Skip to main content

Category Archives: Mortgages

How Will the New Flood Insurance Bill Impact You?

Flood Insurance is at Risk

 

How Will the New Flood Insurance Bill Impact You?

 

The National Flood Insurance Program, which was created in the late 1960’s to help facilitate more private insurance options, is going to expire on September 30th, 2017. Congress has recently introduced the “21st Century Flood Reform Act” that will allow flood insurance policies to go uninterrupted through the middle of Florida’s 2017 hurricane season.

 

The catch? The bill has to be passed and signed by the president before September 30th.

 

What This Means For The Homeowner

 

According to Florida Realtors, Florida represents 40% of NFIP nationally. If you are a homeowner in a flood zone in the Tampa Bay area this could be troublesome as congress has merely only introduced the bill needed to keep flood insurance afloat and hurricane season will not end until November.

 

Further, if you are looking to buy or sell your home, closing will be tough. Florida realtors states “Mortgage lenders require proof of property insurance before they will lend money at closing, and they require proof of flood insurance if a property is located within a FEMA-designated flood zone. If home buyers can’t secure proof of flood coverage, their closing could be cancelled or delayed.”

 

What You Can Do

 

Call or email your congress representative and ask them to push a long the bill, or pass an extension so flood insurance is not disrupted. You can easily find contact information for your representative here.

 

 

 

Dos and Don'ts of Getting a Mortgage

Dos and Don’ts of Getting a Mortgage

 

You want to buy a home. Now what? Here are some simple dos and don’ts of getting a mortgage that can help you throughout the home buying process. For more home buying tips you can check out our guide here. And when you’re ready to splash into the wonderful world of home ownership, use our custom home search to help you find it easily. Want more information on mortgages? Contact Adam Karol or John Fenech at Sunbelt Lending.

 

Dos and Don'ts of Getting a Mortgage

3% downpayment loans are back! 620 credit scores or above

A new program from Wells Fargo & Co. promises to make it easier for prospective borrowers to apply and qualify for a low downpayment residential loan.

Borrowers who use the yourFirst Mortgage program can purchase a home with a downpayment as low as 3 percent, an announcement Thursday indicated.

The San Francisco-based company said the program is intended to help first-time homebuyers and low- to moderate-income consumers become homeowners.

Fannie Mae is acting as a partner in the program.

According to Wells Fargo, the program features fixed interest rates. Prospective borrowers with less than 10 percent down can earn an interest rate reduction of 12.5 basis points by completing a homebuyer education course.

Expanded credit criteria include nontraditional sources like tuition, rent and utility bill payments.

The loan is fully documented and underwritten, and income from others who will reside in the subject property – such as family members or renters – can be considered for debt-to-income ratio calculations.

Downpayments and closing costs can come from gifts and downpayment assistance programs.

“yourFirst Mortgage is a conventional loan that avoids the complexities associated with loan applications for previous affordable lending programs,” the news release stated.

“There are a lot of conventional loan products with low downpayment options, but the criteria are so complex that it creates barriers for many qualified borrowers,” Wells Fargo Home Lending Executive Vice President Brad Blackwell said in the statement. “With yourFirst Mortgage, we wanted to provide access to credit and simplify the experience while maintaining responsible lending practices.”

Copyright © 2016 Mortgage Daily, Distributed by Tribune Content Agency, LLC

Signs Florida Real Estate is on the Mend

Florida Real Estate From the early- to mid-2000’s Florida was known not only for its hot weather, but also as a hot spot for real estate. Banks were fast and loose with mortgage approval and interest rates were rock bottom. Meanwhile, home ownership was on the rise nationwide and it was entirely centered on America’s southeast peninsula.

 
Banks were approving mortgages left and right. Some applications were even referred to as ‘no-paper approvals,’ meaning there was no requirement for proof of income. So banks were approving $250,000 loans for some borrowers who didn’t even have to prove they had the means to pay for it. Mortgage approvals were being rolled out quicker than ever and it gave the illusion there was positive consumer confidence and skyrocketing buying power.

 
From coast to coast everything was coming up roses, until the loans caught up with the lenders. Accounting for Murphy’s Law, mortgage holders began defaulting on their loans; some right after they were approved and some after a couple months. Regardless, all the bad loans began catching up with the banks in 2008. Throughout the year, subprime lenders would buy the bad loans and the papers would be shuffled. But in the end, it all came out in the wash.

