortgages
Consider 30-year fixed rate mortgages. The 30-year fixed rate mortgage is not tied to short-term treasuries. Fixed mortgage rates are tied to long-term bond yields. These rates change based on the outlook for the economy and inflation. True, even as the Fed has lowered rates, the 30-year fixed has come down, but that’s because of the outlook for slower economic growth in the months ahead. While the decline in treasury yields has helped push mortgage rates lower, the decline in long term rates has not changed in the same ways and has not changed in the same time frames. That's because these mortgages are packaged, securitized, and sold globally. The investors buying these "mortgage securities" now demand a higher risk premium on these mortgages because more borrowers are paying late and there are more foreclosures.
7 & 5-1 Adjustable Rate Mortgages
Consider 7 and 5-1 Adjustable Rate Mortgages (ARMs). Yes, this is good news if your 5-year (or 7 year) ARM is pegged to a treasury index. For example, if you’re facing an ARM reset on, say, a $200,000 loan, you’re now getting a payment increase of about $150 a month, compared to $370 a month, which you would have had before the Fed started cutting rates - a savings to you of $220 per month on the same loan.
Do the Fed Rate Drops Help Sub-Prime Mortgage Holders?
No. Unfortunately, if you have a sub-prime ARM, it is more than likely pegged to the London Inter Bank Offered Rate (LIBOR), the most famous barometer for short-term interest rates in the world. The LIBOR rate has moved in the opposite direction. Because of the liquidity issues in global financial markets, LIBOR rates have actually increased at the same time that treasury and other benchmark yields have declined. That means that Fed moves that lower rates today would not help too many sub-prime mortgage holders.
How are rates for Home Equity Lines of Credit Affected?How about my Home Equity Line of Credit (HELOC)?: Yes, if you have a home equity line of credit that you used to renovate your bathroom/kitchen recently, then when the Fed lowers rates, your rate comes down too. That’s because HELOCs are predominantly pegged to the prime rate, which moves in step with the Federal Reserve.
Tags: Fed Funds rate, LIBOR, London Inter Bank Offered Rate, 30 year fixed rate mortgage, adjustable rate mortgage, ARM, home equity line of credit, HELOC, economic growth, liquidity, mortgage securities, 30-year fixed rate, short term treasuries, long term treasuries, mortgage rates, ARM reset, bond yields
Houses need regular maintenance. For example, they need air filters changed pretty regularly. Painting, pressure washing, and caulking are all maintenance items to address. There are scores of other things as well. Not only that, but one of the most efficient ways to care for a house is to take care of anything that pops up and to take care of it quickly and properly. When things are undone or poorly done, the greater the consequences. Foreclosures and bank owned properties are typically maintained least. When people can't afford their house payment, they generally aren't spending time and money painting or fixing a broken window. To learn more about how to maintain the essential systems in your home, see the excellent book - "How To Operate Your Home", Tom Feiza, Mr. Fix-It Press, 2000, ISBN-096747591-0, $24.95.
When resale time comes around, things can be a little more complicated. Sellers start looking at the payback for the money spent. In some cases, they think that there should be an increase in value for every dollar they spend. Sadly, that isn't always the case, and maintenance is one of these. The flip side is that failure to perform maintenance can detract from the home's value ... and cost money. There is a significant difference between increase and decrease in value (seems obvious enough), but many fail to realize the difference. To see a quick comparison of dollars spent to dollars returned, see these reports:
Cost Versus Value Report - 2007 National Report
Atlanta Report Atlanta Specific Report
When we discuss a property's value, we expect that the property is reasonably maintained. If there are obvious deficiencies, or the property is visibly rundown, even though they may be little things, they will affect the value. That means a reduction in the home's resale value. If you deal with major issues that were previously factored in to the value, it may raise your home's value. Don't expect that the roof you replaced last month for $15,000 will add $15,000 to your home's value. It may, however, help you sell your home faster, because it's more attractive and the buyer has just "avoided" having the hassle and expense of replacing the roof.
If you are a seller, you need to realize not maintaining or fixing issues in advance of putting your home on the market costs you TWICE. Buyers
- reduce their offers due to the condition, because they figure they will have to fix it themselves, and,
- require that the seller repair the items as part of the stipulations for their offer.
Finally, buyers notice maintenance and the lack of it! If a house looks great, but the buyer finds details that have not been maintained, the buyer will wonder what other hidden issues there might be. This is similar to shopping for a new car and finding a dent or ding (once you find one you'll be looking for more). Likewise, if a house appears to have an unusual amount of recent maintenance, a buyer will wonder if there are underlying problems that the seller is trying to hide. Once a buyer loses confidence that the home is a good value, they won't make an offer. Reason: Nobody wants to buy trouble.
