For the second month in a row, foreclosure activity was impacted by voluntary foreclosure suspensions, after certain practices commonly used during the foreclosure process were called into question. While initially limited to judicial foreclosure states, the so-called robo-signing controversy began impacting foreclosures in non-judicial states, including those in our coverage area in early October.
Foreclosure starts were down across the board in November, ranging from a 9.3 percent month-over-month decline in California to a staggering 31.7 percent decline in Washington. Despite the fact that robo-signing was not directly tied to foreclosure filings in non-judicial foreclosure states, foreclosure starts in our coverage area have dropped 25.5 percent since the controversy began.
Foreclosure sales continued to be impacted by robo-signing related foreclosure suspensions more directly, as Ally (GMAC), Bank of America and PNC all halted foreclosure sales nationwide, contributing to a 38.7 percent drop in foreclosure sales over the last two months within our coverage are. In November, foreclosure sales dropped the most dramatically in Washington, after having seen little impact in October; while California had the least dramatic decline with a drop of 9.0 percent. After having had the largest impact on foreclosure sales, Bank of America slowly began foreclosing again the week of December 6th. Their return will likely lead back to normal foreclosure levels in the months to come.
"Since September 2008 the foreclosure process has seen significant bottlenecks, first due to government intervention and now lender ineptitude," says Sean O'Toole, CEO and Founder of ForeclosureRadar.com. "Unfortunately the resulting delays will only serve to extend the time it takes to recover and return to a normal housing market."
Arizona
Continuing downward, Notice of Trustee Sale filings dropped 24.4 percent from October to November, reaching their lowest level since March 2008. The holidays, and issues around the robo-signing controversy, likely contributed to the significant drop. Foreclosure sales were down 14.8 percent from October to November, following a 26.9 percent decline the prior month resulting in the lowest number of sales since September 2009.
View all Arizona stats by state, county, city or ZIP
California
Foreclosure activity slowed across the board in California. Notice of Default filings dipped 9.3 percent month over month, while Notice of Trustee filings declined a mere 1.0 percent from October. Cancellations of foreclosure sales dropped 8.5 percent in November, down 54 percent from their peak in June, likely due in part to the failure of the Administration's Home Affordable Modification Program (HAMP) to help California homeowners. Foreclosure sales are down by 9.0 percent from October, though sales to 3rd parties increased by 7.8 percent.
View all California stats by state, county, city or ZIP
Nevada
Foreclosure activity in Nevada dropped dramatically over the past two months. Foreclosure sales are down 22.1 percent from October to November, and 50.5 percent from September. Notice of default filings are also down for the second month in a row, dropping 12.7 percent from October, and 24.3 percent from September. Clearly, Nevada foreclosure activity was impacted not only by the holidays, but also by the robo-signing controversy.
View all Nevada stats by state, county, city or ZIP
Oregon
Oregon's Notice of Default filings and Notice of Trustee Sale filings dropped for the third consecutive month, reaching their lowest point since Q4 2008. Notice of Default filings declined 25.0 percent from October to November, and Notice of Trustee Sale filings dropped 21.2 percent. Foreclosure sales declined 26.7 percent in November, and have dropped 54.3 percent since September. After a four month decline, cancellations of foreclosure sales increased 34.8 percent from October.
View all Oregon stats by state, county, city or ZIP
Washington
While Washington showed little impact from the robo-signing controversy in October, foreclosure activity dropped substantially in November. Notice of Trustee Sale filings dropped 31.7 percent from October, but are still up 16.2 percent from a year earlier. Similarly, foreclosure sales dropped 38.1 percent from October but are up 29.3 percent from November 2009.
View all Washington stats by state, county, city or ZIP
State Notice of Default Notice of Sale Back to Bank Sold to 3rd Party
Arizona
n/a -24.3% -17.5% -1.2%
California
-9.3% -1.0% -12.5% +7.8%
Nevada
-12.7% +3.4% -25.2% -4.7%
Oregon
-25.0% -21.2% -26.9% -23.5%
Washington
n/a -31.7% -38.7% -33.2%
Wednesday, December 15, 2010
Thursday, October 21, 2010
Is it too soon for mortgage servicers to resume foreclosure procedures?
