Selling Your Home in a Slumping Market
Read the whole story here: http://realtytimes.com/rtapages/20070824_slumpmarket.htm
If you find yourself having to sell into a slow market, here are some tips to help you make your home more attractive and sweeten the deal to generate more interest in your home:
· Price it to the market, don't be greedy.
· Obtain an appraisal in advance
· Use a seasoned Realtor
· Have your home professionally inspected
· Have your home professionally staged
· Be willing to pay closing costs for the purchaser, up to 6 percent
· Give your Realtor copies of all improvements to the home
· Make sure your Realtor is marketing your home on at least eight Internet sites
· Keep your home in ready-to-show condition at all times
· Focus on curb appeal and making a good first impression
Read the rest of the story:
http://realtytimes.com/rtapages/20070824_slumpmarket.htm
Monday, August 27, 2007
Friday, August 24, 2007
If you wait to get a mortgage~ You may not get one!
If you've been WAITING to purchase or refinance your home... DON'T!!! You may not get a mortgage if you WAIT:
http://usatoday.com/money/economy/housing/2007-08-05-mortgage-lenders_N.htm?imw=Y
http://usatoday.com/money/economy/housing/2007-08-05-mortgage-lenders_N.htm?imw=Y
While poor repayment of "subprime" loans to borrowers with blemished credit is the primary concern, there are a few signs that more blue-chip borrowers are also having problems paying their mortgages.
Lenders are quickly closing the door to borrowers with low credit scores, small down payments for a new home or little equity in their current homes.
Homeowners and buyers in high-cost areas such as California, Florida and the Northeast are also reeling as lenders chop "jumbo loan" programs.
Wednesday, August 22, 2007
Credit Crisis in Real Estate
Lynne RohdeMortgage Loan Consultant Security One Mortgage Corp. (407) 681-9800 x 104Fax: (407) 650-2921 LMRECO@aol.comhttp://www.securityonemortgage.com/lynnerohde
To date, subprime mortgages have been credited for bankrupting well over 110 lenders and seriously damaging operations at many major mortgage firms. They've reportedly wiped out 5 hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. And, as if that weren't enough, subprime mortgages are also blamed for massive volatility in the stock, bond, credit, futures, and real estate markets here in the US. And it's this volatility that is now spreading like a virus into other major financial sectors around the globe. This means that, for any American looking to buy, sell, or refinance their home, they are confronting a very different market from the one that existed just 6-12 months ago. The US Federal Reserve has already begun pumping billions of dollars into the US banking system in order to address what is clearly a credit crisis that will change how we borrow money for years to come!
The recent real estate boom was fueled by a period of record home appreciation and historically low interest rates. Banks, in order to compete, loosened guidelines and began offering more funding to more borrowers through riskier, non-conforming mortgages. These ideal lending conditions persisted for several years, supported by high demand, historical real estate data, home prices, and massive trading volume/profits on mortgage-backed securities and other financial instruments on Wall Street. Then, in 2006, a slowdown in real estate led to a deterioration of home values, an increase in inventories, and ultimately to today's tightening of credit guidelines, leaving many investors unable to sell or refinance out of their existing positions. Many Americans who had tapped into their equity were suddenly tapped-out and overextended as home values fell. Foreclosures followed in record numbers and a re-valuation of mortgage bonds and other financial instruments created the credit/liquidity domino effect we're now experiencing. Unfortunately, it's going to get a lot worse before it gets better. According to the latest estimates, over 2 million subprime and Alt-A adjustable rate mortgage (ARM) holders will face payment increases of up to 30%-100% when their loans reset in the next 2 to 18 months. These loans make up less than 40% of the total mortgage market, but the negative effects, as we have seen, of increased foreclosure activity can have a ripple effect throughout the industry and around the globe. What does this mean to you and your mortgage?
Sellers: If you're planning on selling your home, be prepared for an even smaller pool of qualified buyers. While some experts predict a settling of this credit crisis over the coming year, tightened credit guidelines and diminishing mortgage products could knock out as many as 15%-30% of potential qualified buyers. Now is not the time to sit and wait for the best possible price. Have a serious talk with your Real Estate Agent. Having experienced buying/selling transactions in your area, he or she can help you price your home accordingly. He or she can also help ensure that your buyers are pre-approved and stay pre-approved throughout the entire transaction.
