Tag Archives: mortgage

Real Estate

Foreclosure Sales Drop, But Inventories Swell

Even with continuing foreclosures, how many are started and just hang there?  I know of several people who have been in their home for six months to a year and the banks have not finished the foreclosure proceedings. The market is flooded with foreclosures, so maybe they are hanging back on some of them.  Here’s a related article:

“Foreclosure sales continue to drop, but foreclosure inventories remain high in many markets across the country. By the end of May, the number of mortgages that were 90 or more days delinquent, combined with the foreclosure inventory, outpaced foreclosure sales by 50:1, Lender Processing Services Inc. reports.

The biggest drop in foreclosure sales occurred in East Coast states. For example, foreclosure sales plummeted 96 percent in Washington, D.C., 80 percent in Maryland, and 79 percent in New York, according to Lender Processing Services’ monthly mortgage monitor report.

Mortgages that are 90 days or more delinquent, combined with the foreclosure inventory, totaled more than 4 million in May. Foreclosure sales at the end of May totaled 78,676.

The average time a home owner spends in foreclosure continues to get longer. More than 33 percent of home owners in foreclosure have not made a mortgage payment in more than two years.”

Source: “Foreclosure Sales Plummet in May,” RISMedia (July 5, 2011)

 

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Real Estate

New Loan Limits Would Hurt Home Sales


Unless Congress takes action, the current loan limits will expire on Sept. 30 and the cost of a mortgage could rise significantly, especially in high-cost areas such as California.

  • More than 30,000 California families could face higher down payments, higher mortgage rates, and stricter loan qualification requirements if conforming loan limits on mortgages backed by the Federal Housing Administration (FHA), Fannie Mae, and Freddie Mac are reduced beginning October 1, 2011, according to analysis by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).
  • The conforming loan limit determines the maximum size of a mortgage that FHA, Fannie Mae, and Freddie Mac government-sponsored enterprises (GSEs) can buy or guarantee.
  • Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan and require a higher down payment, increasing the monthly payment and negatively impacting housing affordability for California home buyers.
  • C.A.R. and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits.  As a result of C.A.R.’s and NAR’s efforts, in 2008, Congress temporarily raised the conforming loan limits from $417,000 to $729,750 and has extended them annually through fiscal year 2011.
  • To see the impact the lower limits would have on various regions throughout the state, go to the click here

Read the full story

 

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Real Estate

Facing Foreclosure? Here’s Some Myths, Debunked

Although there are a number of programs available to help homeowners who have defaulted on their mortgages keep their home, the large amount of misinformation tends to result in troubled homeowners failing to contact their lender until it is too late.

  • Some homeowners believe, incorrectly, that contacting their lender early in the process will draw attention to their situation and result in a quicker foreclosure.  In reality, contacting the lender or servicer is an important first step, and the sooner, the better.  Contacting the lender provides the homeowner with an opportunity to explain their situation and the steps necessary to deal with it.
  • It is a common misconception that missing one mortgage payment will lead to foreclosure.  However, the foreclosure process doesn’t begin until payments are 90 days delinquent.  Lenders generally have a financial interest in keeping homeowners in their homes, so making contact as early as possible could help lenders modify terms of the mortgage or devise a repayment plan.
  • Once homeowners are behind on their mortgage payments, it becomes challenging to dig out of the hole.  Some homeowners try to solve this by depleting their savings or dipping into their retirement accounts to become current on the loan.  Most financial experts advise against this.
  • Delinquent homeowners may think they should stop making mortgage payments to get their lender’s attention, which often isn’t the case.  When possible, homeowners should stay current on their mortgage payments and continue to contact their lender on a regular basis.
  • Homeowners who have applied for assistance or loan modification programs in the past and were turned down are advised to reapply.  Program parameters are constantly changing, so the rules might have been liberalized since the last time the borrower sought help.
  • A number of free, government-sponsored housing services are available through the Dept. of Housing and Urban Development (HUD).  A list of HUD-approved agencies can be found at http://www.hud.gov.

