Archive for the ‘Mortgage’ Category
Monday, May 21st, 2012
Tuesday, February 14th, 2012
According to the article titled “‘Tax-Free’ and Other Catnip’”, written by Jane Bryant Quinn and published in the AARP Bulletin, “[r]everse mortgages are attracting a younger crowd.” Specifically, those 62 (the earliest one may be eligible for a reverse mortgage) to 64 years of age now represent 20% of the prospective borrowers, which the author thinks may be attributable to the multiple and re-occurring television ads that star celebrities. The author, however, wants everyone to beware of reverse mortgage pitfalls, by taking a reverse mortgage too early in life.
“A reverse mortgage is a loan that allows a homeowner to convert home equity into cash. No repayments are due as long as you live in the house. When you leave it—normally, at death or because you choose to move, say, to assisted living—the house is usually sold.” The sale proceeds then are applied towards repayment of the loan, plus all fees and interest. Any money left over (a big ‘if’) goes to you or your heirs. If you are a married person and decide to take a reverse mortgage, you will want to make sure that both you and your spouse are on the loan, so the surviving spouse may continue to live in the house.
To learn more about reverse mortgages and to know all of your rights, go to hud.gov and search “reverse mortgage” in the search box.
Tuesday, January 31st, 2012
The article titled “New refinancing programs finally have begun”, written by Robert Nusgart and published in The Daily Record, provides useful information on new programs for refinances. “Lenders started rolling out Fannie Mae and Freddie Mac’s Home Affordable Program [(HARP)] (Part 2)” on December 1, 2011. This HARP program now allows homeowners who owe more on their mortgage than the value of their home to refinance, no matter how much equity they have lost in their home. This program only applies to loans that were originated with and/or purchased by Fannie Mae or Freddie Mac before June 1, 2009.
One may find out whether his/her loan is owned or guaranteed by Fannie Mae or Freddie Mac by visiting both company’s websites at www.freddiemac.com/mymortgage and www.fanniemae.com/loanlookup.
The author of this article, Robert Nusgart, has a website that provides additional mortgage information and news, and can be found here.
Monday, August 15th, 2011
According to the article titled “One million homeowners may get mortgage writedowns: U.S.”, written by Margaret Chadbourn and Aruna Viswanatha, U.S Housing and Urban Development Secretary Shaun Donovan stated that “[a]bout one million American homeowners would get writedowns in the size of their mortgages under a proposed deal with banks over shady foreclosure practices.” The proposed deal would be agreed upon within weeks.
“In exchange for between $20 billion to $25 billion in relief to distressed homeowners, the banks – Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Citigroup, and Ally Financial Inc. – will put behind them potential government lawsuits against improper foreclosures and abuses in originating and servicing the loans.” In other words, this settlement could mean that each of the one million borrowers could receive approximately a $20,000 reduction.
This settlement, however, would not apply to mortgages owned by Fannie Mae or Freddie Mac. But, nevertheless, this settlement may provide useful ideas and alternatives to Fannie Mae and Freddie Mac.
To read more of this article, please click here.
Tuesday, July 26th, 2011
If you are having issues with your mortgage company, sometimes it is not easy to know who or where you should turn to for answers or to file a complaint. In Dan Krell’s article titled “Many have mortgage complaints to file”, he introduces the public to the newly created Consumer Financial Protection Bureau (http://www.consumerfinance.gov) (which recently went into effect). The Bureau does not only regulate the mortgage industry; it also regulates the credit card industry, etc. “It’s akin to a one-stop shop for consumer protection.” If you need help now, try going to the Bureau’s “Get Help Now” webpage at http://www.consumerfinance.gov/get-help-now/.
If you use the Bureau in the future, please let us know how responsive the Bureau was, if they solved your problem, etc. As the Bureau’s functions recently went into effect, I am curious to hear your feedback!
Thursday, May 12th, 2011
You own a house. You want to plan for your retirement. What are your options? According to Jane Bryant Quinn, author of “Picking the Right Options” which was published in the May 2011 edition of AARP Bulletin, there are many options. These options are the following:
- Prepay your mortgage: If you prepay your mortgage, it will cut your living expenses in retirement should you suddenly need money or your housing plans change.
- Refinance: If you have trouble paying your monthly mortgage expenses, you can try to refinance your house by taking out a new 30-year loan.
- Sell and buy something smaller: If your house is too big or too expensive to upkeep, then you may want to sell your house and buy a smaller house. You should put the remainder of the sale proceeds into investments.
- Sell and rent: If your house is too big, too expensive, or if you no longer want to own a house, then you may want to sell your house and rent a house or an apartment. This option may give you more financial freedom because there are also no home upkeep costs.
- Stay put and take a reverse mortgage: “Here, you borrow against your home equity and don’t have to repay until your home is sold. If it sells for less than the loan against it, the lender swallows the loss. Lenders have slashed upfront costs. For further information about reverse mortgage loans, go to aarp.org/revmort. Jane Bryant Quinn suggest that you have a better shot at retaining some equity in your home if you take the loan in the form of a credit line, and borrow only what you need each month. Jane Bryant Quinn also suggests that you should not take a reverse mortgage out in your 60s; you should save a reverse mortgage as a last resort and in your older years.
