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Lauren Schenke

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Mortgages

The Skinny on the Mortgage Settlement

Here’s some great links to some articles around the web for the latest on the government’s mortgage settlement.

Housing Settlement Details Filed in Court – CNN

$25B Foreclosure Settlement Filed in Court – BizJournals.com

US Files $25B Settlement With Banks on Mortgage Abuses – MSNBC

Rage Grows Over Mortgage Deal – CNN

Sacramento Real Estate Attorney Steve Beede Talks About Mortgage Settlement

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FHA Strealime Re-Fi’s Just Got Better!

Yesterday brought us some good news for some homeowners who would love to refinance to the current low rates, but haven’t been able to since they are  underwater! HUD, or the US Department of Housing and Urban Development, announced that they have agreed to make FHA Streamline Refinance opportunities more affordable beginning June 11, 2012 for homeowners who last purchased or refinanced their home prior to May 31, 2009. Both the Upfront Mortgage Insurance Premium (MIP) and the annual premium will decrease significantly over current rates! If you have an FHA loan, you may qualify to refinance your mortgage and save hundreds of dollars per month, EVEN if your home is underwater!

Qualifications

  • Mortgage must be FHA, not conventional (ie, you probably put 3.5% down when you bought your house)
  • Mortgage must have been originated prior to 5/31/09, or last refinanced prior to 5/31/09.
  • Borrower must be current on their mortgage payments

Call your lender for details to see if you qualify! I have great recommendations for Sacramento area mortgage lenders on my “vendors” page! Good luck!

HUD Press Release

The Think Big Work Small Guys Comment on the Possible Principal Reduction Plan….that’s a lot of P’s…

The Think Big Work Small guys are entertaining to watch…and their comments on the possible upcoming principal reduction “help” leaves you with some good things to think about. Do we REALLY want to entice millions of good homeowners to stop making their mortgage payments to qualify for a principal reduction? I think not.

Check out their video here… http://tbwsdailyshow.com/

FHA financing is about to get more expensive…

FHA Mortgages are considered one of the best ways for first time home buyers to purchase a home. The minimum required 3.5% down payment is smaller than that of conventional loans, and the credit and income requirements are slightly looser than conventional financing. The rates are usually slightly better and it’s a great way to get into a property. That being said, the lower down payment is riskier for lenders since the smaller down payment means less vested interest in the property by the buyer. Just think about it this way…wouldn’t a buyer who put 20% down towards their home purchase be more likely to make their payments than someone who put down only 3.5%??

This is why FHA financing has mortgage insurance, which is insurance on the loan to make sure that the buyer will continue to make their payments. Starting April 1, this insurance amount is about to increase, and FHA mortgages will be more expensive to use.

The up front mortgage insurance will increase from 1.0% of the purchase price to 1.75% of the purchase price. This can be rolled into the mortgage over the life of the loan, but will add more to the monthly payment. The monthly mortgage insurance is increasing from 1.15% to 1.25%. This will also add costs to the monthly payment. Both of these additions will make it more difficult for buyers to qualify for as much of a mortgage as they would have prior to April 1. It may very well be time to consider conventional financing….

For more information, check out a great article on CNN located here.

Mortgage rates are low low low….

Every time I think mortgage rates can’t possibly go even lower, they continue to surprise me. Here’s a great visual for you to see exactly what rates have been doing since 2000. It’s a great time for first time buyers, investors, and all buyers to get in the market or refinance their existing mortgage. If you need referrals to some of my favorite lenders, please check out my “vendor” tab on this site…and then start saving money!

 

Buying a Home After a Short Sale or Foreclosure

I met yesterday with one of my favorite lenders, Brad Brockett at Summit Funding, and we were chatting about life after a short sale or foreclosure. I was pleased to hear that the timeline isn’t nearly as dire as I thought it would be. Here’s the breakout as it currently stands with today’s underwriters:

Life after a Short Sale or Foreclosure

  • The general rule of thumb – for FHA guidelines –  is a waiting period of 3 years after a short sale or foreclosure before the buyer can purchase a primary residence.
  • This time period can possibly be reduced by 1 year due to events such as a major illness or job loss. Divorce and reduced work hours don’t typically count towards this reduction.
  • Buyer needs a minimum of a 640 credit score…a 620-640 may be possible but the lender may broker the loan to a different company.
  • If the buyer is using a down payment assistance program, the lender will likely require a minimum of a 640 credit score.
  • These requirements could qualify you for FHA financing. Conventional loans would likely require a 5 year waiting period to qualify.

Life after a Bankruptcy

  • The general rule of thumb – for FHA guidelines –  is a waiting period of 2 years after the discharge of a bankruptcy before the buyer can purchase a primary residence.
  • The other requirements are similar to the short sale/foreclosure guidelines above.

 

As you can see, there will probably be many buyers coming up in the future who will soon qualify to buy again! If you’re interested in talking with a mortgage lender about your qualifications, check out my “vendor” page for some great references! These lenders can help you through the mortgage process…once you are pre-approved and ready to look at homes, I’m here to help! Good luck!

Rate on 30-year mortgage rises to 3.95 percent

By DEREK KRAVITZ
AP Real Estate Writer
Published: Thursday, Feb. 23, 2012 – 7:06 am

WASHINGTON — The average rate on the 30-year fixed mortgage jumped after standing pat for three straight weeks at record lows. But the rate stayed below 4 percent for the 12th straight week, keeping home-buying and refinancing attractive for those who can qualify.

Mortgage buyer Freddie Mac said Thursday the rate on the 30-year loan rose to 3.95 percent. That’s up from last week’s rate of 3.87 percent, the lowest since long-term mortgages began in the 1950s.

The average on the 15-year fixed mortgage rose to 3.19 percent from 3.16 percent. It hit a record low of 3.14 percent three weeks ago.

So far, low rates have done little to help the housing market, which is slowly improving. Few people can qualify for the rates and many who can have already done so.

The four-week average of home purchase applications dropped in late January and February while refinancing is mostly flat, according to the Mortgage Bankers Association. Refinancing now makes more than 81 percent of mortgage activity.

But the housing market is flashing signs of health ahead of the spring-buying season. Sales of previously occupied homes are at their highest level since May 2010. More first-time buyers are making purchases. And the supply of homes fell last month to its lowest point in nearly seven years, which could push home prices higher.

The job market is also improving, which is critical to a housing rebound. In January, employers added 243,000 net jobs – the most in nine months – and the unemploymentrate fell to 8.3 percent, the lowest level in nearly three years.

Frank Nothaft, Freddie Mac’s chief economist, said the housing market is gradually starting to pick up. Still, home sales remain weak and it could take years for the market to fully return to health.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fees for the 30-year and 15-year loans were unchanged at 0.8.

For the five-year adjustable loan, the average rate fell to 2.80 percent from 2.82 percent, and the average fee fell to 0.7 from 0.8.

The average on the one-year adjustable loan fell to 2.73 percent from 2.84 percent, and the average fee was unchanged at 0.6.

Read more here: http://www.sacbee.com/2012/02/23/4285459/rate-on-30-year-mortgage-rises.html#storylink=cpy

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