After a year of negotiating a historic joint state-federal settlement with the country’s five largest loan servicers was reached. On February 9, Attorney General Kamala D. Harris announced that California secured up to $18 billion for its distressed homeowners as part of a $25 billion national multistate settlement with Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo.
Financial benefits for California include:
For more information: http://oag.ca.gov/nationalmortgagesettlement
Could you or someone you know benefit from this settlement?
Contact me to get started. Relief is closer than you think.
Have you installed a Carbon Monoxide detector?
Carbon Monoxide detectors have been required in all houses (1 – 4 units) if they have any of the following since July 1, 2011:
All lenders require that you meet the criteria for the Carbon Monoxide Poisoning Prevention Act. Your appraiser will be required to check for a functional detector in your home. Carbon monoxide detectors can be bought at most home improvement stores for about $20.
After a year of negotiating a historic joint state-federal settlement with the country’s five largest loan servicers was reached. The $26 billion dollar settlement with Ally/GMAC, Bank of America, Citi, JPMorgan Chase and Wells Fargo will provide relief to distressed borrowers in the states who signed on to the settlement and direct payments to signing states and the federal government. Key Provisions of the Settlement:
To find out more information: National Mortgage Settlement
Not quite ready to do a short sale? There may be another option to refinance... Unlimited LTV relief. Fannie Mae's DU Refi-Plus™ to UNLIMITED LTV starting Feb 19th The Refi-Plus™ program offers the following benefits:
*Check eligibility here: www.fanniemae.com
Call now to get started: 408-985-6400
Confused by all the jargon that gets thrown around by mortgage brokers, lenders and real estate agents? Here is a breakdown of some of the most common terms:
1.
An interest rate that that may change over the life of the loan, and the essence of an Adjustable Rate Mortgage or ARM. Some rates vary according to an established financial index such as COFI—the Cost of Funds Index—typically adding a set “margin” of percentage points.
Appraisal:
A report expressing the estimated value of a property based on a comparison of similar saleable properties. Also, the act of appraising a property.
Assumable mortgage:
A loan that can be transferred with a sold property to a new buyer.
2. Balloon payment:
A final lump sum payment, typically larger than previous payments, due at the end of balloon-type loan.
3. Collateral:
Property pledged as security for a debt, such as real estate that secures a mortgage. Collateral can be repossessed if the loan is not repaid.
Conventional loan:
A mortgage loan not insured or guaranteed by a federal government entity such as the Federal Housing Administration.
4. Deed:
A document that legally transfers ownership of property from one person to another. The deed is recorded on public record with the property description.
Deed of trust:
Used in some states, it serves the same purpose as a mortgage. It conveys “title” to a real estate property to a disinterested third (a trustee), who holds the title until the owner of the property has repaid the debt.
Dude:
A guy who purchases property and then records the deed.
5. Escrow:
A third-party financial instrument to hold funds on behalf of the other two parties in a transaction. In a real estate transaction, if there are conditions to the sale such as passing an inspection, the buyer and seller may agree to use an escrow account. Once the conditions are met, the escrow transfers the payment to the seller and title is transferred to the buyer.
6. Fixed-rate mortgage:
A mortgage with payments that remain the same throughout the life of the loan. The interest rate is fixed (unlike an adjustable rate).
7. Good faith:
Refers to settlement charges paid by a by the borrower at closing. A Good Faith Estimate of the charges is required by The Real Estate Settlement Procedures Act.
8. HELOC:
Home Equity Line of Credit—usually a second mortgage allowing the borrower to obtain cash against the equity of a home up to a predetermined amount.
HUD:
The U.S. Department of Housing and Urban Development, created to address public housing needs, improve and develop American communities, and enforce fair housing laws.
HUD-1:
Also known as the "settlement sheet," it itemizes all closing costs such as real estate commissions, loan fees, points, and escrow amounts.
9. Interest-only mortgage:
A mortgage in which, for period of time, the monthly mortgage payment consists of interest only. During that period, the loan balance remains unchanged.
