If you cannot or do not want to keep your home, your mortgage company can work with you to avoid foreclosure. This can help reduce the negative effect on your credit reputation. There are several different ways this might occur depending upon your financial circumstances:
• An assumption permits a qualified buyer to take over your mortgage debt and pay the mortgage payments, even if the mortgage is non-assumable. As a result, you may be able to sell your property and avoid foreclosure.
• If you can sell your house but the sale proceeds are less than the total amount you owe on your mortgage, your mortgage company may agree to a short payoff and write off the portion of your mortgage that exceeds the net proceeds from the sale.
• Your mortgage company may agree to a deed-in-lieu of foreclosure if you agree to voluntarily transfer title of your property to your mortgage company in exchange for cancellation of your mortgage debt. In most cases, you must attempt to sell your home for its fair market value for at least 90 days before a mortgage company will consider this option. This option may be unavailable if there are other liens on your home, such as judgments from other creditors, second mortgages, or tax liens.
Warm Regards,
David Rigney
Professional Realtor® in the Chicagoland Area
www.davidrigney.com
david.rigney@remax.net
Direct Line: 847.732.7436
24 Hour Real Estate Information Line @ 1.800.731.1162
RE/MAX Properties NorthWest
Wednesday, May 30, 2007
Sunday, May 20, 2007
How to Avoid Foreclosures and Keep Your Home
You're not alone if you're having trouble paying your mortgage. The housing boom led to a record homeownership rate of nearly 70 percent, but some homeowners now face problems making their mortgage payments and can't refinance their loans. This brochure will help you understand your options and give you tips on how to avoid losing your home -- regardless of what kind of mortgage you have. Download How to Avoid Foreclosures and Keep Your Home (PDF: 1.7MB).
How to Avoid Predatory Lending
For most families, buying a home is the biggest and smartest purchase they ever make. Unfortunately, not all loans are in their best interest.
When loans hurt instead of help, they can quickly lead to foreclosure and even bankruptcy. It's important to learn the warning signs and common problems associated with predatory lending, and to ask the right questions when shopping for low cost loans.
The term, "predatory lending" covers a wide range of abusive practices. Some may be predatory for one borrower but not for another, because everyone's circumstances are different. Predatory lenders often take advantage of first-time homebuyers and others who may be vulnerable to high-pressure sales tactics, so it pays to know how to protect yourself and who can help.
Nearly all predatory lending occurs in the "subprime market," where loans are sold to people with less than ideal credit histories. Subprime loans have played an important role in helping millions of consumers achieve homeownership, but, unfortunately, some lenders abuse their role and take unfair advantage of vulnerable borrowers
Possible warning signs of a predatory loan
It sounds too easy: "Guaranteed approval" or "no income verification" sometimes indicate that the lender doesn't care whether you can afford to make the payments over the long haul.
Excessive fees: Make sure fees are typical of those in your market. Because these costs can be financed as part of the loan, they are easy to disguise or downplay. On competitive loans, fees are negotiable. It is common for home buyers to pay only one percent of the loan amount for prime loans. By contrast, a typical predatory loan may cost five percent or more.
Large future costs: High-risk adjustable rate mortgages with payments that rise substantially after a short introductory period are seldom appropriate for families who already have had problems repaying other loans. Home buyers should also avoid a large, single "balloon" payment (a lump sum due at the end of the loan's term).
Closing delays: A lender who deliberately delays the closing may be waiting for the commitment on a reasonably-priced loan to expire.
Over-valued property: Inflated appraisals can allow for excessive fees to be included in the loan, resulting in the borrower owing more to the bank than the home is worth.
Barriers to refinancing: Prepayment penalties can make it hard for borrowers to refinance and take advantage of a lower-cost loans.
No down payment loans: These loans may be split into two mortgages, with one having a much higher cost. Home buyers should be sure they can afford the payments.