Read the full story

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John J. O’Dell® GRI
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O’Dell Realty
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jodell@nevadacounty.com

Real Estate

Bank Foreclosures Having Problems In Court

Photo courtesy of Democratic Nation USA
Photo courtesy of Democratic Nation USA

The good old banks trying to save money by circumventing proper title paper work has resulted in a legal tangle for banks. Instead, they used Mortgage Electronic Registration Systems. Recent court rulings are raising some uncertainties when it comes to Mortgage Electronic Registration Systems (or MERS), which electronically tracks and transfers millions of loans and has been in use by the mortgage industry since the 1990s.

Borrowers who have been foreclosed upon using MERS have fought back in court–with mixed success–challenging the legality of MERS and arguing that it doesn’t own the mortgage and therefore, doesn’t have the right to foreclose on them.

The industry is keeping a close watch on recent court rulings since the results could have a big impact on reshaping the mortgage industry and potentially throwing the validity of thousands foreclosures into question, The Washington Post reports. MERS holds 65 million loans in its registry.

A New York appellate court ruled last week that MERS did not have the right to foreclosure on a property it doesn’t own. However, an appeals court in California recently ruled that MERS did have the power to act on behalf of lenders. In Minnesota, lawmakers passed a law stating that MERS had the right to undertake foreclosures.

However, earlier this year, a Michigan court of appeals ruled that MERS lacks authority to foreclose. Following the court decision, the ruling practically brought closings on REOs to a halt there and called into question foreclosures already sold in the city.

In March, MERS requested banks and mortgage servicers stop using the MERS name to foreclose on homes.

“We know that MERS is a problem; we don’t know exactly what that’s going to mean,” says Adam Levitin, a Georgetown University law professor. “We still don’t have really definitive law on any of the issues involved. It’s going to take awhile before we really know the answers.”

A MERS spokeswoman disagrees. “The court decisions have overwhelmingly leaned in favor of MERS and validating MERS’s business model,” says Janis Smith, vice president of corporate communications for MERSCORP. “Overall, the record is pretty clearly established.”

Source: “Courts May Reshape Mortgage Industry,” The Washington Post (June 15, 2011)

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Watch the above video for more of what banks are doing to homeowners.

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John J. O’Dell Realtor®
Real Estate Broker
O’Dell Realty
9530) 263-1091
jodell@nevadacounty.com


Real Estate

Bank of America Gets Foreclosed

httpv://youtu.be/MBuCSTFJffY

How screwed up are the banks? They foreclose on a home that has no mortgage! So the attorney for the couple forecloses on the bank (really a sheriffs sale). Great!

Between “robosigning” where banks make up false mortgage notes, to not doing mortgage modifications, the banks continue the drive this country into the ground. Of course, none of the banks CEO’s responsible for this mess have gone to jail. Where do you think you and I would be if we forged mortgages?

For all your real estate needs, call or email:

John J. O’Dell Realtor®
Real Estate Broker
O’Dell Realty
9530) 263-1091
jodell@nevadacounty.com

Real Estate

Old Mortgage Scam Aims to Hijack a Payment or Two

Image courtesy of True Blue Realtor.com
Image courtesy of True Blue Realtor.com


A mortgage scam in which con artists send letters telling borrowers they should begin sending their mortgage payments to a fictitious company that has begun servicing their loan, is making the rounds again.  Unfortunately, by the time borrowers figure out their loan has not changed servicer’s, they’ve already sent one or two mortgage payments to the fictitious company.’

Making sense of the story

  • According to those familiar with the scam, it typically works because most borrowers are unaware of the rules when it comes to the transfer of mortgage-servicing rights.  Under the law, the current servicer is required to send a “goodbye” letter notifying the borrower that payments should be sent to a new company as of a certain date.
  • A week or two later, the law says the borrower should receive a second letter, which, by law, should include a welcome missive from the new servicer with the details of the mortgage payment – a breakdown among principal, interest, and escrow.  The package also is likely to include a few payment coupons, if not a brand-new coupon book, and self-addressed printed envelopes for borrowers to make payments.
  • Both the goodbye and welcome letter should include the mortgage loan number.  If either letter does not, or if the information included in one doesn’t match what’s in the other, borrowers should call their original servicers to inquire.
  • Borrowers only receiving one letter should be extra cautious.  Even if everything appears to be standard procedure, borrowers are still advised to call the first company’s toll-free number just to be sure.

