Option Arm’s

Option ARMs

A detonation of foreclosures will result from option ARMs set to reset to higher payments.

These unusual mortgages permitted homebuyers to come to closing with diminutive money and prefer, monthly, how much to pay: interest and principal, interest only, or a minimum amount less than the interest due.

Of course, the last alternative is the one 93% of option-ARM buyers selected, according to a new report released this week by Standard & Poors.

But ultimately, everybody has to pay the piper.

Almost all 350,000 option-ARM borrowers are indebted more than when they initial bought their homes thanks to the unpaid interest amass. And most of the loans written during the first big wave, which started in 2004, are getting ready for their five-year reset, when they become typical amortizing loans. Moreover, some newer loans will reset early if the collected interest has pushed the loan-to-value ratio above 110% to 125%.

That means borrowers have to start paying very huge prices for their homes. In one situation delineated in the S&P report, the payment on a $400,000 mortgage rises from $1,287 to $2,593.

25% default rate

But that doesn’t just spell bad news for borrowers. A few industry cynics say the threatening non-payment problem could have the power to damage the hopeful housing market revival. “The crux of the matter is that as soon as these mortgages recast, the history is that they will default,” said Brian Grow, one of the S&P report’s coauthors.

And the newer the loans, the worse they will perform, the report said. The last year that any option-ARMs were issued was 2007. In the first 20 months after issuance, this era of option-ARMs had an average default rate of just over 22%.

That includes all option-ARMs issued in 2007. But if you compute default rates for only 2007 option-ARM borrowers who are now submerged, the default rate jumps to 25% after just 20 months, according to S&P.

So, while there may not be lot of these terrible loans out there, their high default rates will have a great effect on housing markets, adding to already engorged foreclosure inventories and prices are driving down further.

Fizz markets

And the markets where they’ll produce the most foreclosures are still among the most vulnerable in the nation.

Option ARMs were most popular in fizz markets — California, Nevada, Florida and Arizona — where double digit home annual price amplify put the cost of buying a home out of reach.

Actually, 60% of these loans went to residents of California and other Western states, places where prices have drop the most, according to report coauthor Diane Westermarck. “The geography is depressing for these products,” she said.

Many borrowers in these places could only pay for a home if they chose the option ARM. Many counted on continued hot market conditions to add value to their homes. The extra equity could then be tapped to pay their bills.

We all know how that worked out.

Home value in many of the markets where option ARMs are most concentrated have fallen 30%, 40% or more. When the loans recast, most borrowers will find themselves harshly underwater.

“Because borrowers of [options ARMs] are in a much worse position,” said Westerback. “You’ll see defaults rising very rapidly.”

And most option ARM borrowers will not be good candidates for refinancing or mortgage adjustment because their loan-to-value ratios will be distant too high. Under the administration’s Making Home Affordable program, for example, mortgages with balances that go beyond 125% of the home’s value are not suitable for help.

Not so white lies

There is one more modest problem that many option-ARM borrowers seeking refinancing would face: “Upwards of 80% of were stated-income loans,” said Westerback.

These are the so-called “liar loans” in which lenders did not substantiate that borrowers make as much money as they said they did. Lenders may be unable to modify mortgages because many of the borrowers’ profits could not stand up to the examination. Borrowers may also not want to go through back again because they could be held officially liable for intentional inaccuracies on their original applications.

Add to those conditions the still flimsy economy and high unemployment rates, and you have a formula for calamity. To top of page

Short Sale With Ocwen

December 15, 2009 by  
Filed under Short Sale With Ocwen

Do you owe more than your home is worth? Is your loan with Ocwen? If you are considering doing a short sale with them we can help.  We have negotiated several successful short sales with Ocwen, allowing the owners to be released from any further deficiencies.

If you have a loan with Ocwen and are considering a foreclosure or short sale, contact Housing Assist today!! We can discuss your options, and find out if a short sale is the right move for you.

