Stay Real ~ Home Lending

Hey everyone,
     Home lending is a big concern for most buyers out there because it is a very important piece in the puzzle of gaining home ownership. Therefore, it is good to know where the lenders are at with the leniency regarding giving out home loans. As most of us know, a big contributor of the housing market collapse was the fact that banks and other mortgage lenders were issuing loans to people who really did not qualify for the issued loan amounts. It got to a point where, if you had a pulse, you got a mortgage loan. But as we all saw, once the people responsible for the mortgages realized they could not afford the payments, they began to default. It was a dominos effect throughout the country, loans defaulting left and right. As you could expect, lenders are more serious about the qualification process because they want to make sure that they will get there money back. In 2011, home lending reached its lowest point since 1995 (a little before the lending went crazy). This low number of newly issued loans supports the reports of many people having a more difficult time qualifying for mortgages. There was a 10% drop in home loans last year coming out to 7.1 million issued loans. That number is .8 million lower than the number of loans issued in 2010. Although we have the extremely low mortgage rates, the drop is home loans issued is credited to the fact that lenders are being more strict and requiring higher credit scores to acquire a loan.

This is just some information to keep in mind when you start your research on mortgages and begin the process of applying.

Strategic Defaulters: WATCH OUT

First let me explain what a strategic defaulter is. A strategic defaulter is typically an "underwater" home owner who has walked away from a mortgage commitment while still having the ability to pay. The housing market has been inundated with foreclosures over the last few years, but credit repository Experian has estimated that 20% of those foreclosures were the result of walk-aways (or Strategic Defaulters). Well now it is payback time! The Office of the Inspector General at the Federal Finance Housing agency is cracking down and taking action against these so called "strategic defaulters" by seeking them out and collecting on what they still owe. The Office of the Inspector General assumes that there is nearly $1 Billion owed to Fannie Mae and Freddie Mac and it needs to be collected.

If that is not bad enough news for any strategic defaulter, there is more! Not only are they being sought out for the money that they owe, but anyone who is a strategic defaulter and did not mention that fact on any mortgages applications after they walked away will be considered to have made MORTGAGE FRAUD. The Office of the Inspector General intends on referring these individuals for criminal prosecution. "We are working with Fannie and Freddie to build a mechanism" to identify strategic defaulters, Wolfe said at a recent mortgage industry conference. So if you walked away from one property and bought another, chances are fairly good that the OIG is going to find you.

"We're not just going to demanf repayment," says Heather Wolfe, OIG assistant inspector general for audits. "We're going to lock [people] up."


*source: Chicago Tribune

Back in Action!

I apologize for the lack of postings lately but I have been going through a lot of training and last week was a tremendous learning experience for me. I am back now and ready to get the information flowing again! Ill be posting soon!

Stay Real ~ Mortgage: FHA 203(k)

Hey everyone, I wanted to talk to you all about a certain type of mortgage that many may not be aware of, but can be very beneficial and help to get you to the desired status of home ownership. The FHA 203(k) program provides a single close loan that enables a qualified buyer to purchase a home that may need repairs, to refinance an existing home for the purpose of remodeling, or to move an existing home to a mortgaged property. The streamlined FHA 203(k) program allows the buyer to finance a maximum of $35,000 to make improvements. Both programs generate the necessary funds for renovation by financing the as-completed value of the home, rather than the present value.

FEATURES:

• primary residences that are 1 to 4 unit properties
• purchase and rate/term financing
• fixed rate mortgages with 30 year term
• up to six months for rehabilitation
• one underwriting review and one closing for rehabilitation construction and permanent financing

This type of loan is meant for borrowers who:

• want an alternative to a closed-end second mortgage or HELOC
• can benefit from flexible qualifying requirements
• are looking for a cost effective way to repair or improve their current home
• plan to purchase a home that needs repairs
• want to rehabilitate a neglected or damaged foreclosure property

This is a very smart way to go if your needs fit the ones I described and I would recommend consulting a mortgage counselor for more details. The economy is tough but dont get discouraged because, just like the FHA 203(k) programs, there are many other options to assist you in closing on the home you want. I strongly recommend consulting a Mortgage counselor in order to see all of your options because it may be easier than you think to acquire the home you want and get it when you want it.