10. Jumbo loan:
Also called a non-conforming loan, it is a loan above a certain dollar amount. In 2009, the amount for single-family homes in most states was $417,000. Above that limit, the loan is ineligible to be purchased by the Federal National Mortgage Association (Fannie Mae) or the Federal Home Loan Mortgage Corporation (Freddie Mac).
11. Lien:
A legal claim against a property that must be paid off when the property is sold. A lien is created when you borrow money and use your home as collateral for the loan.
Loan-to-value ratio:
Expressed as a percentage, the amount of the loan divided by the value of a property. For example, if you have a $120,000 mortgage against a $200,000 home, the LTV is 60 percent.
12. Mortgage:
The instrument used to pledge title to a property as security for repayment of a debt.
13. Owner-occupied:
Used to describe a home occupied by a borrower or a member of the immediate family as a primary residence—as opposed to a rental property. The distinction significantly affects mortgage rates.
14. PITI:
Principal, Interest, Taxes, and Insurance—the four elements of a monthly mortgage payment.
Points:
Mortgage industry synonym for “one percent,” typically of the principal loan amount. To pay an origination fee of two points on a $100,000 loan, for example, you’d pay $2,000 to the lender.
15. Quitclaim deed:
An instrument transferring ownership of a property, typically with no guarantee of an unencumbered “clear” title.
16. Realtor®:
A real estate broker or associate with an active membership in the National Association of Realtors®. Not all brokers are Realtors®.
Reverse mortgage:
An instrument used by senior homeowners age 62 and older to convert the equity in their home into a monthly stream of income.
17. Survey:
A measurement description of land prepared by a registered land surveyor. Typically it shows the property’s dimensions and its location relative to known landmarks, plus the location and dimensions of any improvements.
18. Title:
The evidence to the right to, or ownership of, property.
Title insurance:
A policy that guarantees the accuracy of a title search and protects against errors. Most lenders require the buyer to purchase title insurance to protect the lender against loss in the event of a title defect. This charge is included in the closing costs.
19. Underwriting:
The process of analyzing a loan application to determine the amount of risk involved in making the loan; it includes a review of the potential borrower's credit history and a judgment of the property value.
20. VA loan:
A loan guaranteed by the U.S. Department of Veterans Affairs as a benefit to military veterans.
21. Warranty deed:
A legal document which guarantees that the seller is the true owner of the property and has the right to sell the property.
22. Yield curve:
A graph that compares long-term lending rates to short-term rates. Lenders “borrow short” at lower rates to “lend long” at higher rates. A “steep” curve spells bigger profits for lenders.
23. Zero-down mortgage:
A loan that finances 100 percent of the purchase price.
Refinancing is most often motivated by lower interest rates, which can bring the dual benefit of lower mortgage payments and lower interest costs over time. But there are many other legitimate motivations. Some are a product of "creative" financing products such as Adjustable Rate Mortgages that were rare a generation ago. Your personal priorities will drive decisions on how to refinance. There is no "one-size-fits-all" solution, but here are a few reasons why you might want to refi.
Lower payments: When rates fall, it's always tempting to refi. A common rule of thumb is that a two-point drop in rates will make it worthwhile. But this is not universal. For a homeowner with a $300,000 balance, a rate reduction of even one percent can lower the monthly payments by a couple hundred bucks and cut long-term interest expenses by hundreds of thousands.
A common mistake with this strategy, however, is to "start over," and refinance, a 17-year-obligation with a new 30-year loan. Sure, stretching out the term will lower the payments, but wasn't the interest rate help enough for you? Don't be greedy. When you choose the term of a new loan, think about some day getting out of debt.
A quicker payoff: This is often a worthy goal, if you can afford somewhat higher payments. Replace a 30-year-term with 15 years, and obviously you'll be out of debt sooner - and won't have to double your payments to do it. They'll rise by about 40 percent (assuming here that both loans are at about 6 percent interest). Conversely, choose the ease of a 30-year term and the payments will go down a lot less than you'd expect.
Lower interest costs: Locking in a better fixed rate is great, but it is not the only way to lower interest bills. ARMs, or Adjustable Rate Mortgages, generally offer lower rates in the early years followed by higher ones later. It can be a fool's game to think you can defer your big bills until later in life, but if you plan to be in the house for just a few years or less, an ARM may make a lot of sense.