 
By the fall of 2008, bending lenders began breaking. The most prolific of which was Lehman Brothers, a global financial services firm forced to declare chapter 11 bankruptcy and liquidate its assets in the fall. Being the first domino to fall, the rest of the lending institutions soon followed. In order to avoid complete financial ruin, however, the government was forced to use tax payer dollars to ‘bail out’ most lending institutions.

 
But all the bail-outs in the world couldn’t change the fact subprime borrowers were holding these mortgages. And a good chunk of the inventory these borrowers were holding mortgages on were housing in Florida. Subsequently, statewide, there was a glut of inventory on the market to drive down demand and prices. The only thing driven up was the number of vacant houses and negative equity.

 
It’s been a long, bumpy road since the financial collapse of 2008. From the collapse has come much more affordable real estate, making the Florida market extremely active. As of January, 2015, housing inventory has stayed below the typical norm of six month supply and homes are selling quickly. Prices have stabilized but are still affordable, and with the increase in demand, steady demand for real estate in Florida, price increases should be expected as long as there is not a huge spike in inventory.

MI Tax Deductibility is Back!

It’s official! The recent “fiscal cliff” legislation means MI premiums are tax deductible for premiums paid on home mortgages through December 31, 2013, retroactive for 2012 (deductibility was previously allowed to expire on December 31, 2011).

This means there’s no interruption in MI tax deductibility through December 31, 2013. With tax deductibility renewed for MI, there’s never been a better time to take a closer look at mortgage insurance. MI tax deductibility is one more reason to choose traditional options for housing finance. Not only is MI tax deductible, it can also be cancelled when it meets investor conditions.

Buying tips

Buying Tip: when I show property to clients one of the 1st things I look at when we arrive is the roof! In today’s market where insurance in Florida is so hard to obtain and expensive. A newer roof can save you hundreds of dollars a year.

If you buy a home with a new or newer (2002 on) it should have been in stalled with new nails and maybe special clips and a secondary waterproof barrier.

The second reason I look at the roof is quite often homes build in the 60’s and 70’s had tile roofs. Looking at the homes in the area if you see 50% of them have shingle roofs it could be a strong indication that the roof is at the end of its life. If that’s the case you maybe unable to get insurance. Insurance companies want to see at leased 3 years of life remaining.

Updated mortgage-aid program aims to pick up slack

PHILADELPHIA – April 5, 2012 – After months in the works, HARP 2.0 is available to Fannie Mae and Freddie Mac borrowers who want to refinance but owe more on their mortgages than their houses now are worth.

HARP 2.0 – HARP stands for Home Affordable Refinance Program – is being billed as an improvement over the three-year-old version that just about everyone acknowledges didn’t help anyone.

The reason for that failure: The original program had limits on loan-to-value ratio, the amount of a mortgage as a percentage of the appraised value of a property. If the balance of a mortgage exceeded the appraised value – say, $300,000 versus $150,000 – the borrower wasn’t allowed to refinance.

Recognizing that none of the borrowers the program was intended to help would be able to qualify, the limits were dropped when the new version of HARP was heralded in October.

Does that mean all lenders have agreed to no limits?

“I have lenders that have limited the loan-to-values. Some have even differentiated between attached and detached homes,” said Philadelphia mortgage broker Fred Glick, who has launched a blog, http://harp2.com, to update consumers. “They still are limiting what they will do” with loan-to-value ratios of 150 percent and no more.

“All in all, it is a great way to get people’s rates down in spite of low values,” Glick said. “This will decrease the supply of homes for sale and increase values over the long run.”

As with all these programs, the months since HARP 2.0 was announced have been spent trying to get lenders on board – no easy task since Fannie and Freddie loans are pooled as mortgage-backed securities that are owned by many investors. All the investors need to agree before borrowers can apply to reduce monthly payments to today’s low fixed interest rates, which remained under 4 percent for many months but now are beginning to increase as bond yields rise in an apparently improving economy.

As of March 17, HARP 2.0 has been in place to help keep homeowners above water. About four million Fannie Mae and Freddie Mac borrowers nationwide owe more on their mortgages than their homes are worth.

The government has a website, http://www.makinghomeaffordable.gov, (link) that has details about HARP 2.0 and other information.

Underwater loans might also be eligible to refinance under provisions of the recent National Mortgage Settlement. That applies to loans neither owned by Freddie or Fannie nor insured by the Federal Housing Administration, which has its own streamlined refinancing under a program announced in January. Details of that settlement are being worked out, and eligible borrowers will be notified by the five participating lenders – Wells Fargo, Bank of America, JPMorgan Chase, Ally Financial, and Citibank – at some point.