Unethical document management: An ethical lender or broker will always require you to sign key loan papers, and they will never ask you to sign a document dated before the date you sign it.
When loans hurt instead of help, they can quickly lead to foreclosure and even bankruptcy. It's important to learn the warning signs and common problems associated with predatory lending, and to ask the right questions when shopping for low cost loans.
The term, "predatory lending" covers a wide range of abusive practices. Some may be predatory for one borrower but not for another, because everyone's circumstances are different. Predatory lenders often take advantage of first-time homebuyers and others who may be vulnerable to high-pressure sales tactics, so it pays to know how to protect yourself and who can help.
Nearly all predatory lending occurs in the "subprime market," where loans are sold to people with less than ideal credit histories. Subprime loans have played an important role in helping millions of consumers achieve homeownership, but, unfortunately, some lenders abuse their role and take unfair advantage of vulnerable borrowers
Possible warning signs of a predatory loan
It sounds too easy: "Guaranteed approval" or "no income verification" sometimes indicate that the lender doesn't care whether you can afford to make the payments over the long haul.
Excessive fees: Make sure fees are typical of those in your market. Because these costs can be financed as part of the loan, they are easy to disguise or downplay. On competitive loans, fees are negotiable. It is common for home buyers to pay only one percent of the loan amount for prime loans. By contrast, a typical predatory loan may cost five percent or more.
Large future costs: High-risk adjustable rate mortgages with payments that rise substantially after a short introductory period are seldom appropriate for families who already have had problems repaying other loans. Home buyers should also avoid a large, single "balloon" payment (a lump sum due at the end of the loan's term).
Closing delays: A lender who deliberately delays the closing may be waiting for the commitment on a reasonably-priced loan to expire.
Over-valued property: Inflated appraisals can allow for excessive fees to be included in the loan, resulting in the borrower owing more to the bank than the home is worth.
Barriers to refinancing: Prepayment penalties can make it hard for borrowers to refinance and take advantage of a lower-cost loans.
No down payment loans: These loans may be split into two mortgages, with one having a much higher cost. Home buyers should be sure they can afford the payments.
Unethical document management: An ethical lender or broker will always require you to sign key loan papers, and they will never ask you to sign a document dated before the date you sign it.
NAR expects "soft landing" for real estate market
The NATIONAL ASSOCIATION OF REALTORS® still expects more than 6 million existing-home sales in 2007, but stricter lending standards and a decline in subprime mortgage origination have contributed to somewhat lowered expectations compared with earlier forecasts, according to the latest projections from NAR."
And, what is forecasted for interest rates?
"The 30-year fixed-rate mortgage should rise slowly to 6.5 percent by the fourth quarter, NAR predicts. Last week, Freddie Mac reported the 30-year rate was 6.16 percent."
And, what is forecasted for interest rates?
"The 30-year fixed-rate mortgage should rise slowly to 6.5 percent by the fourth quarter, NAR predicts. Last week, Freddie Mac reported the 30-year rate was 6.16 percent."
New home sales data released
The National Association of Home Builders (NAHB) has released data for March new home sales. The NAHB reports that "Sales of new single-family homes increased a slight 2.6 percent in March to a seasonally adjusted annual rate of 858,000 units, following sharp declines in both January and February, according to figures released by the U.S. Commerce Department today. The March sales pace was 23.5 percent below a year earlier."
Citing the tightening of mortgage lenders as a reaction to subprime woes, the NAHB also reports that the inventory of new homes is also growing. Another sign of the weak housing market.
"The inventory of new homes for sale edged up in March to 545,000 units, equivalent to a 7.8 months’ supply at the March sales pace. Completed homes for sale were 33 percent of the inventory, while units still under construction represented 50 percent of the inventory and units for-sale that were permitted but not yet started represented almost 17 percent of the inventory level. The median length of time that completed homes were on the market was 5.6 months in March, up from 5.2 months in February."
