Posts Tagged ‘Mortgage loan’

Everything You Need to Know About Foreclosure Listings

If you are thinking of purchasing a new residential property or home to live in, then you might want to take a look at your local foreclosure listings through your local directory, or through the internet, such as www.carolpefley.com. Foreclosure is technically known as the legal process wherein an owner’s right to his property is terminated. The most common reason for this is default and other terms and agreements stated in his contract. These properties that undergo a foreclosure are usually sold at public auction. These properties are instantly added to the foreclosure listings of your city or town, the proceeds of which are given and applied to the mortgage debt that the previous owner owed; that is why these foreclosed houses and properties sell quite fast.

You may search for some of these foreclosure listings online at www.carolpefley.com that cater to these foreclosed homes and properties. It is important to know and to understand that the house was put up for sale, being a foreclosed home, because the previous homeowner was not able to pay the mortgage fees imposed on his home. Given this situation, the lender, of course, takes back his property, seeing that he cannot benefit from it. There are various legal steps also that are involved in this sort of dealing and they vary through different states.

When purchasing a home or residential property from the foreclosure listings, there are some steps that you should do before deciding on which one to buy. First, you might want to consider an investigation and thorough search of the advantages of purchasing a foreclosed home. Since there is an urgent need for the bank or lender to recover their investment as soon as possible, foreclosed homes are often sold at huge discounts.

When shopping for homes in foreclosure listings, consider an agent such as myself, at Realty World Platinum who is experienced with the job. This is important because there are some sellers who won’t allow a sale from buyers who are unrepresented. 

Written by Carol Pefley

www.carolpefley.com

Lastly, make sure to check the house for any damages and the like. Do not forget to look for foreclosure listings on www.rwplatinum.com. It would also be a good idea to ask if there are any bargaining opportunities that can save you money as well. There is also a lot of paperwork involved, so get ready for that.

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Bankrupt Bay Area homeowners shed second mortgages

By Pete Carey
pcarey@mercurynews.com

Posted: 05/09/2011 09:10:53 AM PDT
Updated: 05/09/2011 03:13:28 PM PDT
Stung by the crash of the housing market, some struggling homeowners are using a little known but increasingly popular provision of the bankruptcy code to eliminate second mortgages and avoid foreclosure.

Statistics are hard to come by, but bankruptcy lawyers say the provision has been used effectively on hundreds, if not thousands, of cases in the Bay Area during the past two years.

“It’s a big thing in our valley,” said James “Ike” Shulman, a San Jose bankruptcy lawyer. “But it’s not widely known.”

Shulman, co-founder of the National Association of Consumer Bankruptcy Attorneys, said he has helped a number of clients who have filed for personal bankruptcy use the law to hold on to their houses — including three last week.

Cathy Moran, a Mountain View bankruptcy lawyer, said one of her clients had a $132,000 second mortgage voided by the court.

“This is a really big-ticket issue that allows people to keep a home and conform the mortgage to something closer to real value,” Moran said.

Bankruptcy laws prevent homeowners from eliminating the debt of a first mortgage if they plan to stay in their home. But second mortgages are treated differently. They can be declared unsecured debt when there is no equity to cover them, as is the case for millions of houses that are now worth far less than a few years ago.

When that happens in a personal bankruptcy proceeding, the second mortgage is put on hold and no payments

are required while the homeowner completes a repayment plan for other debts — which typically takes three to five years. At that point, the second mortgage is eliminated.

Many of these second mortgages were granted during the housing bubble, when home prices were going in one direction only — up, up and up.

“A lot of these are loans that shouldn’t have been made at all,” said Henry Sommer, editor of Collier on Bankruptcy, a publication on bankruptcy law.

One of Shulman’s clients, Veronica — who asked that her full name not be used — was struggling to keep the San Jose house she bought in 2005 for $612,000.

Her home’s value has dropped to about $367,000 — less than her first mortgage of $489,000 — which allowed her to petition the bankruptcy court to set aside her $122,000 second mortgage. The court granted her motion.

She successfully completed her payment plan for other debts two months ago, and her second mortgage is now eliminated.

“It’s wonderful,” she said. “After almost six years, I am finally able to see the light at the end of the tunnel and I’m so, so grateful.”

Mortgage bankers don’t like the practice.

It’s “a troublesome phenomenon. It’s one of those things that’s just now developing and bubbling up,” said Dustin Hobbs, spokesman for the California Mortgage Bankers Association. But there is little the mortgage industry can do, aside from seeking to change the law. That could be difficult given the current partisan lineup in Washington.