Sellers: Pay attention to your home maintenance and do it when needed. That way, your home will sell faster, with fewer issues, with less frustration, and usually for more money.
Tags: home maintenance, Cost Vs Value Report, foreclosures, bank owned properties, property value, resale value, How To Operate Your Home
#10: I can’t make my house payments, but I do have an ability to pay back all or part of the negative equity. If I want to preserve my credit score, is a short sale right for me?
Answer: Probably, not. In cases where the seller can pay back all or part of the negative equity (usually to the 2nd lien holder), it makes sense for them to work out a repayment plan. The lender will then release the lien and allow the home to close.
#9: If I pay mortgage insurance and default on my loan, why wouldn’t my mortgage insurance cover the deficiency amount?Answer: Mortgage insurance protects the lender against loss when a borrower defaults on a loan. Mortgage insurance does not protect you, the borrower, at all.
#8: Do I have to have my home ‘Approved’ by the lender prior to offering it for sale as a short sale?Answer: No. Technically speaking there is no such thing as being ‘Short Sale Approved’. The actual approval only happens when the lender accepts a short sales offer from a buyer.
#7: I just missed a payment and I expect I will miss more, how long does the foreclosure process take? Is there time to do a short sale?Answer: The time required to complete the foreclosure process differs by state. For example, in the Midwest, a foreclosure can take over a year. By contrast, a California foreclosure may take more than 6 months. In general, a well priced short sale being processed by an educated short sale listing agent will sell and close in less than 120 days. Due to the time frame required to complete a short sale, the sooner you contact a real estate agent qualified to do a short sale, the higher the likelihood that you will avoid foreclosure.
#6: Will I still have to pay property taxes if I do a short sale?Answer: Property taxes will always have to be paid as part of any accepted short sale. Whether it’s you or the lender depends on their policies and the specific agreement you reach while negotiating the short sale.
#5: I owe more than my home is worth and I can’t make the payment. Do I have to somehow qualify for a short sale?Answer: The simple answer is NO. If a borrower can’t make the payments and is otherwise insolvent, the borrower qualifies for a short sale. Note: insolvent simply means their total debts are greater than their assets.
#4: Will I have to pay income taxes on the debt forgiven by the lender? I have heard that I will get a 1099 from the lender. Will the loss the lender takes be treated as a taxable gain to me, the seller?Answer: It WAS true. Now it is not. Consult your own Tax Attorney or Qualified CPA. Very recently the tax law was modified and now most people who do a short sale will not have any tax liability.
#3: How does my listing agent get paid? Who pays the agent's commission?Answer: The lender pays the agent's commission along with all the other usual closing costs. Lenders require that the borrower use a real estate agent to list the home as a condition of the short sale. The lender wants validation that a real estate professional is actively engaged in marketing the property. Attempting to sell your property as a For Sale By Owner is not sufficient.
#2: Do I have to miss a payment to do a Short Sale?Answer: No. Late last year most major lenders started accepting short sale offers from sellers who have never missed a payment.
#1: I want to do a short sale, but I have a 2nd mortgage. Does this make me ineligible for a short sale?Answer: No. Both of your lenders will need to be satisfied in some way to complete the short sale. If your first lender will be paid off by the sale, then you just negotiate the terms with the second lender. Most short sales do involve both the 1st and 2nd lien holders.
Tags: short sale, foreclosure, For Sale By Owner, forgiven debt, 1099, IRS, time for foreclosure, foreclosure process, negative equity, deficiency amount, 1st lien, 2nd lien, borrower default, 2nd mortgage, property tax, commission, notice of default, mortgage insurance
Potential Buyers AND Sellers
The FHA loan limit is now higher for metro Atlanta! The single family loan limit for metro Atlanta is now $346,250.
Here are some reasons FHA financing may be right for you:
If you are outside of the metro Atlanta area, visit the website below to verify the loan limit for your county.
Go to:
https://entp.hud.gov/idapp/fhagov/hicostlook.cfm.
* Mortgage Insurance (MI) companies are now requiring conventional loan limits to be reduced by 5% or more in cases where the appraiser determines that the property is in a declining market. For example, suppose you have been approved for 100% financing on a conventional loan. If the appraiser reports any one of the following:
you may be required to put down 5% in order to meet the LTV limit reduction requirement.
Tags: FHA, Loan Limit, Mortgage Insurance, no money down, LTV, interest rates, declining market policy, conventional loan, appraiser, Nehemiah, credit score
Waiting For Mortgage Rates To Go Lower? Oops!
Freddie Mac reported in its Primary Mortgage Market Survey (PMMS) that 30-year fixed-rate mortgage (FRM) averaged 6.24 percent with an average 0.5 point for the week ending February 28, 2008, up from the previous week when it averaged 6.04 percent. Last year at this time, the 30-year FRM averaged 6.18 percent.