To be eligible for HARP, homeowners must be current on their mortgage. That means paid in full up to date, with no late payments in the past six months and only one in the past 12. They also need to show that they can afford the new payments gained through refinancing without any trouble.

Borrowers must have closed on their current mortgage on or before May 31, 2009, and cannot have refinanced through HARP before. In addition, mortgages must fall under current “conforming-loan limits,” which vary by region.

One thing both Fannie and Freddie want to see is whether borrowers refinance to loans with terms shorter than 30 years. They call this “movement to a more stable product.”

Borrowers with an interest-only loan will be urged to refinance to a mortgage product that provides amortization of principal and accumulation of equity in the property.

Those who have an adjustable-rate mortgage will be encouraged to refinance to a fixed-rate loan that eliminates the potential for payment shock, or to an adjustable with an initial fixed period of five years or more and equal to or greater than the existing mortgage.

Homeowners with a 30-year fixed-rate mortgage will be advised to refinance to a 15-, 20- or 25-year fixed that offers, in Fannie Mae’s words, accelerated amortization of principal and equity building. But borrowers won’t be allowed to cash out equity under this refinancing “except for closing costs and certain allowances to cover items such as association fees, property tax bills, insurance costs and rounding adjustments.”

Plus, borrowers may not satisfy subordinate financing in the form of a home-equity line of credit or a closed-end second mortgage with the proceeds of the refinance mortgage.

Balloon mortgages and convertible adjustable-rate mortgages are eligible for HARP 2.0 if the conditional right to refinance the balloon or convert the ARM was exercised by the borrower and “redelivered” to Fannie Mae before June 1, 2009.

Resources

• To determine whether Fannie Mae or Freddie Mac owns your mortgage, check at http://fanniemae.com/loanlookup and http://freddiemac.com/mymortgage.

• To access Fannie Mae’s frequently asked questions file, go to http://goo.gl/pN54x.

• Many of the rules and regulations outlined in the latest information from Fannie and Freddie are far beyond the understanding of the typical homeowner, and, as the government warns, scam artists are already hovering above borrowers, waiting to pounce. For information about mortgage-assistance-relief scams, visit http://FTC.gov.

• Some underwater homeowners will qualify for assistance under the Mortgage Settlement. The Center for Responsible Lending has a downloadable consumer’s guide for that program at http://goo.gl/2FZKM.

Copyright © 2012 The Philadelphia Inquirer. Distributed by MCT Information Services.

xvideos

New rules aim to simplify refinancing for troubled homeowners

If you are a troubled homeowner hoping to refinance, pay attention next Tuesday as details come out on a new federal program that could make it easier starting in late December or early in 2012.

In the meantime, be sure you keep up with your mortgage payments so that you can qualify for the new deal.

Even if you missed payments in the past, it can help to be current going forward, said Kathy Conley, housing specialist for GreenPath Debt Solutions in Farmington Hills.

The revised Home Affordability Refinance Program (HARP) could apply to a broader base of people.

If, for instance, you owe $100,000 on a house that would appraise at just $50,000 – too deep underwater for a conventional refinancing – you might be able to refinance under the new HARP. That was not true under the old HARP, launched in 2009, which had a 125 percent maximum on loan-to-value ratio.

The new plan is expected be a big help for many homeowners in states that have been hard hit by drastic drops in home values, such as Michigan, Florida, California, Arizona and Nevada, according to Greg McBride, senior analyst for Bankrate.com.

Seeing mortgage rates hover near record lows – around 4.23 percent for a 30-year fixed and 3.48 percent for a 15-year – has many folks wondering whether it’s time to refinance.

In this tough housing market, what do you need to know? How can you save money by refinancing and make those low rates work for you?

Even with interest rates low and a revised federal program coming, refinancing is not for everybody who wants – or needs – a better deal on their home and some extra cash.

Some homeowners could face surprising hurdles, even if they’re not underwater and are current on payments.

“Everybody who is really hurting – and everybody who needs the help – can’t take advantage of the rates,” said Kip Kirkpatrick, CEO of Shore Mortgage Services in Birmingham, Mich.

What’s your credit score? How solid is your income? Got a lot of debt?

To refinance, the borrower needs a predictable level of recurring income – so such things as pension income would count, as would Social Security, your regular paychecks, alimony if expected to last three years or more, and interest on investments.

“You will need to provide a full accounting of your income,” said Bob Walters, chief economist for Quicken Loans in Detroit.

Lenders are going to look at how much money you owe on the mortgage and other loans relative to what you’re making.

