Tag Archives: mortgage brokers

Real Estate

Many Mortgage Holders Underwater

In what could be another sign that the housing crisis is far from over, the percent of mortgage holders who are underwater on their homes continued to rise in the third quarter–and some say it could be another eight to 10 months before that trend turns around.

In the U.S., 23.2% of U.S. mortgage holders were underwater, owing more money than the house is worth. That’s up from 21.7% from a year ago, according to Q03 data out Wednesday from Zillow.com. Roughly 13.9 million homes now have negative equity. Many of these homes could end up in foreclosure should borrowers give up making payments on homes that aren’t worth what they owe—let alone building equity. (See “The Great Mortgage Mystery“)

In the latest report, the worst hit areas of the housing bust show small signs of improvement, while new locales saw growth in underwater real estate. In Miami, for example, 42% of homes have negative equity, compared to 45.1% in the third quarter 2009, according to Zillow. That’s in part because many of these underwater homes have been foreclosed on.

In San Francisco, the number of underwater homes has dropped from 24.9% to 20.2%, mainly due to stabilizing home values that are pulling more people out of negative equity, says Stan Humphries, Zillow’s chief economist. The median sales price of existing single-family homes in the San Francisco metropolitan area is up about 25% since last year, according to the National Association of Realtors.

Source: Wall Street Journal

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Real Estate

Mortgage Companies Profit From Foreclosures

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The White House has asked mortgage executives to come up with the manpower to stop precarious loans from becoming foreclosures, but a New York Times story says finance experts say a lack of bodies isn’t the problem. It’s greed.

Mortgage companies collect fees for appraisals, insurance, legal services and other administrative busywork when homes go into foreclosure, and many make more on delinquent loans than they do on those in good standing. So unless homeowners’ loans are through businesses that values their ability to keep roofs over their heads above the bottom line, they’re out of luck:
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Real Estate

Mortgage Brokers Can Cost You More Money

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Using a reputable mortgage broker can save you time and remove some of the hassle in obtaining a loan.  However according to a study by the Department of Housing and Urban Development published last year, you may wind up paying more for your loan.

According to the study, borrowers paid about $300 to $425 more in fees when they worked with a broker as opposed to working directly with a lender.

If you are a home buyer, you may want to investigate mortgage options as opposed to using a broker by comparison shopping. This can be tricky, but be sure to include at least one credit union, a community bank and multiple national banks. You may have to spend several days doing this before you find just the right loan.

You should compare one type of loan at a time–for instance, a 30-year, fixed rate with no points. Their research should include a request for a guarantee that both the rate and the good-faith estimate will be exactly as initially presented. This standard could be difficult for a buyer to find, but it’s worth trying to find it, experts say.

If you get too confused, you can always go to a mortgage broker, they have access to multiple lenders and can lead you through the lending process rapidly.