Buyers: Get pre-approved by your mortgage professional. While there are a lot of great deals out there, getting credit is becoming tougher and tougher, and it's taking longer and longer to complete a transaction. Remember, what you qualify for today could change tomorrow in a volatile market. For those looking to refinance, keep this in mind. There is no time to delay! Communicate with your lender. Don't do anything that could negatively affect your credit, and make sure you get all your documentation in on time.
ARMs Borrowers: If your ARM is scheduled to reset in the next 2-18 months, you need to schedule an appointment with a mortgage professional right away. Whether your ARM is subprime, Alt-A, or even if you have a pre-payment penalty, don't let a default or foreclosure situation sneak up on you. Did you know that your monthly payments can increase anywhere from 30% to 100% once your loan resets? At the very least, give yourself the peace of mind of knowing what your adjusted payment will be. A good loan officer can help calculate the numbers.
Borrowers with less-than-perfect credit: Each week it seems lenders are shedding more and more mortgage products. Many lenders have stopped offering No-Doc loans and are reducing all forms of Stated-Income loans. While it might be challenging, borrowers with credit issues need to see a loan expert. Often they have credit repair resources and other strategies to help you reach your financial goals.
Finally, don't let the headlines get to you. While all looks bleak and scary now, there's an important concept to embrace: all markets, while cyclical in nature, are self-correcting, be it credit, real estate, stocks, or bonds. For the last 6 or 7 years, real estate was booming and riding high. The correction we're experiencing now – while it seems harsh and could get much worse – is, in a sense, "natural" and directly related to the extremely loose guidelines and perhaps overzealous lending and leveraging during the boom cycle. If you or someone you know would like to learn more about the credit crisis and how it could affect your financial goals, please call us at (407) 681-9800 x 104 to set up an appointment. We would be happy to speak with you about it!
To date, subprime mortgages have been credited for bankrupting well over 110 lenders and seriously damaging operations at many major mortgage firms. They've reportedly wiped out 5 hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. And, as if that weren't enough, subprime mortgages are also blamed for massive volatility in the stock, bond, credit, futures, and real estate markets here in the US. And it's this volatility that is now spreading like a virus into other major financial sectors around the globe. This means that, for any American looking to buy, sell, or refinance their home, they are confronting a very different market from the one that existed just 6-12 months ago. The US Federal Reserve has already begun pumping billions of dollars into the US banking system in order to address what is clearly a credit crisis that will change how we borrow money for years to come!
The recent real estate boom was fueled by a period of record home appreciation and historically low interest rates. Banks, in order to compete, loosened guidelines and began offering more funding to more borrowers through riskier, non-conforming mortgages. These ideal lending conditions persisted for several years, supported by high demand, historical real estate data, home prices, and massive trading volume/profits on mortgage-backed securities and other financial instruments on Wall Street. Then, in 2006, a slowdown in real estate led to a deterioration of home values, an increase in inventories, and ultimately to today's tightening of credit guidelines, leaving many investors unable to sell or refinance out of their existing positions. Many Americans who had tapped into their equity were suddenly tapped-out and overextended as home values fell. Foreclosures followed in record numbers and a re-valuation of mortgage bonds and other financial instruments created the credit/liquidity domino effect we're now experiencing. Unfortunately, it's going to get a lot worse before it gets better. According to the latest estimates, over 2 million subprime and Alt-A adjustable rate mortgage (ARM) holders will face payment increases of up to 30%-100% when their loans reset in the next 2 to 18 months. These loans make up less than 40% of the total mortgage market, but the negative effects, as we have seen, of increased foreclosure activity can have a ripple effect throughout the industry and around the globe. What does this mean to you and your mortgage?
Sellers: If you're planning on selling your home, be prepared for an even smaller pool of qualified buyers. While some experts predict a settling of this credit crisis over the coming year, tightened credit guidelines and diminishing mortgage products could knock out as many as 15%-30% of potential qualified buyers. Now is not the time to sit and wait for the best possible price. Have a serious talk with your Real Estate Agent. Having experienced buying/selling transactions in your area, he or she can help you price your home accordingly. He or she can also help ensure that your buyers are pre-approved and stay pre-approved throughout the entire transaction.