Read the full story

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John J. O’Dell Realtor®
Real Estate Broker
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com

Real Estate

Lender Processing Services, Inc. Subpoenaed in Probe of “Robosigning” of Mortgage Documents

Attorney General Kamala D. Harris
Attorney General Kamala D. Harris

LOS ANGELES – Attorney General Kamala D. Harris announced she has subpoenaed Lender Processing Services, Inc. (LPS), as part of her continuing probe into “robosigning” of mortgage documents and other illegal activities in the mortgage servicing industry, especially misconduct affecting borrowers facing, or in the midst of, foreclosure.

Robosigning is the practice of signing documents used by banks or mortgage servicing companies to foreclose on borrowers without verifying their accuracy – often thousands of different documents signed by a single individual per day. In many cases, the robosigners don’t even read or understand the document they are signing.

“California homeowners have been exposed to fraud and crime at every step of the mortgage process,” said Attorney General Harris. “Justice demands we come to their aid and a key step in that is to investigate robosigning and the potential for inaccurate or unjust foreclosures.”

Read the rest of the story

For all your real estate needs, call or email:
John J. O’Dell Realtor® GRI
O’Dell Realty
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jodell@nevadacounty.com

Real Estate

You Own My Mortgage? Prove It

Delinquent home owners are finding a wild-card in saving their home from foreclosure. In court, more home owners are successfully arguing that their mortgage companies can’t prove they own the loan and don’t have the right to foreclose on them.

The Wall Street Journal reports: “In some cases, borrowers are showing courts that banks failed to properly assign ownership of mortgages after they were pooled into mortgage-backed securities. In other cases, borrowers say that lenders backdated or fabricated documents to fix those errors.”

In a few cases, home owners have even had their foreclosures reversed as courts blame lenders’ sloppy paperwork.

Some argue that borrowers are using “arcane legal rules” to get free houses when not paying their bills. Banking industry lawyer Laurence E. Platt at K&L Gates in Washington says “the real assault on the legal system” are efforts by judges and local officials to not give lenders their rightful ownership and make foreclosures nearly impossible.

However, attorney Thomas Ice in Royal Palm Beach, Fla., argues that borrowers shouldn’t have to tolerate incomplete or falsified evidence by lenders.

Source: “Banks Hit Hurdle to Foreclosures,” The Wall Street Journal (June 1, 2011)
For all your real estate needs, call or email:

John J. O’Dell Realtor® GRI
Real Estate Broker
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com

Real Estate

Many Homeowners Refinancing Mortgages to Shorter Terms


Borrowers who can afford higher mortgage payments, and who meet lenders’ stricter loan guidelines, often opt to replace their 30-year mortgages with shorter term loans at near-record low rates.

  • The latest Freddie Mac quarterly survey of homeowners who refinanced found that more than one in three borrowers who refinanced from a 30-year fixed-rate loan opted to replace it with 15-year or 20-year mortgages at near-record low rates.
  • Homeowners considering refinancing into a shorter-term mortgage must have the income or financial reserves sufficient to pay the extra money each month.
  • Borrowers not only need to have the income or financial reserves, they also have to qualify for a refinance, have the credit score needed, and the home appraisal to support it.
  • For some low-cost refi programs, lenders want to see at least 25 percent equity in the house.  Higher FICO credit score requirements by Fannie Mae and Freddie Mac are another impediment, as both companies reserve their best rates for borrows with FICO scores of 740 or higher.

Read the full story

For all your real estate needs, call or email:

John J. O’Dell
Real Estate Broker
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com

Real Estate

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.
 

  • More than 1,000 home buyers were asked to respond true or false to eight mortgage-related 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.
  • Forty-five percent of home buyers surveyed also incorrectly stated that home buyers should 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.
  • An additional one-third of respondents do not understand that lender fees are negotiable and vary by lender, incorrectly thinking lenders are required by law to charge the same fees for credit reports and appraisals.
  • Survey respondents also believe that pre-qualifying for a loan means they have secured 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.
  • Slightly less than half of the polled prospective home buyers also do not understand that Federal 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

 

For all your real estate needs, call or email:

John J. O’Dell
Realtor® GRI
Real Estate Broker
O’Dell Realty
(530) 263-1091
jodell@nevadacounty.com