Short Sale With Select Portfolio Servicing/SPS

Do you owe more than your home is worth? Is your loan with Select Portfolio Servicing/SPS? If you are considering doing a short sale with them we can help.  We have negotiated several successful short sales with Select Portfolio, allowing the owners to be released from any further deficiencies.

If you have a loan with Select Portfolio Servicing/SPS and are considering a foreclosure or short sale, contact Housing Assist today!! We can discuss your options, and find out if a short sale is the right move for you.

Wells Fargo Short Sales

December 8, 2009 by  
Filed under Wells Fargo Short Sales

Wells Fargo Short Sales

Wells Fargo will work with you in a short sale. However, just as with any other lender the process can be boring at times. Here are some tips to avoid a bit of the hassle.

Situations that help!

You can qualify for Wells Fargo Mortgage short sale if you in debt far more than what your actually costs. However this is applicable only when you have single mortgage currently. If you have loans with two separate lending agencies then you are applicable for Wells Forgo short sale. If you hold two mortgages with Wells Fargo then you will find it little easy to figure out the situation. However, this will happen only if and when you present a clear case that you cannot afford the current mortgages. Also when you hold mortgages with different lenders (not Wells Fargo) then the process of getting a short sale through them is much tougher. That makes sense logically as Wells Fargo is incurring a loss which they didn’t take on in the first place!

You will not get the cash

When you perform a short sale with Wells Fargo you are not going to get any of the money. It will directly go to Wells Fargo. This is in spite of the fact that the amount quoted is much lesser than what the home is worth! However, convenient way is short sales to get away from the rigors of mortgage payment. At least you do not have to end up paying the whole amount and it is any day better than a foreclosure which can be disastrous on your credit score!

Negotiation is possible

If you are worried about getting affected by a short sale then there is hope now. Wells Fargo allows you the option of negotiating with them to prevent a foreclosure from leaving a black mark on your credit report.

Getting an agent is a great idea

Short sale process can be a long drawn out affair. Therefore doing it all by yourself and negotiating the terms can be a very harrowing experience. The best way you can avoid this by hiring an agent. This agent needs to be motivated to go the long distance with you and present the case in your favor. Often short sales take really long to happen and hiring a good agent can work to your advantage.

Keep a record

Make sure to keep a record of any conversations or written communication which gone with Wells Fargo. You could tape the conversation or note it down. Also note down names of people with whom you have spoken to at Wells Fargo. That way you have evidence if they deny anything they have promised you have evidence. It will also reduce chances of dissimilar facts being stated by different agents in Wells Fargo.

Walking Away

December 8, 2009 by  
Filed under Walking Away

Is walking away smart if your home is underwater?

That’s the base message from a University of Arizona law professor, whose new paper is hitting a nerve as the nation’s housing crisis figures its fourth year.

Brent White denies urging walking away from a mortgage that is bigger than the value of a home. Nonetheless, he lays out a case of how it can be done, and his suggestions have gone viral, starting up online, in newspapers and on television.

 

White is hardly first to talk about the idea of walking away from a mortgage that is bigger than the rate of a home. Nonetheless, his suggestions have gone viral and are popping up online, in newspapers and on television.

It’s a move that can save some people money, but at the expense of wrecking their credit.

 

The issue is important to what’s crippling the housing market: About one in four homeowners, or 10.7 million Americans, are considered underwater, meaning their mortgage exceeds their home rate, according to real-estate Information Company

Housing Assist of America

In the markets hardest hit by the nation’s housing bust — Florida, Arizona, California, Michigan and Nevada — the share of homeowners who are underwater is 40 percent.

“Millions of Americans would be better off financially if they did walk away,” says White, who authored the paper “Underwater and Not Walking Away: Pity, Fear and the Social Management of the Housing Crisis.”

 

What White is saying goes against everything that we’ve been taught about contracts. If you make a mortgage commitment, most people think you have a responsibility to pay.

On top of that, White suggests those who decide walk away should consider getting a new car or house before they default on their mortgage, which will constrain their credit.