Buyers: Get pre-approved by your mortgage professional. While there are a lot of great deals out there, getting credit is becoming tougher and tougher, and it's taking longer and longer to complete a transaction. Remember, what you qualify for today could change tomorrow in a volatile market. For those looking to refinance, keep this in mind. There is no time to delay! Communicate with your lender. Don't do anything that could negatively affect your credit, and make sure you get all your documentation in on time.
ARMs Borrowers: If your ARM is scheduled to reset in the next 2-18 months, you need to schedule an appointment with a mortgage professional right away. Whether your ARM is subprime, Alt-A, or even if you have a pre-payment penalty, don't let a default or foreclosure situation sneak up on you. Did you know that your monthly payments can increase anywhere from 30% to 100% once your loan resets? At the very least, give yourself the peace of mind of knowing what your adjusted payment will be. A good loan officer can help calculate the numbers.
Borrowers with less-than-perfect credit: Each week it seems lenders are shedding more and more mortgage products. Many lenders have stopped offering No-Doc loans and are reducing all forms of Stated-Income loans. While it might be challenging, borrowers with credit issues need to see a loan expert. Often they have credit repair resources and other strategies to help you reach your financial goals.
Finally, don't let the headlines get to you. While all looks bleak and scary now, there's an important concept to embrace: all markets, while cyclical in nature, are self-correcting, be it credit, real estate, stocks, or bonds. For the last 6 or 7 years, real estate was booming and riding high. The correction we're experiencing now – while it seems harsh and could get much worse – is, in a sense, "natural" and directly related to the extremely loose guidelines and perhaps overzealous lending and leveraging during the boom cycle. If you or someone you know would like to learn more about the credit crisis and how it could affect your financial goals, please call us at (407) 681-9800 x 104 to set up an appointment. We would be happy to speak with you about it!
Tuesday, August 21, 2007
Florida foreclosure activity drops, but state is still a national leader Tampa Bay Business Journal - 11:49 AM EDT Tuesday, August 21, 2007 One of every 431 homes in Florida is now in foreclosure. While the state is second only to California in the number of foreclosures filed, Florida is down 9 percent in foreclosure activity from July 2006, according to a monthly report from RealtyTrac. Read the rest of the story here: http://www.bizjournals.com/tampabay/stories/2007/08/20/daily16.html?f=et83&ana=e_du
Wednesday, August 15, 2007
Foreclosure sales.........what you might not know
Snippet from Florida Association of Realtors:
Read the whole story:http://www.floridarealtors.org/NewsAndEvents/n4-081407.cfm
Foreclosures: for novices, it’s a crapshoot
NORTH PALM BEACH, Fla. – Aug. 14, 2007 – The allure of foreclosed properties to a would-be real estate investor is nearly irresistible: Buy valuable properties for pennies on the dollar with little or no risk of your own money, work when you feel like it, and grow rich.
It's important to understand:
There are three distinct phases of foreclosures, each with its own advantages and each fraught with peril:
Preforeclosure: The time between when the homeowner has stopped making payments and when the land is actually put up for sale at auction. Investors take this opportunity to deal directly with the homeowner.
Auction: When the courts seize the property from the homeowner and sell it to the highest bidder. The county sheriff or a trustee handles this process, depending on the state.
REO: If the property fails to sell at auction, or if the lender ends up as the highest bidder, the home becomes REO, or “real estate owned” by the bank. Banks then try to sell these REO properties on the open market, often through a real estate agent or third-party marketing company.Often these homes are sold to buyers who don’t even know they are buying a foreclosure, and go through the entire process as they would with any other home.
Going once . . .The typical foreclosure is literally bought on the county courthouse steps during a sheriff’s auction or a trustee’s sale. These auctions are typically held on a weekday morning, and bidders must come to the sale armed with information and flush with cash or its equivalent. Plastic, personal checks and IOUs are almost universally shunned at auction and, depending on where you live, investors usually must make a sizable deposit or pay the entire sum on the spot.