The 15-year fixed rate mortgage averaged 5.72 percent with an average 0.5 point, up from the previous week when it averaged 5.64 percent. A year ago at this time, the 15-year fixed rate mortgage averaged 5.92 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs)averaged 5.43 percent, with an average 0.4 point, up from the previous week when it averaged 5.37 percent. A year ago, the 5-year ARM averaged 5.93 percent.
One-year Treasury-indexed ARMs averaged 5.11 percent with an average 0.7 point, up from the previous week when it was 4.98 percent. A year ago at this time, the 1-year ARM averaged 5.49 percent
"Long-term fixed mortgage rates trended up for a third week, bringing rates on 30-year and 15-year fixed-rate mortgages backto their levels of last November," said Frank Nothaft, Freddie Mac vice president and chief economist. "Refinancing activities, which had surged to a 12-month high in January, according to Freddie Mac's monthly refi share report, are likely to ebb following this recent rise in rates."
How Much Does A Half Point Rise In Rates Cost Me?
Take a look at the numbers.
You want to buy a home worth $375,000. You have 20% downpayment ($75,000) and you want to finance the balance (80%). You have chosen a 30 Year Fixed rate Mortgage. The table below shows the effect on the monthly payment at various interest rates.
Interest
Rate
$ per $1000 of Loan Amount per month
Principal &
Interest Monthly(*)
Increase in
Monthly Payment
Increase Over Life
Of The Loan
* Only Monthly Principal &Interest are quoted since Private Mortgage Insurance and Taxes depend on the amount financed and on locality. These figures are for illustration purposes only. Check with your mortgage lender for their specific fees and expenses that may affect your situation.
Punchline
If you have been on the sidelines waiting for mortgage rates to fall and home prices to fall, you may have missed it.
Call me now (404-384-2274) to discuss what housing opportunities are available to you.
Tags: Freddie Mac, Mortgage Rates, ARM, fixed rate mortgages, adjustable rate mortgages, rising mortgage rates,defaults, foreclosures, buying homes, affordability, calling the bottom.
Most major lenders are freezing withdrawals from Home Equity Lines of Credit (HELOCs) – and I don’t want you to be caught off guard by this development. If you were planning on using your HELOC for spring home improvements or college tuition, chances are the money has been – or will be – shut off.
You should be aware that the lender retains the right to suspend or reduce the line of credit available if your property value falls below the appraised value used to originate the loan. Lenders are actively assessing properties and then suspending access for account holders who have seen a downward slide in their home value. Realtors who do Broker Price Opinions (BPOs) are reporting a dramatic increase in BPO requests from lenders for this reason.
These are excerpts from Countrywide ... sent to borrowers before Countrywide FROZE Helocs:
"Important message about your loan: At Countrywide Home Loans we are committed to helping customers sustain homeownership. As part of the commitment, and in keeping with its sound risk-management and responsible lending practices, Countrywide Home Loans is reviewing and analyzing home equity lines of credit in its servicing portfolio.
As you know, home values in many areas of the country have declined. We believe that the decline in the value of your property, from its original appraised value at the time your loan was made is significant. In accordance with the terms of your Home Equity Credit Line Agreement and Disclosure Statement (Agreement), we have elected to suspend further draws against your account as of the Effective Date above.’ On Friday, the Los Angeles Times reported that Countrywide notified many homeowners they’ve lost their right to borrow against their credit lines:
‘ Tens of thousands of homeowners with home equity lines of credit are getting a rude surprise: They’ve been told by their lender that they can no longer take money out on their credit lines because sinking home prices have left them with little or no equity.
Among the lenders taking such action is Countrywide Financial Corp., which sent 122,000 letters to customers last week telling them they could no longer borrow against their credit lines. In some cases, according to the company, the borrowers are now “upside down” — the total debt on the home exceeds the market value of the property.
Calabasas-based Countrywide, the nation’s largest mortgage lender, says it uses computer modeling that factors in changes in home prices to determine which customers will have their money tap shut off. ’
Will we see a Chase HELOC freeze or a Bank of America HELOC Freeze? What will that do to the economy?
If there was any question that consumers were feeling the pinch before…just wait until they are told that their homes are worth LESS than what they owe. Or in the words of Countrywide…"Significantly Less”. Think that will have an effect on the economy? Do you think this will make consumers feel more confident about housing?
If you have a HELOC and you were considering using it to fund something important that your home or family needs, you might want to consider use it now before you receive such a letter.
Tags: HELOC, HELOC Freeze, upside down, Broker Price Opinion, BPO, credit line, appraisal, no equity, market value, property value, credit line borrowing
Buyers
The Greatest Opportunities For
Bargain Properties Are Here Now
Will You Be Prepared To Buy When
the Subprime Tsunami hits?