Personal financial risks


Imagine if everyone who is underwater walked away. It could cause economic havoc. Home prices would plunge even more. Banks would have even more bad loans on their books, which would lead them to make fewer loans to consumers and businesses.

There are personal financial risks, too.

People who go into foreclosure but otherwise have good credit might escape in less time if they continue to pay their other bills on time. There is no magic number for how long that could deal. Mortgage lender Fannie won’t back another loan for five years for someone who was involved in a foreclosure, except when the default occurred because of an bad circumstance like a medical issue or unemployment.

“Walking away undermines the basic tenets of mortgage lending,” said Brian Faith, a spokesman for the government-controlled Fannie Mae.

Some see a double standard

Despite all that, White’s views resonate because he highlights a double standard in the home lending industry. Banks and other lenders doled out mortgages during the boom, often without demanding down payments or checking to see if borrowers had enough income. After the housing crash, many of these same loaners took billions in taxpayer money, even now are easy to change troubled mortgages.

 

The government’s attempts to fix this deal haven’t worked. The Obama administration acknowledged on Monday that it has fought to get loaners to permanently modify interest values on home loans. The government’s plan now is to shame loaners into to modify mortgages. The current strategy: Publish a list of those companies participating in the government $75 billion effort to stem foreclosures that are lagging on the modifications. “Wall Street gets to maximize profits and minimize losses irrespective of concerns about morality, while Main Street is told to keep their promises,” White says.

Housing Sector Recovery Could Take Years


White knows what he’s talking about. He is a scholar of behavioral economics and the law — two areas at the heart of the housing crisis. He believes homeowners worry about the shame involved with foreclosure and have an exaggerated anxiety over what a foreclosure will mean for a person going through it.

 

For those living in the most distressed markets, it could take years for home rates to rebound to peak levels — if they ever do. Those who bought high and put relatively low cash down might be able to keep money by walking away and renting, White says.

White judges that someone who purchased a home in Miami for $355,400 at the market’s peak may now have a home worth $198,000. If the homeowner put 5 percent down at the time of buy, he currently owes $132,000 more to the lender than his home is worth.

 

If that homeowner walks away, he wouldn’t realize to pay mortgage interest, mortgage insurance, taxes or homeowners’ insurance. White estimates that homeowner would save $116,000 by giving up on his mortgage and renting a comparable home.

Easing the terms of an existing mortgage can hold a borrower in his home, but the banks have little incentive to do so. Now the government is trying to shame banks into action, but that’s hardly enough. Congress considered a bill that would have let bankruptcy judges rewrite mortgages, but that legislation died last bound.

When abandoning a home sounds attractive, it’s time for greater choices.

Buying For Less

December 8, 2009 by  
Filed under Blog, Buying for Less

Buying Your Dream Home For Less

Everyone dreams of having a home that will shelter and care for their family. For this, many have worked hard to buy their hallucination home. With the present fall of value in the real estate and housing commerce, one can only ask: How to Buy for Less? This would signify to purchase for less than the actual listing value. The defense of having a home is something precious and for many, it stands for their personal and financial accomplishment. Moreover, a home is the most valuable speculation one can ever make, which comes with incentives like your federal tax deductibles. The rewards of owning your very home comes with a sense of personal pleasure that no other real assets can ever furnish.

Acquire for Low price

To purchase for less doesn’t mean going for the lowest offers in the real estate market. When you procure a home for a smaller amount, it means that you are becoming a smarter consumer out there who knows how to put in your hard-earned savings. In general, people believe that buying a home will mean giving a down payment that is twenty percent the total value of the home. When you mortgage a home, you will guess a 3-5 percent interest rate from your lenders. This type of mortgage is becoming trendy with many who dream of buying a home. It elongates their expenditure power; allow them to maximize their cash assets.

For folks who are prepared to pay for a new home, there are ways where you can obtain for less than what was presented by the real estate negotiator. Here are five helpful guidelines on how to buy that trance home for less:

Tips on buying a home

1. Check out the prices of foreclosed dwelling in the neighborhood where you are scheduling to purchase your residence. You may come across short sales or domicile for sale that cost lesser than its credit amount. There are vendor who will sell their home for less than the amount of their loans.