Details vary widely by state, but as a rule, prospective buyers are not allowed inside the house before bidding begins. This is a frightening concept for many buyers, who must lay down thousands of dollars in cash up front without knowing anything about the home beyond what is available through basic public records searches and a curbside appraisal.The house could be infested with termites, gutted to the rafters by previous residents or filled with lead paint or asbestos, and a buyer wouldn’t know until after the sale is final. This as-is aspect of auctions is only part of what can make foreclosures so perilous for beginning buyers.
Another is that these homes can never be guaranteed to come with a clear title.“You can never be absolutely sure you are going to be buying a house with a clean title in any sale, but foreclosures are particularly problematic,” says John Mixon, law alumni professor at University of Houston Law Center.During a typical foreclosure auction, the homes that will be sold are listed in the legal advertising section of the county’s newspaper of record at least a week before the sale. And while you may have a week to research the records and history for each house scheduled for auction, many homeowners settle their dispute with the bank at the 11th hour, halting the sale. This means any time, effort or expense you invested to research the home is lost.
Given these constraints, obtaining title insurance is out of the question.But choosing to forgo title research could end up being infinitely more costly. “There are so many regulations, so many procedures that if you leave out a step, a previous owner may come out of the woodworks and show this to the court and you lose everything you put into the deal,” Reed says.
Not all hopelessBut all that doesn’t mean every auction deal is hopelessly risky.“Very few institutional foreclosures are defectively handled,” Mixon says, so the best bet is to stick to homes that were foreclosed by reputable lenders, but only if they were the first lien holder, usually through a first mortgage. If the deal was done properly on the front end, complete with title insurance, there’s less likelihood that a skeleton is lurking, and about a 90-percent chance of getting a good title.
Government auctions, Another variation on the auction is buying properties foreclosed by a government agency, such as the Department of Housing and Urban Development or the Veterans Administration.These auctions are typically conducted online through a marketing company. Buyers are allowed to tour the homes in advance, conduct inspections and can often get title insurance.While these auctions are appealing, the availability of homes is limited and the small stock is often bid on by several buyers, making it a very competitive market with prices discounted only slightly, if at all, off current market value.
Tabletop negotiations---One purchase method advocated by numerous seminars and real estate gurus is to find property owners delinquent in their payments through legal ads or online services that search public records and courthouse documents. You could then approach the owner directly to negotiate a private deal. Advocates of this method call it “buying equity.” Essentially, investors pay the owner a fee and then take over the existing debt and the home. This keeps protects the homeowner’s credit report from the black mark of foreclosure. Buying equity this way is difficult if a seller’s market exists because the owner could just as easily sell the home and usually pocket a greater amount in appreciation than an investor would be willing to pay.“Some people call this stealing property,” Reed says.
Sale mentality---Despite all the potential pitfalls, interest in foreclosures runs high. Part of the attraction comes from the same motivation that makes bargain shopping trendy, says C.J. Gehlke, editorial director of “The Resource,” a monthly newsletter published by REO Nationwide.“What you find is a frenzy similar to what you get at a department store sale,” she says. “When you buy a house at foreclosure, it has the same mystique. You can brag to people at a cocktail party about how much you saved.”
Read the whole story:http://www.floridarealtors.org/NewsAndEvents/n4-081407.cfm
Read the whole story:http://www.floridarealtors.org/NewsAndEvents/n4-081407.cfm
Foreclosures: for novices, it’s a crapshoot
NORTH PALM BEACH, Fla. – Aug. 14, 2007 – The allure of foreclosed properties to a would-be real estate investor is nearly irresistible: Buy valuable properties for pennies on the dollar with little or no risk of your own money, work when you feel like it, and grow rich.
It's important to understand:
There are three distinct phases of foreclosures, each with its own advantages and each fraught with peril:
Preforeclosure: The time between when the homeowner has stopped making payments and when the land is actually put up for sale at auction. Investors take this opportunity to deal directly with the homeowner.
Auction: When the courts seize the property from the homeowner and sell it to the highest bidder. The county sheriff or a trustee handles this process, depending on the state.
