Updates from November, 2012

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  • New Credit Risk Scoring Promises to Qualify More Borrowers

    9:05 am on November 8, 2012 | Comments:0
    Tags: , ,   Filed under: Buyer Info, Consumer news and advice, Credit, mortgage

    Evidence is growing that more borrowers will be approved for a mortgage without increasing risk to lenders through more sophisticated credit risk scoring that uses alternative data, such as unsecured credit and property history in consumer credit report analysis, according to a new report by the CEB TowerGroup.

    “Traditional credit data and analytics continue to be relevant, but are not sufficient to satisfy the consumer credit reformation of today,” says the CEB TowerGroup’s senior research director, Craig Focardi. (More …)

     
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  • Knowing the Score on Mortgage Credit

    11:11 am on October 10, 2012 | Comments:0
    Tags: , , , ,   Filed under: Buyer Info, Consumer news and advice, Credit, Interest Rates, mortgage

    (MCT)—Good credit is important, especially when you’re looking to buy a house. Mortgage lenders have to know whether you’re able to repay the debt, and have to determine through your credit history if you’re willing to pay, as well.

    They use credit scores to determine, statistically, how much of a loan you can afford, whether to approve it, and the interest rate. The scores are obtained from the three major credit bureaus: Equifax, Experian, and Trans Union.

    The most common credit score issued is the FICO, named for Fair Isaac Co., which developed the mathematical formula. Rankings are from 300 to 950: The higher the number, the lower the loan-default risk.

    (More …)

     
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  • More Buyers Choose Conventional over FHA Loans

    9:40 am on September 27, 2012 | Comments:0
    Tags: , , ,   Filed under: Buyer Info, Consumer news and advice, Credit, Federal Goverment, FHA, Finance, mortgage

    The use of mortgage financing in the housing market jumped sharply in the month of August, but the use of FHA financing declined, suggesting the government program is losing favor and private lenders are gaining market share.

    “Conventional mortgages are making a comeback while FHA mortgages are not,” commented Thomas Popik, research director for Campbell Surveys. “Reasons for the growth in conventional mortgages include low rates, increased underwriting of high LTV mortgages by private mortgage insurers, and a price structure including insurance premiums that is cheaper than the FHA alternative.”

    Mortgages were used to finance 68.9 percent of home purchase transactions in August, up from 67.5 percent in July. Significantly, not all mortgage financing products saw the same gains in market share. FHA-financed transactions rose only slightly from 25.5 percent in July to 25.9 percent in August. Back in January, FHA transactions accounted for 27.3 percent of all home purchase transactions.

    Ellie Mae reported last week that the FHA share of mortgage originations has declined from 25 percent in May to 21 percent in August. During the same period, conventional mortgages increased their sales from 65 to 70 percent of all new mortgages. Purchase mortgages increased from 44 to 47 percent.

    Real estate agents responding to the latest HousingPulse survey indicated mortgage availability has improved over the summer months, especially for homebuyers with less than 20 percent cash down payments. “Mortgages for homebuyers with less than 20 percent down were available more than in previous months,” commented an agent from California. “Contrary to media reports, there is no shortage of mortgage money available for buyers with down payments less than 20 percent,” reported an agent in Texas.

    Real estate agents also commented on historically low interest rates. “Amazing rates – less expensive to pay mortgage per month than to rent. Unbelievable opportunity and buyers know it,” exclaimed an agent in California. “The money is almost free, with 3.785 percent being about average for a 30 year fixed-rate mortgage with 3.5 percent down,” contributed an agent in Washington State.

    The National Association of REALTORS® is continuing its battle for greater access to credit. Last week NAR’s president Moe Veissi urged Fed Chairman Ben Bernanke to weigh in on three key rule proposals—the Qualified Mortgage (QM), the Qualified Residential Mortgage (QRM), and the Basel III capital standards—that Veissi said are both putting a chill on lending and have the potential tighten credit further. All three individually and certainly together have the potential to tighten credit.

    For more information, visit http://www.realestateeconomywatch.com

    http://rismedia.com/2012-09-26/more-buyers-choose-conventional-over-fha-loans/

     
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  • Home Sales and Job Creation would Rise with Sensible Lending Standards ..