On Monday, Bank of America spokesman said that the bank plans to resume foreclosures next week in more than 100,000 homes in the 23 states that require judge’s approval. Amid the multiple attempts from opponets to the bank’s involvement in the latest mortgage fiasco, some wonder if it is too soon for loan servicers to resume foreclosure procedures.
Although enphasys has been made on the fact that halting foreclosure will in turn slow down any progress the real estate market might be having, many still believe that a halt on all foreclosures Is the way to go.
Just last week, attorneys general in all 50 states joined together to conduct an investigation to determine whether lenders broke the law by processing uncessesary foreclosures. Furthermore, multiple law suits are surfacing around the country as homeowners realize the opportunity in the situation. Homeonwers now have a chance to dispute their foreclosure notes on the basis that the documents bakcing up the foreclosure might indeed contain errors from the lender’s part.
In adition, a federal law enforcement official says the FBI is now joing the fight against lenders that could have broken criminal laws in the mortgage foreclosure crisis. “The FBI is at the start of a lengthy sorting-out process in which agents will look into what caused the financial institutions to mishandle the flood of paperwork in the historic avalanche of foreclosures,” the law enforcement official says.
The main issue to be identified is the intent behind this so called “errors” in foreclosure douments. The idea is to figure out whether the lenders actually conducted this operations with criminal intent or if indeed the lenders just made mistakes as a result of the overwhelming overflow of foreclosures and the pressure to speed up operations which in turn would help stabilize the market even faster.
Not only is the federal government getting involved, but also the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, has demanded reviews at top banks, including Bank of America, J.P. Morgan Chase & Co. and Citigroup Inc. SEC Chairman Mary Schapiro said Tuesday her agency is looking into "issues with respect to disclosure, misrepresentations or omissions."
Furthermore, another challenge for lenders are judges around the country who are handling these foreclsoure cases. Judges have the authority to discipline bank officials If there is a violation of procedural rules. In adittion, they could also force thousands of foreclosure cases that usually just go through quick rulings, to go instead to full trials.
“Judges won't take well to banks that filed erroneous documents with their courts,” said Indiana Attorney General Greg Zoeller.
"There could be some serious consequences," including criminal charges, Zoeller said.
Although enphasys has been made on the fact that halting foreclosure will in turn slow down any progress the real estate market might be having, many still believe that a halt on all foreclosures Is the way to go.
Just last week, attorneys general in all 50 states joined together to conduct an investigation to determine whether lenders broke the law by processing uncessesary foreclosures. Furthermore, multiple law suits are surfacing around the country as homeowners realize the opportunity in the situation. Homeonwers now have a chance to dispute their foreclosure notes on the basis that the documents bakcing up the foreclosure might indeed contain errors from the lender’s part.
In adition, a federal law enforcement official says the FBI is now joing the fight against lenders that could have broken criminal laws in the mortgage foreclosure crisis. “The FBI is at the start of a lengthy sorting-out process in which agents will look into what caused the financial institutions to mishandle the flood of paperwork in the historic avalanche of foreclosures,” the law enforcement official says.
The main issue to be identified is the intent behind this so called “errors” in foreclosure douments. The idea is to figure out whether the lenders actually conducted this operations with criminal intent or if indeed the lenders just made mistakes as a result of the overwhelming overflow of foreclosures and the pressure to speed up operations which in turn would help stabilize the market even faster.
Not only is the federal government getting involved, but also the Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, has demanded reviews at top banks, including Bank of America, J.P. Morgan Chase & Co. and Citigroup Inc. SEC Chairman Mary Schapiro said Tuesday her agency is looking into "issues with respect to disclosure, misrepresentations or omissions."
Furthermore, another challenge for lenders are judges around the country who are handling these foreclsoure cases. Judges have the authority to discipline bank officials If there is a violation of procedural rules. In adittion, they could also force thousands of foreclosure cases that usually just go through quick rulings, to go instead to full trials.
“Judges won't take well to banks that filed erroneous documents with their courts,” said Indiana Attorney General Greg Zoeller.
"There could be some serious consequences," including criminal charges, Zoeller said.
Friday, October 8, 2010
B of A halts foreclosures sales in all 50 states
BofA halts foreclosure sales in all 50 states
PNC becomes 4th lender to review procedures in 23 judicial foreclosure states Friday, October 8, 2010.