Cash out: Liquidating the equity in a home became a national pastime in the last housing boom. Creative loan products and rapidly rising home values often made it easy to refi (at a lower rate if you were lucky) and walk away with a satchel full of cash. Taking cash out of your mortgage can be an entirely legitimate way to consolidate other debts. The downside was that gains in equity were in some cases an illusion, driven by a housing market bubble - and this way, you'll never be able to pay off the property.
For more information
This is the number one issue on any creditor's list. A pattern of slow, late, or missed payments will knock down an applicant's credit score faster than bowling pins on Ladies League Night. Your ability to pay is huge, determined in large part by your income and other competing debts. But there is also willingness to pay. And against all odds, even with crushing debt-to-income ratios, there are some people who always manage to make the Mastercard payment. An unblemished payment record can partially offset negatives elsewhere. Your payment history is perhaps 35 percent of your total creditworthiness.
In the underwriter's eyes, pushing your credit limits is a cardinal sin. It's better to have two accounts at half-limit levels than one maxed out. Some say 30 percent is the ideal debt-to-limit ratio on a revolving account, so consider juggling three cards if that's what it takes.
You can't change your age. But you can get started on the path to creditworthiness at a young age by opening a Visa account and faithfully paying off the balance each month. Never borrow money needlessly, but if it makes all-around sense, consider a car loan. A two-year track record of on-time payments will greatly raise your standing among potential mortgage lenders.
It's also preferable to have a variety of credit types such as mortgages, credit cards, car loans, and personal lines of credit. A diversified mix is characteristic of someone with a long credit history.
Note the two key words—"proof" and "income." Your hard work as a landscaper may buy you a nice living, but unless you file a 1040 at tax time, you'll be having a lot of short conversations with loan officers. Even in an age when contracting and freelancing is widely accepted, conventional employees with "W-2" pay stubs have a leg up over the self-employed.
Assets go a long way to offset lenders' fear of risk. A property leveraged at 80 percent is less worrisome than one at 95 percent. And a six-figure 401(k) balance is a comfort too, even if they can't come after the money. It gives you options other than defaulting on a loan.
A red flag goes up if your loan request is preceded by a flurry of credit applications elsewhere, especially if they were successful. Can you pay the mortgage if you're also financing a new boat? Rapid expansion of credit can signal desperation and the start of a downward debt spiral if someone's income isn't sufficient to pay the bills.
For the more details check out the Trulia article here
A home loan is the biggest debt and monthly expense most of us will ever have. That's why the 7 biggest mistakes borrowers make when shopping for a home loan can be so costly and aggravating.
Mortgage Mistake 1. Wondering if you paid too much for your home loan.
Mortgage Mistake 2. Applying for a loan without checking your credit reports for errors.
Mortgage Mistake 3. Not getting preapproved for a home loan.
Mortgage Mistake 4. Saddling yourself with payments you can't afford.
Mortgage Mistake 5. Blowing all of your savings on the down payment and closing costs.
Mortgage Mistake 6. Ignoring state programs for first-time home buyers.
Mortgage Mistake 7. Missing nasty surprises in your good faith estimate.
Click here to see how you can easily avoid these mistakes.
Good news for California homeowners that are struggling to make their mortgage payments. The federally funded state program, Keep Your Home California, has relaxed many of its restrictions.
The program has $2 billion in federal funds to assist California homeowners that are having trouble making house payments. 8,000 homeowners have already received assistance, using only $150 million of the allotted $2 billion.
The new relaxed standards for the program include:
*Mortgage servicers are required to make matching contributions, about 50 servicers, covering 85% of mortgages in California are participating
For more information call 888-954-KEEP (5337) or
visit www.keepyourhomecalifornia.org/
Not just yet... The Senate has approved an amendment that would put the conforming loan limit back up to $729,750. Previously the conforming loan limit increase expired and went down to $625,500.
If the House also approves the amendment, the conforming loan limit of $729,750 will last through 2013.
For more details click here
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