REO: If the property fails to sell at auction, or if the lender ends up as the highest bidder, the home becomes REO, or “real estate owned” by the bank. Banks then try to sell these REO properties on the open market, often through a real estate agent or third-party marketing company.Often these homes are sold to buyers who don’t even know they are buying a foreclosure, and go through the entire process as they would with any other home.
Going once . . .The typical foreclosure is literally bought on the county courthouse steps during a sheriff’s auction or a trustee’s sale. These auctions are typically held on a weekday morning, and bidders must come to the sale armed with information and flush with cash or its equivalent. Plastic, personal checks and IOUs are almost universally shunned at auction and, depending on where you live, investors usually must make a sizable deposit or pay the entire sum on the spot.
Details vary widely by state, but as a rule, prospective buyers are not allowed inside the house before bidding begins. This is a frightening concept for many buyers, who must lay down thousands of dollars in cash up front without knowing anything about the home beyond what is available through basic public records searches and a curbside appraisal.The house could be infested with termites, gutted to the rafters by previous residents or filled with lead paint or asbestos, and a buyer wouldn’t know until after the sale is final. This as-is aspect of auctions is only part of what can make foreclosures so perilous for beginning buyers.
Another is that these homes can never be guaranteed to come with a clear title.“You can never be absolutely sure you are going to be buying a house with a clean title in any sale, but foreclosures are particularly problematic,” says John Mixon, law alumni professor at University of Houston Law Center.During a typical foreclosure auction, the homes that will be sold are listed in the legal advertising section of the county’s newspaper of record at least a week before the sale. And while you may have a week to research the records and history for each house scheduled for auction, many homeowners settle their dispute with the bank at the 11th hour, halting the sale. This means any time, effort or expense you invested to research the home is lost.
Given these constraints, obtaining title insurance is out of the question.But choosing to forgo title research could end up being infinitely more costly. “There are so many regulations, so many procedures that if you leave out a step, a previous owner may come out of the woodworks and show this to the court and you lose everything you put into the deal,” Reed says.
Not all hopelessBut all that doesn’t mean every auction deal is hopelessly risky.“Very few institutional foreclosures are defectively handled,” Mixon says, so the best bet is to stick to homes that were foreclosed by reputable lenders, but only if they were the first lien holder, usually through a first mortgage. If the deal was done properly on the front end, complete with title insurance, there’s less likelihood that a skeleton is lurking, and about a 90-percent chance of getting a good title.
Government auctions, Another variation on the auction is buying properties foreclosed by a government agency, such as the Department of Housing and Urban Development or the Veterans Administration.These auctions are typically conducted online through a marketing company. Buyers are allowed to tour the homes in advance, conduct inspections and can often get title insurance.While these auctions are appealing, the availability of homes is limited and the small stock is often bid on by several buyers, making it a very competitive market with prices discounted only slightly, if at all, off current market value.
Tabletop negotiations---One purchase method advocated by numerous seminars and real estate gurus is to find property owners delinquent in their payments through legal ads or online services that search public records and courthouse documents. You could then approach the owner directly to negotiate a private deal. Advocates of this method call it “buying equity.” Essentially, investors pay the owner a fee and then take over the existing debt and the home. This keeps protects the homeowner’s credit report from the black mark of foreclosure. Buying equity this way is difficult if a seller’s market exists because the owner could just as easily sell the home and usually pocket a greater amount in appreciation than an investor would be willing to pay.“Some people call this stealing property,” Reed says.
Sale mentality---Despite all the potential pitfalls, interest in foreclosures runs high. Part of the attraction comes from the same motivation that makes bargain shopping trendy, says C.J. Gehlke, editorial director of “The Resource,” a monthly newsletter published by REO Nationwide.“What you find is a frenzy similar to what you get at a department store sale,” she says. “When you buy a house at foreclosure, it has the same mystique. You can brag to people at a cocktail party about how much you saved.”