“A reduction in income can lead to a higher ratio of debt payments to monthly income,” said Greg McBride, senior analyst for Bankrate.com. “A high debt-to-income ratio makes lenders nervous. The borrower is just one unplanned expense away from problems.”

As a general rule, it becomes more difficult – but not impossible – to qualify for a mortgage or refinance when a person’s total debt – to income ratio exceeds 40 percent to 45 percent, Walters said.

Your credit score counts. Lenders generally want a FICO of 680 or higher to qualify for the best rates in a conventional mortgage. A FICO of 620 tends to be the cutoff that often defines who can, and who can’t, get a mortgage.

Walters noted that there are exceptions to the 620 cutoff, especially when utilizing Federal Housing Administration programs with some lenders.

Credit scores also could have more wiggle room under the new federal Home Affordable Refinance Program. Gerri Detweiler, personal finance expert for Credit.com, said consumers who are in the process of a refinancing don’t want to go out and borrow money to get new furniture, buy a car or even get holiday gifts. Lenders are likely to look at your credit even the day before or the day of closing on that new mortgage, Detweiler said.

“If you’ve done something stupid with your credit, you could lose the loan,” she said.

So what if the house you bought for $280,000 and mortgaged for $260,000 is now worth $150,000?

Right now, you can’t do a thing with it.

For a conventional refinancing, the lender wants at most an 80 percent loan-to-value ratio. So if your home is worth $100,000 and you owe $70,000, you could qualify.

The new HARP 2.0 plan is going to address the underwater mortgage issue further.

“Anybody who thinks they’re underwater, I would say just hold off until the new program comes out,” said Brian Seibert, president of Watson Group Financial, a mortgage banker in Waterford, Mich.

The old HARP program had a maximum 125 percent loan-to-value ratio. But that cap is removed under the new plan.

“It’s easier to refinance through HARP than a conventional refinance,” Conley said.

But remember to stay current with mortgage payments.

Under HARP 2.0, the borrower would have to be current with the mortgage payment for the past six months and have no more than one late payment in the past 12. But Conley and others recommend that even if you were late in the past, you can try to be current now if you want to try to qualify for HARP 2.0.

“Definitely don’t skip the mortgage payment so you can go Christmas shopping,” Detweiler said.

Though the old HARP promised far more than it delivered – fewer than 900,000 refinancings and just 72,000 of them underwater – experts say consumers should avoid being discouraged. The revised program, which will run through 2013, could be an improvement.

The program would lower payments but would not reduce principal, so borrowers would still hold mortgages for more than their homes are worth. But they could avoid foreclosure.

Consumers who want to refinance should prepare paperwork, keep up payments, consider the new option and avoid the desire to give up.

“You feel the frustration that people have,” McBride said, “but sitting back and doing nothing is not going to solve the problem.”

A guide to administration’s new mortgage-refi plan

WASHINGTON – Oct. 25, 2011 – Two big questions loom over the Obama administration’s latest bid to help troubled homeowners: Will it work? And who would benefit?

By easing eligibility rules, the administration hopes 1 million more homeowners will qualify for its refinancing program and lower their mortgage payments – twice the number who have already. The program has helped only a fraction of the number the administration had envisioned.

In part, that’s because many homeowners who would like to refinance can’t, because they owe more on their mortgage than their home is worth. But it’s also because banks are under no obligation to refinance a mortgage they hold – a limitation that won’t change under the new plan.

Here are some of the major questions and answers about the administration’s initiative:

Q: What is the program?

A. The Home Affordable Refinance Program, or HARP, was started in 2009. It lets homeowners refinance their mortgages at lower rates. Borrowers can bypass the usual requirement of having at least 20 percent equity in their home. But few people have signed up. Many “underwater” borrowers – those who owe more than their homes are worth – couldn’t qualify under the program. Roughly 22.5 percent of U.S. homeowners, about 11 million, are underwater, according to CoreLogic, a real estate data firm. As of Aug. 31, fewer than 900,000 homeowners, and just 72,000 underwater homeowners, have refinanced through the administration’s program. The administration had estimated that the program would help 4 million to 5 million homeowners.