    9:25 am on September 27, 2012 | Comments:0
    Tags: , , , , jobs, lending standards, , ,   Filed under: Buyer Info, Consumer news and advice, Credit, economy, Federal Goverment, Finance, Housing Market, mortgage, NAR, National Association of Realtors, Seller Info, Statistics, The Economy, The Housing Market

    WASHINGTON (September 17, 2012) – New survey findings, combined with an analysis of historic credit scores and loan performance, show home sales could be notably higher by returning to reasonably safe and sound lending standards, which also would create new jobs, according to the National Association of Realtors®.

    Lawrence Yun, NAR chief economist, said there would be enormous benefits to the U.S. economy if mortgage lending conditions return to normal.  “Sensible lending standards would permit 500,000 to 700,000 additional home sales in the coming year,” he said.  “The economic activity created through these additional home sales would add 250,000 to 350,000 jobs in related trades and services almost immediately, and without a cost impact.”

    (More …)

     
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  • New Short Sale Guidelines for GSEs Will Make Process Easier

    9:35 am on September 6, 2012 | Comments:0
    Tags: , , , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, FHA, mortgage, Seller Info, Short Sale

    Starting November 1, 2012, Fannie Mae and Freddie Mac will implement new short sale guidelines to make the approval process easier for eligible borrowers.

    “These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said
    FHFA Acting Director Edward J. DeMarco in a statement. “The new standard short sale program will also provide relief to those underwater borrowers who need to relocate more than 50 miles for a job.”

    The changes are part of the FHFA’s Servicing Alignment Initiative and will require a streamlined approach with documents, leading to a reduction in documentation requirements. For example, borrowers who are 90 days or more delinquent and have a credit score lower than 620 will no longer be required to provide documentation for their hardship.

    (More …)

     
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  • Short Sales Surging

    1:12 pm on August 2, 2012 | Comments:0
    Tags: , ,   Filed under: Agent information, Consumer news and advice, economy, Foreclosure, mortgage, Seller Info, Short Sale, Short sales, Statistics, The Housing Market

    by The KCM Crew on August 2, 2012

    The Office of the Comptroller of the Currency released their First Quarter 2012 Mortgage Metrics Report recently. In the report, they covered the success the banking industry is having in each of several categories regarding the current housing crisis. They found:

    Loan modifications 

    These are “actions that contractually change the terms of mortgages with respect to interest rates, maturity, principal, or other terms of the loan.”

    Down 36.7% from last year.

    Completed foreclosures 

    Where “ownership of properties transferred to servicers or investors. The ultimate result is the loss of borrowers’ homes because of nonpayment.”

    Up 2.7% from last year.

    Newly initiated foreclosures 

    “Mortgages for which the servicers initiate formal foreclosure proceedings during the month. Many newly initiated foreclosures do not result in the loss of borrowers’ homes because servicers simultaneously pursue other loss mitigation actions, and borrowers may act to return their mortgages to current and performing status.”

    Down 8.1% from last year.

    Short sales 

    “Sales of the mortgaged properties at prices that net less than the total amount due on the mortgages. Servicers and borrowers negotiate repayment programs, forbearance, or forgiveness for any remaining deficiency on the debt. Short sales typically have a less adverse impact than foreclosures on borrowers’ credit records.”

    Up 19.7% from last year.

    The only category up significantly is short sales. And the rate of increase in short sales is accelerating.

    http://www.kcmblog.com/2012/08/02/short-sales-picking-up-steam-2/

     
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  • Housing Finance Reform Must Provide Reliable Credit to Home Buyers, NAHB Tells Congress

    8:59 am on July 19, 2012 | Comments:0
    Tags: Congress, Home builders, mortgage regulations,   Filed under: Agent information, Buyer Info, Consumer news and advice, Credit, economy, Federal Goverment, Housing Market, mortgage, Real Estate Trends, Second Home Buyers, The Housing Market

    The National Association of Home Builders (NAHB) told Congress recently that proposed mortgage lending reforms under the Dodd-Frank Act must be imposed in a manner that causes minimum disruption to the mortgage markets while ensuring consumer protections.

    Testifying before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, NAHB First Vice Chairman Rick Judson, a home builder from Charlotte, N.C., said that “NAHB believes a housing finance system that provides adequate and reliable credit to home buyers at reasonable interest rates through all business conditions is critical to our nation’s economic health.”

    (More …)

     
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  • Buying a Home? What About Greece? The Election?