Read the whole story:http://www.floridarealtors.org/NewsAndEvents/n4-081407.cfm
Thursday, July 19, 2007
Steps to a Credit Make Over
Seven Steps To A Credit Score Makeover by Broderick Perkins You can mitigate the effect of tighter mortgage underwriting standards by improving your credit report profile and, as a result, your credit score. Just don't expect that your knee-jerk reaction to tighter money will generate overnight success. Chances are, you didn't get all those credit report blemishes during a single credit buying binge. And, if you are like many consumers, you don't even know what you are up against. BankRate.com recently found that 32 percent of Americans surveyed never check their credit reports and have no idea what shape it's in. It's time to find out and do something about it. Local lenders say the incidence of credit report knowledge is even higher when borrowers sit down to apply for home loans. "Less than 10 percent have seen their report and among those who have, most of the reports are old, many are only from one bureau and so they don't have a complete picture," said Joel Spolin, president of Absolute Mortgage in Palo Alto, CA. Your credit report is a sort of fiscal fitness report on your credit habits and the information it contains factors heavily into your credit score, a statistical analysis or numerical value placed on your credit behavior. Your credit score is commonly used to nay or yea your requests for credit and determine how much you'll pay for credit approved. Here are seven starter steps to take toward improving your creditworthiness. Get your credit report and look for errors. These days getting a credit report should be the no-brainer first step toward improving your chances of landing credit at the best price possible. Simply go online to AnnualCreditReport.com, the ONLY federally-sanctioned and cost-free service, and obtain a free credit report from Equifax, Experian and TransUnion. Given the year is more than half over, get your report from at least two companies, perhaps three. Next year set up your own credit monitoring service by getting a report from a different company every four months. Again, through AnnualCreditReport.com, each report is free. Questions? Call (877) 322-8228 for details about your free credit report rights. "We advise the client to get one report, pulled by a lender or broker and then use this report to share with other brokers so their credit is not getting constantly pulled," said Paul Garcia A trusted lender or broker can pull your report for you and show you the ropes. Limiting the number of credit report pulls is also key. However, someone pulling your credit report can charge you a fee and the pull will show up on your credit report, though with little consequence. Get your feet wet the first time around. Pull your own free credit report. Examine it for errors. That's the spirit of the law, to give you control and knowledge. Bring in a realty pro later, if necessary. "It's good to get the report so the borrower knows what they are dealing with and to determine if any corrective actions need to be taken," said Garcia. Check credit limits and attempt to keep balances evenly distributed across credit lines, advises attorney Edward Jamison, with the Los Angeles, CA Jamison Law Group he founded to specialize in consumer credit and identity theft. Make sure your maximum credit limit is reported for each account. "When no limit is reported, credit scoring software presumes the account is 'maxed out'." Jamison says credit scoring software scores more favorably when the balance is 50 percent or below, but too many open accounts with zero balances could lower the score with the assumption you could suddenly run up a lot of credit. Keep some credit cards open. Close others. Open credit cards with limited balances and good payment records raises scores, especially long-time credit cards. However, the accounts should be limited in number and well-managed. "Closing credit card accounts can hurt your score unless the accounts were opened less than two years ago, and you have more six credit cards," says Jamison. It's about striking a balance. "Credit scoring software assumes that people who have had credit for a longer time are at less risk of defaulting on payments," Jamison said. Where possible, get rid of late payments listed on the credit report. Jamison says if your late payments are dated and you've been a good credit customers for some time creditors may, in good faith, adjust your statement. "If you are a customer in good standing, the creditor may work with you," he said. The effort isn't easy. A demanding, frustrated and rude approach will make it more difficult. The lender isn't required to remove dings for 7 to 10 years in some cases. Pay off collection accounts and past due amounts. Payoffs and paying past due accounts start the clock running on how long the ding will remain on your report. In some cases the collection agency or creditor may remove the ding, says Jamison. Again, it's not easy. "The consumer should contact the collector and request a letter explicitly stating their agreement to delete the account upon receipt or clearance of the payment," he said. Likewise, whenever possible, seek to have charge-offs and liens that are less than two years old removed. "Charge-offs and liens that are older than 24 months do not affect your credit score nearly as much as ones under 24 months," says Jamison. "But if they're newer than 24 months, they can seriously damage your credit," revealing you as a more recent credit slacker. Keep in mind, all efforts to improve your credit, other than correcting errors, are typically based on you being a mature credit consumer -- pay your bills on time, don't overload yourself with debt and get in touch with lenders at the first sign of trouble for workouts than can help save your credit or reduce the damage to your report and your credit score.
