When Modification is Denied
Not every loan will qualify for the making homes affordable modification program initiated by President Obama. The loan must be owned by Freddie or Fannie. There are mortgage companies that will not disclose that your loan is backed by or owned by Freddie Mac or Fannie Mae, and may just advise you that you were denied the modification without providing you a reason. This is something you will have to be specific about and ask them. If your loan does not meet the given criteria, then you will need to ask about in-house modification or other options available to you from your mortgage company. If you are turned down for an in-house modification, the alternative is to work fast on paying off debt, increasing income and whatever else your mortgage company will recommend you to do to save your home.
Since foreclosure is not an option, then consider a quick sale as a last resort. This will allow you to save your credit as well as allow you to purchase another home when your finances are in right standing.
It is truly amazing how these corporations can receive a bail-out for allowing this housing hardship to happen in the first place, but the people of this country can only receive refinancing if they qualify.
It’s a Buy Now-er’s Market
Mortgage company Freddie Mac announced a rise in the standard 30 year fixed mortgage rate. The average rate rose from 4.82% to 4.91% in a week’s time.
Real estate agents and agencies continually sell the fact that it is a buyer’s market. It is a buyer’s market, that is, for those who will buy now. Like the car commercial says, “You may never have this kind of buying power again!”
And you probably won’t anytime soon. If you are thinking that you can wait around for the best rate and will catch the “big deal” you are only hurting yourself. If you are going to buy, buy now. Rates are only rising. A nine-hundredth percent raise may not seem like much, but if you do the math, .09% of 10,000 is 900. Now, every $10,000 you finance has an additional $900 to it. Those dollars add up fast.
If you are looking to buy a home, now is the time to buy. Focus on your important factors and get ready to finance. Rates will only continue to rise.
The Housing Bubble Could Blow Very Soon
In a recent report Freddie Mac has been trying to soothe everyone and using words such as “orderly and moderate cooling”. Last I checked we were not talking about an apple pie. Carefully worded statements and a soothing tone will not calm down consumers and business men and women who stand to lose a lot of money if things keep going down hill in the real estate game.
Freddie Mac stated that it expects that gradually rising interest rates will “slacken” demand further and that home sales and construction will decline about 7 percent in 2006. This would, the report said, still result in the third best year ever for those figures, outstripped only by 2005 and 2004. Still, housing starts are expected to decline 16 percent on an annualized basis from 2.13 million units in the first quarter to 1.79 million in the forth quarter, averaging 1.93 million for the year. The May report had projected 1.93 million housing starts for 2007 but that projection quietly became 1.78 million in the June summary tables.
Hawaii Mortgage Rates Ease
The mortgage rates in Hawaii had been on the rise for some time now. I can understand that, who doesn’t want a home in beautiful Hawaii? I would move their if I could afford it, but alas I can’t and the way that rates were going up, it appears that many others couldn’t as well.
That has now eased as two of the largest banks in Hawaii and a few others in the mortgage industry have lowered their 30-year home loan to 6.25%.
Erase the middle, owner finance and offer a mortgage yourself …
Of course, this only works if you own the home fully yourself (well, only works to the best benefit) … but why pay a commission to a mortgage agency or bank? Offer the mortgage to the buyer yourself. Grab your lawyer, set up an amortization statement and statement of purchase, and take the down payment, and set up the monthly payments. I did it with my land and home, and they paid it off just under a year ago. Working with them, often they would increase their payments and it was really nice doing the old fashioned traditional way. You maximize your profit and its pretty simple to do. Of course there is risk that you’ll lose out if they stop paying and that’s where some agencies can help … but if you set up your contract properly, enforced through your lawyer, if they miss payments, then they default, and you get your home back to sell to someone else, though that would be pretty foul to do. But its a safety valve.
Ameriquest Shuts Its Doors
In a shocking move Ameriquest a large mortgage provider, has closed 229 retail branches. They are also laying off more than 3,800 workers.
The company said it will consolidate its branch operations into four regional mortgage production centers in Arizona, California, Connecticut and Illinois, and handle more corporate matters from its headquarters in Orange, Calif.
”The drive for this is that the company sees a fundamental shift going on in how consumers buy mortgage loans with a move away from bricks and mortar and more towards technology,” a spokesman for ACH said.
In a nationwide lawsuit settled in January, Ameriquest agreed to pay $325 million to the states for predatory lending practices that costs consumers tens of millions of dollars.
It should not be a surprise to anyone that people are greedy. This company was doing great until they decided to bilk customers out of millions and now they have to pay back so much money it could cost them the entire business. Ethical is as ethical does I guess.
Beware of these Mortgage Companies
Delinquency rates are on the rise. They jumped “more than 7%, to 4.7% in the fourth quarter of 2005, from the year before,” according to the Mortgage Bankers Association.
Despite this, many lenders aren’t cutting back on exotic mortgages — in fact, they’re “charging ahead on such high-risk loans full tilt.” They claim that cutthroat competition leaves them no other option.
But pushing the envelope today could lead to major problems tomorrow for these aggressive finance outfits. Be especially wary of the following companies:
- ECC Capital Corporation and New Century Financial Corporation “do big business in California, where the median house price jumped 16% last year, to reach a record $548,430.”
- Long Beach Mortgage Corporation (a unit of Washington Mutual) and NovaStar Financial “require only limited documentation and therefore may invite fraud.”
- Fieldstone Investment Corporation and First Franklin Financial Corporation “write lots of loans called interest-only or option adjustable-rate mortgages, which allow borrowers to postpone making repayments of principal and even add unpaid interest to the debt.”
Source: BusinessWeek
Review of LendingTree.com
Recently, we found a need to do some work on our house. Our roof had a leak, and the guys we had come take a look at it said they wouldn’t touch it without putting a whole new roof on. That, combined with a desire to lock in a fixed rate on our mortgage and also to do some work on our kitchen led us to start looking around to see what our options for refinancing our mortgage were.
We first contacted QuickenLoans since they had refinanced us once before and we had liked the process – quick and painless. We got a quote from our contact there, for a 15 year fixed rate loan taking out some of the equity from our house to pay for the roof and kitchen work.
Then, we also contacted LendingTree.com, since I had heard their ads on NPR about “when banks compete, you win”. The process of filling out their site was easy enough, but the real process didn’t begin until I got a call from one of their lending specialists.
He explained that basically, the banks that deal with LendingTree have an arrangement that says that if there is a better offer, they have to beat it. So, having an offer in-hand from the Quicken guy was helpful, and in the end we focused our attention on minimizing the closing costs, even if it meant a little bit higher interest rate.
We liked the overall process, it took about 3 1/2 weeks total from start to finish, and the check for our cash-out arrived just the other day. All in all, I’d have to say that LendingTree provided a good service and value, and we now have a solid new mortgage.
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