- Walk away: If you can no longer afford your house and cannot sell your house to pay back your mortgage, you may want to walk away from your house and rent. Discuss your options with a bankruptcy attorney.
- Go RV-ing: Sell your house, buy an RV, and travel the United States in your RV.
- Retire near friends: “This is especially important for single people—widows, widowers, the never-married. You lose your ‘work family’ when you retire. You’ll need long-time friends to keep you company in older age.”
- Retire separately but together: If you and your spouse have different ideas of retirement (i.e., you want a rustic cabin in the woods and your spouse wants an urban high rise), you can do both. “Yes, you can do it and reunite—in cabin or city—in the end.”
Monday, April 25th, 2011
According to the article titled “Fannie, Freddie align servicing guidelines for delinquent mortgages”, written by Jon Prior and published in Housing Wire, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac “to align their guidelines for servicing delinquent mortgages.” These new alignments direct Fannie Mae and Freddie Mac to engage the borrowers as soon as they become delinquent on their mortgages. Therefore, the “foreclosure process cannot begin if the borrower and servicer are working toward solving the delinquency in a good-faith effort…”
The CEOs of both Fannie Mae and Freddie Mac believe that this new FHFA action will be beneficial to the servicers and borrowers, allowing earlier, effective, and more frequent communications. According to Ed Haldeman, CEO of Freddie Mac, this initiative “…‘will simplify the process for seeking help by giving borrowers one application to fill out and servicers one application to review for all Freddie Mac loan modifications and foreclosure alternatives.’”
To read the article in its entirety, please click here.
Tuesday, April 12th, 2011
Unfortunately, there are a significant number of short sales and/or foreclosures in the State of Maryland as stated in our previous blog post titled “Care for foreclosed homes in Maryland”. Many people wonder what the effect of late mortgage payments, short sales, and/or foreclosures have on their credit scores and the estimated time for their credit scores to recover. Please see the answers/helpful tables from FICO by clicking here. One of FICO’s interesting findings is the following: “There’s no significant difference in score impact between short sale/deed-in-lieu/settlement and foreclosure.”
To read all of FICO’s findings, please click here.
Tuesday, December 28th, 2010
The article titled “Md. bill would make banks care for foreclosed homes”, written by Liz Farmer and published in the March 13, 2011 edition of The Washington Examiner, explains a proposed bill that focuses on care for all foreclosures. The bill, recently introduced by delegates from Prince George’s and Charles counties, “would require banks and investment companies that repossess or foreclose on a home to pay for maintaining and securing the property, a measure just as much about safety as it is appearance”.
In January 2011, more than 700 homes in Prince George’s County went into foreclosure; this amount is nearly five times the total amount of homes that are foreclosed on in Montgomery County. The more than 4,000 foreclosed homes in Prince George’s County account for nearly one-third of the State of Maryland’s total. Prince George’s County has the highest foreclosure rate in Maryland, followed by Dorchester and Charles counties.
Foreclosures depreciate a neighborhood’s property value; neglected properties only “exacerbate the problem.” “‘When foreclosures…are vacant or abandoned, those properties are not kept up or maintained, so it not only pulls down the value when it’s finally sold, but also the perceived value when someone drives through the neighborhood,’ Daren Blomquist, spokesman for the foreclosure tracking firm Realty Trac”, explained.
The proposed bill “would authorize localities to pass laws requiring lenders to register their repossessed properties with the city or county and establishing fines for those who violate the maintenance requirements.”
The delegates who proposed this bill explain that they are not putting fault on banks and investment companies, but they are holding such banks and investment companies accountable to the same standard a homeowners’ association would be.
To read the article in its entirety, please click here.
Wednesday, October 20th, 2010
To learn more about loan modifications, please read the memorandum that Lynn Caudle Boynton, Esquire, with Olde Key Title, wrote. This memorandum outlines the basics, steps, and specifics of the loan modification process–a process which many do not fully understand how to begin.
If there are any topics you would like Olde Key Title to research and write about in the New Year, please let us know by leaving us a comment. Happy New Year!
Mortgage loans are supposed to be modified more than ever before in an effort to help consumers avoid foreclosure. The goal is to assist consumers, who through no fault of their own, due to deflation of their home value, to remain in their homes, which would help to stabilize the overall home market which effects everyone. Further, the goal is to ease tight credit and improve the flow of credit and increase the borrowing authority of the FDIC and NCUA (National Credit Union Association). The benefits offered to consumers and lenders are tempered by consumer protection and fraud prevention provisions enforced by the National Mortgage Fraud Task Force in the Department of Justice.
Modification of a homeowner’s original loan terms includes reducing the rate as low as 2%, fixing an adjustable rate, increasing the term up to 40 years and even reducing the principal balance.
Typically, modifications made the terms more favorable but added on any unpaid principal, interest and penalties to a consumers mortgage balance, essentially causing the property to be even more “underwater”. More recently, lenders are implementing a home retention program which includes an “earned principal forgiveness” of up to 30% of the loan balance to reward a consumer for living up to the modification terms. Unfortunately, the lenders lack the processes or staff to efficiently handle the loan modification applications. The idea of modification is talked about more than it is being implemented.
To read more about loan modification resources, eligibility, etc. please click here. Olde Key Title provides a number of additional resources on our website; you can find such resources by clicking here.