Citing the tightening of mortgage lenders as a reaction to subprime woes, the NAHB also reports that the inventory of new homes is also growing. Another sign of the weak housing market.
"The inventory of new homes for sale edged up in March to 545,000 units, equivalent to a 7.8 months’ supply at the March sales pace. Completed homes for sale were 33 percent of the inventory, while units still under construction represented 50 percent of the inventory and units for-sale that were permitted but not yet started represented almost 17 percent of the inventory level. The median length of time that completed homes were on the market was 5.6 months in March, up from 5.2 months in February."
March home sales slow
The National Association of Realtors (NAR) reports that "After rising for three consecutive months, total existing-home sales – including single-family, townhomes,condominiums and co-ops – fell 8.4 percent to a seasonally adjusted annual rate of 6.12 million units in March from a pace of 6.68 million in February, and are 11.3 percent below the 6.90 million-unit level in March 2006."
Mortgage Rates UP - 4th week in a row
Bankrate.com reports that "The benchmark 30-year fixed-rate mortgage rose 6 basis points to 6.31 percent ... One year ago, the mortgage index was 6.56 percent; four weeks ago, it was 6.16 percent. On Feb. 14, it was 6.32 percent, and it hasn't been that high since."
Thursday, May 03, 2007
Zillow Told To Stop Providing Estimates In Arizona
The Arizona Board of Appraisals has ordered Zillow.com to stop providing online home values to Arizona residents, contending that Zillow's "zestimates" amount to appraisals that the Web site is not licensed to provide.
The Appraisal Board has sent two cease and desist orders to the Seattle-based technology company.
A spokeswoman for the company said, "We have responded to the letters from the Arizona Board of Appraisal and hope to engage in a productive dialogue with them."
The Web site states that its estimated home values are not appraisals and should not be considered reliable.
The Appraisal Board has sent two cease and desist orders to the Seattle-based technology company.
A spokeswoman for the company said, "We have responded to the letters from the Arizona Board of Appraisal and hope to engage in a productive dialogue with them."
The Web site states that its estimated home values are not appraisals and should not be considered reliable.
Wednesday, May 02, 2007
New home sales data released
The National Association of Home Builders (NAHB) has released data for March new home sales. The NAHB reports that "Sales of new single-family homes increased a slight 2.6 percent in March to a seasonally adjusted annual rate of 858,000 units, following sharp declines in both January and February, according to figures released by the U.S. Commerce Department today. The March sales pace was 23.5 percent below a year earlier."
Citing the tightening of mortgage lenders as a reaction to subprime woes, the NAHB also reports that the inventory of new homes is also growing. Another sign of the weak housing market.
"The inventory of new homes for sale edged up in March to 545,000 units, equivalent to a 7.8 months’ supply at the March sales pace. Completed homes for sale were 33 percent of the inventory, while units still under construction represented 50 percent of the inventory and units for-sale that were permitted but not yet started represented almost 17 percent of the inventory level. The median length of time that completed homes were on the market was 5.6 months in March, up from 5.2 months in February."
Citing the tightening of mortgage lenders as a reaction to subprime woes, the NAHB also reports that the inventory of new homes is also growing. Another sign of the weak housing market.
"The inventory of new homes for sale edged up in March to 545,000 units, equivalent to a 7.8 months’ supply at the March sales pace. Completed homes for sale were 33 percent of the inventory, while units still under construction represented 50 percent of the inventory and units for-sale that were permitted but not yet started represented almost 17 percent of the inventory level. The median length of time that completed homes were on the market was 5.6 months in March, up from 5.2 months in February."
March home sales slow
The National Association of Realtors (NAR) reports that "After rising for three consecutive months, total existing-home sales – including single-family, townhomes,condominiums and co-ops – fell 8.4 percent to a seasonally adjusted annual rate of 6.12 million units in March from a pace of 6.68 million in February, and are 11.3 percent below the 6.90 million-unit level in March 2006."