2. The unexpected drop of cost on the housing market makes it supreme to make low-ball bid to forthcoming sellers. It may cause some anxiety, and your offer may be overlooked. If an accord is reached, you should guess instant payment policies when the seller concurs to your citation purchase price. Some sellers will swiftly give in to your charge, in particular with the economic disaster going.

3. You can offer for new homes using the federal government sale on the web. You don’t need a real estate agent who will do the bidding for you, which helps you keep away from paying agent accuse. Most of the homes listed are for auction at prices lower than their market value. You may also check your local listing for home prices. Now, buying your home has never been this easy. Deposits will be requisite and you will send it by lead transfer. When you triumph the bidding, you can pay with cash, checks, cards, or wire transfer, depending on your local revenue methods

4. Oppose the fancy to buy incredibly low-priced homes, without scrutinize the home itself. Sometimes, what seems a good treaty can cost you even more, especially when there will be major repairs. You can always match up to homes and see if buying something that cost the same or somewhat higher can save you from an expensive home alteration. If you can hire someone to inspect the warmth, electrical, and plumbing works, you may do so.

5. Evaluate prices and features. Always be on the watch on great deals that will offer you supplementary inducement. You may not be buying a new home, but you can get additional features on a low-priced home like extra storage space, a huge courtyard, or a nice view of the bay. Prices of new homes are also dropping, and as a substitute of purchasing an existing home, you can pick for a new one.

If you’re setting up to buy a home through credit, make sure you assemble all the lender’s necessities to qualify you for a low down payment mortgage. Your capability to pay and keenness to clear up the loan are key factors in the approval of your credit. Although there will be confines set on what type of home you can buy with your credit, there will always be one that will suit your feel and wishes. The Federal Housing Administration or FHA may necessitate a down payment less than three percent, if your mortgage is sustain by government insurance. keep in mind that limits disagree from state-to-state and the mortgage provider of your choice. In the end, the home you buy for less should justify the price that you are willing to pay.

Your Dream Home Awaits You!

For Sale By Owner

December 4, 2009 by  
Filed under Blog, For Sale By Owner

How to Market a FSBO

 

FSBO or shortly known as “For Sale By Owner”. These FSBO Homes are often sold by techniques do-it-yourself and that has produced booming sales among many. This means you will not have any real estate or sales agent representing you when you sell FSBO homes. There will be no third party interference and many home buyers like this idea of negotiating directly with home sellers. In fact, the National Association of Realtors looks a growing market trend of FSBO Homes being sold more than their represented counterparts.

Selling FSBO homes are for those who want to sell their homes without the mediators and quickly. The mediator’s commission can be seven percent of home’s selling price. All home sellers need is to spend time and effort in promoting the FSBO homes for sale and learn the art of negotiating irresistible offers.

 

http://www.ahomecoach.com/FSBO.jpg

The below are the Seven Helpful Tips on How to Market Your FSBO Homes:

1. Find Out Your Marketing Price:

You should do research and compare your home with others of like features to know its market rate. Without research don’t figure out the value of your home. You include your renovation cost if you have done any renovation works. Don’t price your home too high or too low, fixing price in the median range is somewhat hard and also make room for discounts asked during the process.

2. Do a Home Makeover:

What’s pleasing to the eyes always have a way of turning into a pot of gold. Buyers can be simply tuned off with simple defects like paint or a cracked wall. Anything needs fixing will finally effect on your home’s selling cost. So do the necessary repairs to improve your home valuable before showing the house. You should spend in furnishing only if you plan to include them in your sale.

3. Look for Legal Advice:

Even though if you have skills that match those of cunning real estate agents you need legal advice or help in documentation, especially when calculating mortgages, contracts or filing legal documentation like a deeds of sale or transfer of title. You need to give out extra funds for your legal expert to assist you in making the sales of your FSBO homes.