And there are no complaints from investors in first mortgages, like the pension and retirement funds represented by the Association of Mortgage Investors. “We think with the right controls, something like this to allow a responsible, distressed homeowner to reorganize their assets, liabilities and cash flows is a very pro-business proposition,” said Chris Katopis, the association’s executive director. “We disagree with what the mortgage bankers associations are saying on this.”

The law has been like this for years, bankruptcy lawyers say. It’s just never been used as much because in the past there was usually enough equity in a home to cover the second mortgage.

“We’re having great results” using the rule, said Brette Evans, a San Jose bankruptcy lawyer. In one recent case, a small-business owner was able to hang on to her home by setting aside a $240,000 second mortgage, she said.

That put the borrower in “a safe zone” where she could work out a modification of her first mortgage, Evans said.

Contact Pete Carey at 408-920-5419.

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Home buyers lack mortgage know-how

 

A new survey indicates that home buyers are ill-prepared to take out a mortgage, answering basic

questions about mortgage information incorrectly nearly half (46 percent) of the time, according to a

Zillow Mortgage Marketplace.

MAKING SENSE OF THE STORY

statements, including “The rates of 5/1 adjustable-rates mortgages always increase after years.”

Although the correct answer is false, because 5/1 ARMs do adjust after five years, but the rates

could go up or down, 57 percent of people surveyed answered this question incorrectly.

More than 1,000 home buyers were asked to respond true or false to eight mortgage-related

always buy mortgage discount points. The fact is, the decision hinges on how long the borrower

plans to own the property, and in some situations, buying mortgage discount points is not

worthwhile.

Forty-five percent of home buyers surveyed also incorrectly stated that home buyers should

by lender, incorrectly thinking lenders are required by law to charge the same fees for credit

reports and appraisals.

An additional one-third of respondents do not understand that lender fees are negotiable and vary

financing. With a pre-qualification, which is the earliest step in the mortgage process when a

lender approximates the amount the borrower can afford, the lender does not run the borrower’s

credit or request any documentation to verify the information provided by the borrower.

Survey respondents also believe that pre-qualifying for a loan means they have secured

Housing Administration (FHA) loans are available to all buyers, but instead believe only first-time

buyers qualify. In reality, FHA loans can cost less for many buyers, including repeat buyers with

low to average credit scores and with down payments of less than 20 percent.

Read the full story

Slightly less than half of the polled prospective home buyers also do not understand that Federal

http://bit.ly/mOIjsw

 

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Mortgage rates: Average on 30-year fixed loans rises to 4.86%

By Janna Herron

Associated Press

Posted: 03/31/2011 08:08:04 AM PDT

Updated: 03/31/2011 09:07:11 AM PDT

 

NEW YORK — Fixed mortgage rates rose slightly this week, but the average rate on the 30-year loan remained below 5 percent.

Freddie Mac says the average rate on the 30-year fixed mortgage rose to 4.86 percent from 4.81 percent the previous week. It hit a 40-year low of 4.17 percent in November.

The average rate on the 15-year fixed mortgage increased to 4.09 percent from 4.04 percent. It reached 3.57 percent in November, the lowest level on records dating back to 1991.

Mortgage rates tend to track the yield on the 10-year Treasury note, which rose this week. Investors sold off Treasurys on fears the Federal Reserve might end its bond-buying program sooner than expected.

Low rates have done little to jumpstart the weak housing market. Home sales remain sluggish and prices are falling in most major markets. Most analysts expect prices to decline through midyear.

More Americans did sign contracts to buy homes last month, the National Association of Realtors said Monday. But there was “a measurable level of contract cancellations” in February, meaning many pending sales might not translate into closed sales.

In another dismal sign, Lennar said Tuesday that new orders dropped 12 percent from December through February, while home deliveries slipped 3 percent.

High unemployment and strict lending requirements have kept many people from buying homes. And a record number of foreclosures are forcing down home prices, leaving many would-be buyers worried that the market has yet to bottom out.

To calculate average mortgage rates, Freddie Mac collects rates from lenders across the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a single day.

The average rate on a five-year adjustable-rate mortgage rose to 3.70 percent from 3.62 percent. The five-year hit 3.25 percent last month, the lowest rate on records dating back to January 2005.

The average rate on one-year adjustable-rate home loans increased to 3.26 percent from 3.21 percent. Two weeks ago, the rate hit 3.17 percent, the lowest level in records dating starting in 1984.

The rates do not include add-on fees, known as points. One point is equal to 1 percent of the total loan amount. The average fee for the 30-year fixed loan, 15-year fixed loan and the five-year ARM in Freddie Mac’s survey was 0.7 point. The average fee for the 1-year ARM was 0.6 point.
 

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Mortgage mod test becomes clearer

Mortgage borrowers who are turned down for loan modifications may now get additional information that could help them understand why they didn’t qualify under the so-called “HAMP test.”

Read the full story

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