    9:01 am on June 14, 2012 | Comments:0
    Tags: , , , , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, economy, Federal Goverment, Interest Rates, International, mortgage, People, Seller Info

     by Steve Harney

    As I travel across the country speaking with thousands of agents a month, I am always amazed at the first two questions I am usually asked:

    What impact will the European economic crisis have on real estate here in the U.S.?

    Shouldn’t people wait until after the election to find out who will be the President before buying a home?

    Today, I want to tell a story about Kevin Miller who works here at Keeping Current Matters and just signed contracts on the home he and Crystal, his wife, are purchasing. Kevin got married about a year ago and recently found out that he is about to become a father. He’s a great guy who truly loves his bride and wants the best for her and their family. It is for that reason that Kevin and his wife started to look
    for a home of their own.

    What About Greece?

    Kevin and I have discussed the purchase at times and the interesting thing is the European situation never came up – not even once! It isn’t that Kevin is naive to the situation. He probably understands it better than most as he has a degree in International Business and Economics. But, he isn’t buying a house in Greece or Spain. He is buying a home in Babylon,New York – in a wonderful neighborhood with a nice backyard that his future children will play in. Does the world economy impact his purchase? Yes it does. It is one of the major reasons he is getting a 30-year mortgage rate under 4%.

    What About the Election?

    Again, it never came up. We did talk about the fact that he is buying the home for a fraction of what it would have sold for just a few years ago. We did discuss the great school district. We did talk about how convenient the neighborhood is to the things he and Crystal love. Did we talk about the election? No.

    Not that the election won’t have an impact. It was just announced that Congress will postpone its decision on the government’s role in mortgage financing until next Spring (aka until after the election). The new rules, which are anticipated to be more stringent than the current rules, won’t be enacted until after Kevin, Crystal and their child are comfortably living in their dream home financed by a 30-year mortgage at an historically low interest rate. Meanwhile, no one knows what the new mortgage requirements will even be next year.

    Is the situation in Europe important? Of course. Is this election one of the most important in our nation’s history? Many believe so. Did either of these situations enter Kevin’s mind while he was deciding to buy a home? No.

    He was too busy caring about his wife, his new child and his family’s happiness.

    http://www.kcmblog.com/2012/06/12/buying-a-home-what-about-greece-what-about-the-election/

     
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  • Mortgage Forgiveness Debt Relief Act: Will It Be Extended?

    9:23 am on May 17, 2012 | Comments:0
    Tags: , debt relief, , ,   Filed under: Consumer news and advice, Federal Goverment, FHA, Finance, Foreclosure, Home owner information, Income Tax, mortgage, Tax, Tax credit

    by The KCM Crew on May 16, 2012

    Many of our readers have asked whether or not we believe the Mortgage Forgiveness Debt Relief Act of 2007will be extended past its current expiration scheduled for the end of the year. As a reminder, the legislation ensures that homeowners who received principal reductions or other forms of debt forgiveness on their primary residences do not have to pay taxes on the amount forgiven.

    The reason this act is important in today’s housing market is that, without the act, debt is reduced through mortgage modifications or short sales qualifies as income to the borrower and is taxable. If the legislation is not extended, then it would require homeowners to complete a short sale or modification prior to year’s end in order to avoid a tax consequence.

    (More …)

     
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  • Short Sales Will Increase Dramatically in 2012

    8:49 am on May 10, 2012 | Comments:0
    Tags: , , , ,   Filed under: Buyer Info, Consumer news and advice, Finance, mortgage, Seller Info, Short Sale

    by The KCM Crew on May 7, 2012

    We believe that short sales will be a major part of the real estate market in 2012. That is why we have dedicated this entire week to posts exclusively on this subject. We hope that by the end of the week you have a better handle on the need for short sales and a better understanding of the process. – the KCM Crew

    It seems that the banks have finally realized that a short sale is a better option than foreclosure for them, the homeowner and the neighborhood. It is for this reason we believe that 2012 will come to be known as the year of the short sale. CNN Money reported on this exact point:

    “We believe 2012 could be a record year for short sales,” said Daren Blomquist, vice president at RealtyTrac.

    Banks are showing signs of being more open and willing to approve the deals — even if it means accepting less money. The average sales price for a short sale was $174,120 in January, down 4% from December and 10% year-over-year.

    Market Watch also addressed the short sale situation recently: (More …)

     
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