Wednesday, July 11, 2007
Florida pre-foreclosures spike for first half of '07
Tampa Bay Business Journal - Tuesday, July 10, 2007
Florida took the No. 2 spot among the states with the highest preforeclosure filings from January through June, foreclosures.com reported Monday.
Florida posted 90,145 pre-foreclosure filings -- homeowners who have defaulted on their mortgages but have not yet lost their homes -- or 1.42 percent per capita. That compared with 39,037 filings, or .62 percent per capita, for the same period in 2006.
Nationwide, three out of every 1,000 homeowners lost their homes to foreclosure in the first half of the year, which represents a 41 percent increase compared to the same period last year. There also were more than 507,000 preforeclosure filings in the United States, or nearly seven of every 1,000 households, for the first six months of the year.
Foreclosures.com is the California-based publisher of foreclosure and property information.
Tampa Bay Business Journal - Tuesday, July 10, 2007
Florida took the No. 2 spot among the states with the highest preforeclosure filings from January through June, foreclosures.com reported Monday.
Florida posted 90,145 pre-foreclosure filings -- homeowners who have defaulted on their mortgages but have not yet lost their homes -- or 1.42 percent per capita. That compared with 39,037 filings, or .62 percent per capita, for the same period in 2006.
Nationwide, three out of every 1,000 homeowners lost their homes to foreclosure in the first half of the year, which represents a 41 percent increase compared to the same period last year. There also were more than 507,000 preforeclosure filings in the United States, or nearly seven of every 1,000 households, for the first six months of the year.
Foreclosures.com is the California-based publisher of foreclosure and property information.
Sunday, July 01, 2007
Feds Investigating Home Builder Mortgage Programs for Consumer Abuses by Kenneth R. Harney
Most American home builders don't need new problems at the moment, but they just got one: Federal regulators confirmed last week that they are aggressively investigating allegations that builders around the country are pressuring or requiring purchasers to use their mortgage financing affiliates illegally.
Under the federal Real Estate Settlement Procedures Act (RESPA), builders and realty brokers are prohibited from requiring customers to use their own affiliates or subsidiaries for mortgage, title or other settlement-related services. They can recommend affiliates -- provided they also disclose the relationship -- but they cannot force consumers to use them.
Enforcement officials at HUD, which has regulatory oversight of RESPA, have begun looking into widespread allegations that some builders:
Increase the prices of homes when purchasers decline to use their affiliated mortgage companies.
Present $10,000 to $30,000 "incentives" -- upgrades to kitchens, "free" finished basements or "free" settlement costs -- as true discounts, when in fact the incentives are built into the cost of the house.
Require the use of an affiliated lender in order to qualify for incentives when they know their affiliates' mortgage programs carry intentionally inflated fees or interest rates to cover the incentives in whole or part.
Refuse to go to settlement when buyers change their minds and decline to use the builder's affiliated or wholly-owned mortgage company. In one case, a builder declared an $11,845 good faith deposit forfeited when the customer switched to an independent, nonaffiliated lender.
HUD officials spoke on background and declined to identify specific builders since some cases are still being put together or legal settlements may be pending. But the officials confirmed that in a number of instances, the department intervened directly on buyers' behalf and obtained substantial cash refunds.
In one case, a buyer complained to HUD's "RESPA police" -- its enforcement staff on settlement-related issues -- when a builder offered an "incentive package" of $13.450 for a customized "morning room," but only if the buyer got his mortgage from the builder's affiliated lender.
The builder insisted that the in-house mortgage affiliate's rates and fees were "very competitive" with others lenders in the area. But the loan deal carried a $5,400 origination fee -- far beyond fees charged by competing lenders and brokers. HUD investigators contacted the builder, warned of possible RESPA violations on required use, and got the deal changed. The buyer got his mortgage without the $5,400 fee, plus got the $13,450 morning room add-on.
HUD investigators say they also obtained $32,400 in refunds from a condo developer to 200 condo unit purchasers. The developer acknowledged that it charged each of the purchasers $162 for a property survey that never was required by the mortgage lender and constituted an "unearned fee" under RESPA.