4. Gain knowledge About Self-Promotion:

To sell FSBO home you don’t need to invest a huge to prospective clients. There are many free sites to post ads of your FSBO home listings on the web. You should keep your listing updated so it won’t look like it’s taking too long to sell. Take a good photo of your home and be brief with your description and mention any flaws, if applicable. You can also mention number of rooms, historical value, nearest amenities so that your home will be more attractive to buyers. Or you can simply just rely on “word of mouth” to spread the news about your home for sale.

5. Prepare for Home Visits:

Your home doesn’t need to look special, but make sure it is clean and esthetically pleasing. You need to schedule your home visits such that it should satisfy all prospective home buyers on your lists. Highlighting the architectural elements, any scenic views you can increase the chances of your home sold. It can be a lot of work, but if you have the extra time, you may put up an open-house for visits anytime

.

6. Make a Firm Offer:

Although you are presented with the best offer, be sensible and take some time to make the decision. Even before agreeing to your buyer’s term, you need to check his or her financial capabilities and make sure that they are qualified for the mortgage or else you both are wasting your time. You need to know the art of counter offer if you don’t agree with the offer of buyer and always compare offers before finally going for one.

7. Shield Your Interest:

To make smooth payment transaction process, you can have escrow. Having a neutral third party to hold all your legal documents until and unless goods and cash are exchanged can protect from miss-dealings. Make sure there are contingencies in place where you will have the right to reject the initial offer if you don’t meet your specified requirements of your FSBO homes.

Credit Score and Its Importance

December 4, 2009 by  
Filed under Blog, Credit Score and Its Importance

What is your credit score and why is it so important?

First off, let’s get one thing strait: If you have enough money to pay for everything in cash, you don’t need a good credit score. But, since really no one pays for everything they purchase in cash, your credit score can come in quite handy to say the least.

Your credit score affects everything from the interest rate on a mortgage to whether or not you’ll get approved for that apartment you applied for.

Credit Score Tips

Firstly you should know the difference between your credit score and your credit report. Find out what is your credit report. If you have a descent amount of cash available to pay down the debt then you can raise your score fast or else hire a lawyer to do good credit repair.

Fast credit repair can be done, but again, your credit score isn’t one of those things that move quickly. Most credit issues take time to resolve.

Negative items on your credit report can be disputed. But you’ll need to be careful disputing items to raise your credit score. Many companies will do a credit check or credit report enquiry on you before allowing you to access their service.

Buy a Home For Less

December 4, 2009 by  
Filed under Blog, Buy a Home For Less

How to Buy a Home For Less

Everyone dreams of their own home that will shelter and nurture a family. To fulfill their dream many have worked hard. With the current crisis or fall of price the only question the buyer may ask: How to Buy Less? This would mean to buy home for less than the original cost. The security of owning a home is priceless and it represents the personal and financial achievement that they. Besides, a home is the most valuable investment one can ever make, which comes with incentives like your federal tax deductibles. The rewards of owning a home comes with a sense of personal satisfaction that no other tangible assets can ever give.

Buy for Less:

Buy for less doesn’t mean going for the lowest offers in the real estate market. When you buy a home for less, it means that you are becoming a smarter buyer out there who knows how to invest your savings. Normally people believe that buying a home will mean giving twenty percent of total value as down payment. When you mortgage a home, you will expect a 3-5 percent interest rate from your lenders. This type is becoming popular with many who dream of buying a home. It stretches their spending power, allowing them to maximize their cash resources.

http://www.aaci.org.il/upimages/buying%20a%20home.jpg

Here Are Five Helpful Tips on How To Buy Dream Home For Less:

1. Check the prices of homes which are foreclosed in the neighborhood where you are planning to buy your new home. You many encounter short sales. There are sellers who will sell their home for less than the amount of their loans.

2. The sudden fall of prices makes it ideal in housing market to make low offers to sellers. It may cause some stress and your offer may be ignored. But once the agreement is reached, you can expect immediate payment terms. Some sellers will quickly give in to your rate, especially with the economic crisis going.

