Underwater Homeowners Buying New Homes

Underwater Homeowners Purchasing New Homes

Blame the America dream for the ingenuity in this new trend that we are now seeing.  People are fixated on the fact of owning a home, even if they are currently upside down on their existing property.   Some people are trying to sell their existing homes at a loss (short sale) and purchase bigger homes at a similar cost in today’s market.

Some experts say it makes a lot of sense, since homeowners can get out of bad, old mortgages and get into fresh, larger ones, without raising their monthly payment much. That’s because home prices have dropped and interest rates have gone so low.  What are your thoughts?

Bankruptcy May Prevent Foreclosure

Can Bankruptcy Prevent Foreclosure?

There are some cases where bankruptcy can help homeowners prevent foreclosure.  The first and foremost thing a bankruptcy will do is stop the foreclosure process.  Lenders are unable to proceed with a foreclosure until permitted to do so by the courts.

When filing for bankruptcy, there are two types to decide from: Chapter 7 and Chapter 13.

A chapter 7 bankruptcy will stop foreclosure, but this will usually lead to having to liquidate your assets.  Many BK attorneys prefer this method because it gets rid of all unsecured debt, but leaves secured debt such as your mortgage, exempt.  In a case like this, borrowers will still owe their mortgage payments but they can now afford to make them because all of their other debts have been discharged.

Although many experts claim that Chapter 13 is usually more effective at helping homeowners keep their home.  This gives them time to repair their finances, lasting anywhere from 3-5 years, over this period of time the court allows an income based budget with monthly payments made to trustees.

The trustees pay the bills, first paying off the secured debt. After that, the trustee pays off unsecured debt, starting with back income taxes.  Following this  comes unsecured debt, such as credit cards and medical bills.  If borrowers keep up on their payments they can emerge from bankruptcy with their homes still in their possessions.

Mortgage Loan

What is a mortgage loan?

A mortgage loan is a loan that is secured by real property though a mortgage note.  A mortgage note proves existence of the loan and the encumbrance of that realty through the granting of a mortgage which secures the loan.

Assets definition

What are assets?

Assets are economic resources.   There are tangible and intangible assets that are capable of being owned or controlled to produce value and that is held to have positive economic value. To break it down even more so, assets represent ownership of value that can be converted into cash.

Debt definition

What is Debt?

Debt is usually referencing assets that are owed.  In the case of assets, debt is a means of utilizing  future purchasing power in the present before the summation has been earned.

HAMP Program Drops Applicants!

HAMP Program is Failing Horribly

We will give  a head nod for the governments good intentions in attempting to modify a large number of homeowners loans, although they have horribly failed to modify majority of these loans.    530,o0o of the 1.3 million enrolled in the HAMP program have had their one time reduced payments now terminated.   These people enrolled were expected to contribute 1/3 of their income to their mortgage.   A primary reason that these homeowners have been dropped is missing payments and an inability to meet income and debt requiremenets.

Low Mortgage Rates Generate New Loan Applications

Record Low Mortgage Rate Bring in New Loan Applications

We have finally seen a rise in mortgage applications.  We have seen interest rates drop considerably, but it has finally resulted in an outcome.  Last week the 30-year fixed mortgage rates dropped to 4.59%, which triggered mortgage apps to increase to 3.4%.

Foreclosed Homes 30% Off

Foreclosures, Foreclosures, Foreclosures…

Foreclosures took the cake for the first 3 months of 2010, accounting for nearly 1/3 of all sales.  Many of these foreclosures were selling at a 30% discount.

When we are referring to these  foreclosure sales they include properties sold in short sales or after a bank repossession, known as REOs in industry terms.

REOs are the homes that are already taken back from the borrowers, selling for on average average 34% less than conventional sales while pre-foreclosures averaged only 15% less.

Part of the reason for the bigger price cut for REOs is that many of them come to the market in poor condition, their previous owners either unable to or unwilling to maintain them.

A fascinating statistic is that during 2009, more than 1.2 million property sales involved foreclosures. That grew 25% compared with the year before, and 2,500% from 2005.

Rush Limbaugh Sells NY Condo

Rush Limbaugh Exits New York

Rush had stated that we was looking to leave New York completely, after New York State announced that it was introducing a temporary income tax surcharge.  Rush has stuck to his word on a real estate level, selling his penthouse of Fifth Avenue for around $11.5 million.  The beautifully decorated apartment has a 30 foot wide living room with four terraces which over look Central Park.