Officials said active investigations are now underway into other alleged builder misconduct. For example, one builder allegedly is requiring home buyers to use only a specified title company. In addition to violating RESPA's required-use rule, investigators believe "the builder established a sham title company for the purpose of receiving kickbacks and unearned fees from the title insurance company." Officials say the same builder apparently has created a sham mortgage company for the same purpose.
How can consumers deal with strong-arm pressure from builders on choice of mortgage lenders? HUD recommends that buyers check out prevailing local market interest rates and fees, compare them to the builder-controlled lender's offer, and then tote up the true costs. Prudent buyers should also thoroughly study prices for comparable new houses in the market in order to spot fake "discounts" -- where the costs of incentive packages have merely been tacked on to the sale price of the house.
Published: November 13, 2006
Use of this article without permission is a violation of federal copyright laws -- http://www.loc.gov/copyright.
Most American home builders don't need new problems at the moment, but they just got one: Federal regulators confirmed last week that they are aggressively investigating allegations that builders around the country are pressuring or requiring purchasers to use their mortgage financing affiliates illegally.
Under the federal Real Estate Settlement Procedures Act (RESPA), builders and realty brokers are prohibited from requiring customers to use their own affiliates or subsidiaries for mortgage, title or other settlement-related services. They can recommend affiliates -- provided they also disclose the relationship -- but they cannot force consumers to use them.
Enforcement officials at HUD, which has regulatory oversight of RESPA, have begun looking into widespread allegations that some builders:
Increase the prices of homes when purchasers decline to use their affiliated mortgage companies.
Present $10,000 to $30,000 "incentives" -- upgrades to kitchens, "free" finished basements or "free" settlement costs -- as true discounts, when in fact the incentives are built into the cost of the house.
Require the use of an affiliated lender in order to qualify for incentives when they know their affiliates' mortgage programs carry intentionally inflated fees or interest rates to cover the incentives in whole or part.
Refuse to go to settlement when buyers change their minds and decline to use the builder's affiliated or wholly-owned mortgage company. In one case, a builder declared an $11,845 good faith deposit forfeited when the customer switched to an independent, nonaffiliated lender.
HUD officials spoke on background and declined to identify specific builders since some cases are still being put together or legal settlements may be pending. But the officials confirmed that in a number of instances, the department intervened directly on buyers' behalf and obtained substantial cash refunds.
In one case, a buyer complained to HUD's "RESPA police" -- its enforcement staff on settlement-related issues -- when a builder offered an "incentive package" of $13.450 for a customized "morning room," but only if the buyer got his mortgage from the builder's affiliated lender.
The builder insisted that the in-house mortgage affiliate's rates and fees were "very competitive" with others lenders in the area. But the loan deal carried a $5,400 origination fee -- far beyond fees charged by competing lenders and brokers. HUD investigators contacted the builder, warned of possible RESPA violations on required use, and got the deal changed. The buyer got his mortgage without the $5,400 fee, plus got the $13,450 morning room add-on.
HUD investigators say they also obtained $32,400 in refunds from a condo developer to 200 condo unit purchasers. The developer acknowledged that it charged each of the purchasers $162 for a property survey that never was required by the mortgage lender and constituted an "unearned fee" under RESPA.
Officials said active investigations are now underway into other alleged builder misconduct. For example, one builder allegedly is requiring home buyers to use only a specified title company. In addition to violating RESPA's required-use rule, investigators believe "the builder established a sham title company for the purpose of receiving kickbacks and unearned fees from the title insurance company." Officials say the same builder apparently has created a sham mortgage company for the same purpose.
How can consumers deal with strong-arm pressure from builders on choice of mortgage lenders? HUD recommends that buyers check out prevailing local market interest rates and fees, compare them to the builder-controlled lender's offer, and then tote up the true costs. Prudent buyers should also thoroughly study prices for comparable new houses in the market in order to spot fake "discounts" -- where the costs of incentive packages have merely been tacked on to the sale price of the house.
Published: November 13, 2006
Use of this article without permission is a violation of federal copyright laws -- http://www.loc.gov/copyright.
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