3. Through web you can bid for new homes using federal government auctions. By this bidding process you don’t need to hire an agent which helps you to avoid paying agent commissions. And most homes are listed for sale lower than their market value. You may also check your local listing for home auctions. To bid for home deposits are required and you will send it by wire transfer. When you win the bidding you can pay the total amount though cash, checks, cards, or wire transfer, depending on your local revenue department.

4. If you got an offer to buy a home at an unbelievably low-price, resist the desire to buy without inspecting the home itself. Sometimes, what seems a good deal can cost you even more. You can always compare homes, and see if buying homes that cost the same or slightly higher can save you from an expensive home makeover. If you can hire someone to inspect the heating, electrical, and plumbing works, you may do so.

5. Compare the homes prices and their features. Always be on the watch on great deals that will offer you additional incentives. Even though you are not buying a new home you can get extra features on a low-priced home like extra storage space, a huge patio, or a nice view of the bay. Prices of new homes are dropping, and instead of purchasing an existing home, you can opt for a new one.

If you’re planning to purchase a home through mortgage, make sure you meet all the lender’s prerequisites to qualify you for a low down payment mortgage. Your ability to pay and willingness to finalize the loan are key elements in the approval of your mortgage. Although there will be bounds set on what type of home you can purchase with your mortgage, there will always be one that will suit your taste and needs. The Federal Housing Administration or FHA may require a down payment less than three percent, if your mortgage is supported by government insurance. Remember that bounds change from state-to-state and the mortgage provider of your choice. In the end, the home you purchase for less should justify the price that you are ready to pay. Your Dream Home Awaits!

 

Considering Leasing

December 4, 2009 by  
Filed under Blog, Considering Leasing

Five Causes to Consider Leasing

1. Growth in Cash Flow and Return of Assets

Since leasing provides you with full financing, minus the down payment, you can preserve your cash assets which could have been used to purchase your capital equipments in the first place. What’s great is that you can schedule your lease payment to align with your income flow, which will not over-burden you, especially when funds are short. Also, a leased asset will not appear in your balance sheet, which means that you will have better revenue reports which are measured by company managers. Since sales tax and other forms of taxes are paid out together with the monthly lease payment, you can simply preserve your capital asset.

2. Preservation of Existing Credit Lines

Since you don’t pay a down payment for your third party lease, you then allow new credit lines to enter, as well as preserving your existing ones. Your credit lines are comparable to your cash reserves and you need to maintain it to build your inventory and financial sheets.

3. Helps Hold Your Money in Place

Since leasing can be tailor-made to suit your budget, you can choose how you pay, depending on your estimated financial returns. Most leasing choices are based on fixed rates which protect you against inflation rates. Leasing also helps you allocate a fixed amount of payment every month which is easier than making a capital budget plan approved. You can even use the income made from the use of new equipments you have acquired to pay for your lease, making money work for your business efficiently. When your money is kept in place, this can also mean more buying power for your business.

4. More Flexibility for Your Finances

To consider leasing means to have various types of options for your buys. With leasing, you can easily upgrade, add specifications, or deal your existing capital equipment. Technology is the fastest asset that can depreciate and go outdated in such a short time and many fear the risks of losing their equipment value upon sale. For this, leasing puts a distinction between what your equipment cost and what it can pay you, making you avoid this pitfall.

5. Tax Gains

Leasing can be your new ally when it comes to getting tax breaks where you can deduct your operating expenses. You need to talk to your tax or legal expert for advices on potential tax breaks you can have on your lease.

In the end, leasing gives you more buying ability, helping you shorten your initial business price. On top of these, you still get to own state-of-the-art equipments of your choice. With more cash and available equipment ready for your new business operation, you can definitely never go wrong with a leasing choice. This is why many companies have chosen leasing as their means of making ends meet in these tough and uncertain economic times. Maximize Your Choices!

Next Page »

Housing Assist Coldwellbanker