As you can see from the "Monthly ARM Reset Schedule" graph, many sellers have already been affected by Adjustable Rate Mortgage loan resets (to higher mortgage payments, foreclosures, and short sales). These sellers will lose their homes to foreclosure unless we can find buyers to buy these properties.
Over 2 million properties are affected by the subprime adjustment.
No political solutions are currently available to help these sellers. Our politicians are expecting the free market to work this out.
Lenders also have no solutions to help these sellers. Estimates of the dollar volume of the writeoffs of these subprime loans is $200-$300 Billion.
This crisis will continue for at least 18 months based on the chart above.
The best time to catch these properties and save the seller and profit as the buyer is in pre-foreclosure (they are about to or have already missed a mortgage payment). For almost all of these sellers, refinancing their mortgage is NOT AN OPTION.
We use a technique called the short sale or short payoff to help the seller get out of the property quickly while creating minimal impact on their credit. This approach also produces the best value for the buyer. Sellers who choose to:
walk away from their properties, or
give the deed to the property to the lender (deed in lieu of foreclosure), or
let the property go to foreclosure on the Court House steps,
are committing financial suicide that will linger on their credit for 7 years.
This crisis creates OPPORTUNITIES for you, the prepared buyer. These sellers must sell and they have little time to do it. You can help them and help yourself at the same time.
Buyers Who Want A Deal
If you would like to know more about how we help buyers find and buy these bargain properties, call our team at 404-384-2274, or click:
Help Me Find A Bargain
Sellers Who Are In Trouble
If you're a seller caught up in the pre-foreclosure process, call our team at 404-384-2274 to see how we can help you escape, or click:
Avoid or Stop Foreclosure
Tags: Subprime Tsunami, Mortgage Meltdown, Avoid Foreclosure, Preforeclosure, S & P Case-Schiller Home Price Index Report, bargain properties, refinancing mortgages, Monthly ARM Reset Schedule, adjustable rate mortgages, short sale, short payoff
How Can I Buy a Home With No Money Down?
Downpayment Assistance To The Rescue!
The Nehemiah Program ® is a downpayment assistance program that has already helped more than 250,000 individuals and families own homes NOW instead of trying to wait until they have saved enough money for a downpayment.
Nehemiah helps you achieve YOUR American dream with:
Gift funds up to 6% of the final contract sales price towards your downpayment and/or closing costs
Gift funds for both first time and repeat homebuyers
(Nehemiah charges a nominal processing fee that may be paid by the seller, homebuyer, or lender.)
Gift funds for both new construction and resale homes
No repayment of gift money
No income or asset limits
No geographical restrictions
If you are a qualified homebuyer using an eligible loan program, such as an FHA loan, you may be able to move into your new home with zero cash out of pocket! The Nehemiah Program can help you become a homeowner NOW instead of LATER!
Caution: Our politicians and bureaucrats (the Departmentof Housing & Urban Development (HUD)) are trying to ban programs like Nehemiah. The present program is in place for loans until 3/31/2008. So, if you've been waiting to buy, get started now.
Our team is Nehemiah-certified and is a member of the Nehemiah Listing System. We can help buyers use Nehemiah for downpayment assistance. We can also help sellers use the Nehemiah program to make their homes affordable to a larger pool of buyers.
To learn more about Nehemiah, go to:
http://getdownpayment.com
http://www.getdownpayment.com/buyers/index.asp (Buyers programs)
Please call Nehemiah toll-free at 877-634-3642 to find a Nehemiah participating lender near you today!
Tags: Nehemiah, downpayment assistance, no money down, zero down, first time buyers, home ownership.
Certainly it's confusing and frustrating to decide when it will be a sure thing to buy a home. Sure, housing's in a hole. But there's a potent case for buying now, whether it is real estate or stocks.
This article, by Dan Cadlec of Time Magazine - February 25, 2008, describes why
can leave you
Click here to read Dan's article: Ignore the Headlines!
Tags: buying now, economy, interest rates, lower prices, recession, housing, real estate, home buying, when to buy a home
You may have heard a news clip or sound byte that there is new hope for homeowners who are behind on their mortgages. One of the new programs is called Project Lifeline. In a nutshell, Lenders are advocating this new plan to save as many people as possible that are 90+ days delinquent on their mortgage.
For more on that, read here.
Here is how you can benefit from it RIGHT NOW:
Take action.
Call me today, (404)-384-2274, to see how we can help you prevent the consequences of foreclosure on your life, your finances, and your future.
Tags: Upside down, Project Lifeline, avoid foreclosure, delinquent mortgage, consequences of foreclosure