Q. Why did so few benefit?

A. Mainly because those who’d lost the most in their homes weren’t eligible. Participation was limited to those whose home values were no more than 25 percent below what they owed their lender. That excluded roughly 10 percent of borrowers, CoreLogic says. In some hard-hit areas, borrowers have lost nearly 50 percent of their home’s value. Another problem: Homeowners must pay thousands in closing costs and appraisal fees to refinance. Typically, that adds up to 1 percent of the loan’s value – $2,000 in fees on a $200,000 loan. Sinking home prices also left many fearful that prices had yet to bottom. They didn’t want to throw good money after a depreciating asset. Or their credit scores were too low. Housing Secretary Shaun Donovan acknowledged that the program has “not reached the scale we had hoped.”

Q: What changes is the administration making?

A. Homeowners’ eligibility won’t be affected by how far their home’s value has fallen. And some fees for closing, title insurance and lien processing will be eliminated. So refinancing will be cheaper. The number of homeowners who need an appraisal will be reduced, saving more money. Some fees for those who refinance into a shorter-term mortgage will also be waived. Banks won’t have to buy back the mortgages from Fannie or Freddie, as they previously had to when dealing with some risky loans. That change will free many lenders to offer refinance loans. The program will also be extended 18 months, through 2013.

Q: Who’s eligible?

A. Those whose loans are owned or backed by Fannie Mae or Freddie Mac, which the government took control of three years ago. Fannie and Freddie own or guarantee about half of all U.S. mortgages – nearly 31 million loans. They buy loans from lenders, package them into bonds with a guarantee against default and sell them to investors. To qualify for refinancing, a loan must have been sold to Fannie and Freddie before June 2009. Homeowners can determine whether Fannie or Freddie owns their mortgage by going online: Freddie’s loan tool is at freddiemac.com/mymortgage; Fannie’s is at fanniemae.com/loanlookup. Mortgages that were refinanced over the past 2 1/2 years aren’t eligible. Homeowners must also be current on their mortgage. One late payment within six months, or more than one in the past year, would mean disqualification. Perhaps the biggest limitation on the program: It’s voluntary for lenders. A bank remains free to reject a refinancing even if a homeowner meets all requirements.

Q: Will it work?

A. For those who can qualify, the savings could be significant. If, for example, a homeowner with a $200,000 mortgage at 6 percent can refinance down to 4.5 percent, the savings would be $3,000 a year. But the benefit to the economy will likely be limited. Even homeowners who are eligible and who choose to refinance through the government program could opt to sock away their savings or pay down debt rather than spend it.

Q: How many homeowners will be eligible or will choose to participate?

A: Not entirely clear. The government estimates that up to 1 million more people could qualify. Moody’s Analytics says the figure could be as high as 1.6 million. Both figures are a fraction of the 11 million or more homeowners who are underwater, according to CoreLogic, a real estate data research firm.

Q: Who will benefit most?

A: Underwater homeowners in the hard-hit states of Arizona, California, Florida and Nevada could be greatly helped. Many are stuck with high mortgage rates after they were approved for mortgages with little or no money as a downpayment and few requirements. The average annual savings for a U.S. household would be $2,500, officials say.

Q: When will it start?

A: Fannie and Freddie will issue the full details of the plan lenders and servicers on Nov. 15, officials say. The revamped program could be in place for some lenders as early as Dec. 1.
Copyright © 2011 The Associated Press, Derek Kravitz, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

White House weighs mass refinancing plan

The White House is considering a housing proposal that would allow millions of homeowners with government-backed mortgages to refinance into lower interest rates, The New York Times reports.

“A wave of refinancing could be a strong stimulus to the economy, because it would lower consumers’ mortgage bills right away and allow them to spend elsewhere,” an article in The New York Times notes.

Many homeowners have been unable to take advantage of today’s low interest rates — which are averaging around 4 percent — because they don’t qualify for refinancing at the best rates since they owe more on their home than it is currently worth or because of poor credit. The refinancing plan is still under discussion of how it would work, The New York Times said.

“This is the best stimulus out there because it doesn’t increase the deficit, it accomplishes monetary policy, and it reduces defaults in housing,” Christopher J. Mayer, an economist at the Columbia Business School, told The New York Times.

The White House is also considering other options to try to stimulate the housing market or save homeowners from foreclosure. Such options include more changes to its refinancing programs so more homeowners can participate or a home rental program to that would rent out foreclosures instead of putting them for sale so foreclosures would stop weighing down overall home prices.

“This is just want this economy needs! I was just saying I would love to refinance my home but after talking to Wells Fargo I was told they couldn’t refinance my home because my loan to value wasn’t within tolerance. I was looking to refinance to a 15 year mortgage to take advantage of the low rates. I do hope this gets through the White House. I could see this as a huge plus for most Americans, putting $150-$200 a month or more in their pockets.”

movie2k