Archive for Mortgage

Foreclosures Gone Wrong

By Kembala Evans on October 6, 2010

How would you feel if the house you paid for in cash was foreclosed? Picture the house you own (no mortgage) being seized by the bank, all of your possessions removed and the locks changed. You’ve become a victim of foreclosures gone wrong.

Paying cash for something (especially a house) gives you an unbelievable sense of ownership. And to have that feeling stripped away from you in such a manner as a home foreclosure is completely heartbreaking.

The foreclosure process is already hard to endure, but imagine going through it when it’s not your fault. Homeowners experiencing the brutal reality of this situation — are living a nightmare.

This problem has been widespread across lenders like Bank of America, GMAC and JPMorgan Chase. Some banks have voluntarily halted foreclosures to correct the issues in the foreclosure process. While state attorney generals (Florida, Texas, California, Connecticut and others) have asked lenders to stop foreclosures or opened up investigations into their questionable foreclosure practices.

The flaws in the foreclosure process are negatively impacting the lives of real people, who are undeservingly being locked out of their own homes. The foreclosure errors are largely attributed to employees signing off on foreclosures without verifying the accuracy of the paperwork (Is the mortgage current?) and lenders foreclosing on the wrong address.

Read more on Foreclosures Gone Wrong:

Photo: respres

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Categories: Mortgage, News

New Obama Short Refinance Mortgage Assistance Program

By Kembala Evans on September 9, 2010

President ObamaEarlier this week on September 7th, 2010 the Obama administration launched a new “short refinance” mortgage assistance program. This program targets homeowners that are current on their mortgage and underwater. Essentially, these homeowners owe more than their property’s worth.

According to HUD.gov:

“Starting September 7, 2010, the Federal Housing Administration (FHA) will offer certain ‘underwater’ non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage.”

“We’re throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined,” said FHA Commissioner David H. Stevens. “This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”

The “short refinance” program reduces mortgage balances for homeowners. Yes, that’s right. Through the program lenders can reduce the amount you owe on your home. The new mortgage is written down to less than the current value of the property and backed by the government in a Federal Housing Administration (FHA) loan.

A few key highlights of the new “short refinance” program’s eligibility requirements*:

  • Homeowner must be current on mortgage
  • Homeowner must owe more than their property is worth
  • Homeowner must meet FHA underwriting requirements and have a credit score of 500 or above
  • Homeowners must live in the property as their primary residence
  • The current mortgage must not be an FHA loan

* Click here for detailed program information from HUD.gov.

If you’re interested in applying for the program, contact your lender.

Read the Wall Street Journal’s article Government to Deploy Broader Mortgage Aid for more details about the program.

What are your thoughts on the new Obama administration “short refinance” program? Do you think it will help or hurt the real estate market?

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Categories: Mortgage

Mortgage Rates Dip Again – Is Refinancing Worth it?

By Kembala Evans on August 9, 2010

It’s the perfect market for homebuyers – record low mortgage rates and attractive home prices. On the other hand, existing homeowners are feeling less enthusiastic about the current market conditions with foreclosures, short sales and home prices falling. The good news for homeowners is the fact that mortgage rates dip again to record breaking lows.

Now with mortgage rates dipping below 4% on 15-year mortgages the question on some existing homeowners’ minds: Is refinancing worth it?

Let’s take a closer look at the benefits of refinancing:

  • Pay Off Your Home Earlier – Switching from a 30-year to a 15-year fixed rate mortgage cuts your repayment period in half. Reducing your mortgage term saves you money in interest and enables you to build equity quicker. Keep in mind that your monthly payment is more likely to increase when you reduce your repayment period.
  • Save Money – Refinancing your home with a lower interest rate could save you thousands of dollars.
  • Locking in a Low Fixed Rate Mortgage – If you have an Adjustable Rate Mortgage (ARM), converting to a low fixed rate mortgage allows you to take advantage of a lower interest rate throughout your loan repayment period.
  • Lower Mortgage Payments (Monthly Savings) – A lower interest rate mortgage can reduce your monthly payments. Allan Kunigis’ article, “Should you Stretch Out a Refinance?” offers tips for those considering a refinance to lower their monthly mortgage payments.

Some important considerations for refinancing your home:

  • Existing Mortgage Terms – Review your current mortgage terms (interest rate, number of years left on current mortgage, etc.). This information is necessary (more…)
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Categories: Mortgage, Save Money

Mortgage Rates Hit a New Low

By Kembala Evans on May 25, 2010

Yesterday I read an interesting article on Yahoo Finance, “Mortgage Rates at New Lows, Thanks to Europe’s Debt Crisis.” We’re accustomed to hearing about low mortgage rates, but these rates have hit a new low!

How low are mortgage rates now? It has been reported that mortgage rates are at a 30 year low. Remember timing is everything because mortgage rates change.

If you’re in the process of buying a new home, then locking in these low rates is a good thing.

Existing homeowners may be able to refinance and save money. Depending on your current mortgage terms (e.g. interest rate), refinancing could reduce your payment and mortgage term. To determine if refinancing your home is the right answer for you:

  • Compare your current interest rate with today’s mortgage rates. Bankrate.com is a great place to start. Call your current lender, bank, credit union or other lenders to get mortgage rate quotes. Be sure to ask about any additional fees (e.g. closing costs).
  • Consider changing your current mortgage terms. For example, if you took out a 30-year mortgage in 1995, it is better to refinance with a 15-year or less mortgage. If you have an adjustable rate mortgage now, then taking advantage of the low fixed rate mortgage is ideal.
  • Do your research. One example is using mortgage calculators to give you insight into the costs and potential savings. Refinance calculators can help you answer many questions: Where will you break even on the cost to refinance? How much will you save? Many websites offer refinance calculators. A few I’d recommend are:
    1. Bankrate.com
    2. TheStreet.com
  • If your home value is less than what you owe, visit makinghomeaffordable.gov to find out if you qualify for the “Home Affordable Refinancing” program.

What has worked for you in deciding whether to refinance?

Photo: woodleywonderworks

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Categories: Mortgage, Save Money

Help for Homeowners Facing Foreclosure

By Kembala Evans on May 18, 2010

Although the stock market and other economic indicators are showing positive signs of a rebound, the reality of home foreclosures continue to impact homeowners across the nation. To combat this reality, there are efforts underway to help homeowners save their homes. Read CNNMoney.com article, “States have radical ideas to stop foreclosure” to learn about what some states are proposing.

If you’re facing foreclosure, consider these options:

  • Visit makinghomeaffordable.gov to find out information about government programs that may help you stay in your home. This site also offers you tips to avoid home foreclosure scams (e.g. businesses charging for home consultation or loan modification services).
  • Contact your lender to discuss your situation and to understand the options available. For example, refinancing your mortgage, loan modification, renting the property, etc.
  • Attend free home foreclosure prevention counseling service events.

Do you have any other tips for homeowners facing foreclosure?

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Categories: Mortgage
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