Bank of America said it's extended its review of foreclosure documents to all 50 states, and will stop all foreclosure sales until the review is completed.
The ongoing assessment, previously confined to 23 states where courts have jurisdiction over foreclosures, "shows the basis for foreclosure decisions is accurate," Bank of America said in a statement.
According to its most recent quarterly report to investors, Bank of America sold $453million in foreclosed properties during the second quarter, leaving it with an inventory of properties valued at $1.74 billion.
Bank of America had previously identified the 23 states where it was delaying foreclosures as Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.
Meanwhile, PNC Financial Services Group Inc. says it's halting most foreclosures and evictions in 23 states for 30 days, bringing to four the number of lenders who have publicly acknowledged potential problems in their handling of foreclosure paperwork. PNC said it took the step so it can confirm its foreclosure procedures are in compliance with state laws.
In what's become known as the robo signing scandal, GMAC Mortgage and JP Morgan Chase are also reviewing foreclosure proceedings in judicial foreclosure states, following allegations that workers processing files for the companies signed affidavits that contained information they had not personally verified.
Although attorneys for homeowners have mostly succeeded in delaying, rather than stopping, foreclosures when challenging lenders on such procedural grounds in the past, the robo signing scandal threatens to put the brakes on hundreds of thousands of foreclosures nationwide.
State attorneys general, federal regulators and lawmakers are putting lenders on notice that they should discontinue foreclosures unless they are sure their procedures are in full compliance with the law.
The resulting slowdown in foreclosure actions could slow the flow of properties into bank's REO (real estate owned) inventories. Lenders have also begun holding back properties they have already foreclosed on from the market, because of fears that their former owners could file lawsuits questioning the legality of the court proceedings in which they lost their homes.
The American Land Title Association, a trade group representing title insurers, has said homeowners who have purchased foreclosed properties have "numerous defenses" against any claims by former owners.
It's unlikely that a court will take property from an innocent current homeowner and return it to a previous homeowner who failed to make payments on the loan subject to the foreclosure, the group said.
But some lenders and at least one title insurer appear to be seeking more certainty before moving forward with the sale of foreclosed properties.
Old Republic National Title Insurance Co. has reportedly stopped insuring title for properties foreclosed on by JP Morgan Chase and GMAC Mortgage (the company refuses to confirm or deny reports based on internal company memos, citing a "policy of not speaking to the press").
Real estate brokers in Florida, a judicial foreclosure state, told Inman News this week that loan servicers had already begun pulling many foreclosed "REO" (real-estate owned) properties off the market.
Actions by federal regulators and state attorneys general could lead more loan servicers to follow Bank of America's lead in halting sales of foreclosed properties in non-judicial foreclosure states.
In a letter to subscribers today, Foreclosure Listing Services Inc. President George Roddy Sr. shared his views on how the robo signing scandal could affect Texas, a non-judicial foreclosure state. The Addison-based company tracks about 9,000 foreclosure auction postings a month.
Roddy said that until recently, he hadn't expected actions taken by lenders in judicial foreclosure states to impact foreclosures in Texas. But that was before Texas Attorney General Greg Abbot sent letters to 30 loan servicers Tuesday, calling on them to halt foreclosures and sales of foreclosed properties until they have completed a review of their foreclosure processes.
Abbot gave loan servicers until Oct. 15 to demonstrate they are complying with state law, and identify any employees or agents who signed affidavits and other foreclosure documents without personal knowledge of what they were signing. Loan servicers were also instructed to identify any foreclosures in which such documents were used.
The next round of Texas foreclosure auctions is set to take place on Nov. 2, Roddy said, and there's no indication that loan servicers who are able comply with the attorney general's demands will be barred from putting homes up for auction.
Roddy said postings for the upcoming Nov. 2 auction remain at about the same level as at this time last month, with no signs of weakening.
"Based on many conversations with economists, politicians, lenders, etc. over the past few days, I believe that foreclosure postings will continue at the current pace or very near that level during the coming days in Texas," Roddy said. "So, for those of us involved on the 'posting' side of the equation, it should be business as usual or very near it."
Roddy compared fallout from the robo signing scandal to foreclosure moratoriums enacted during the housing downturn.
"Looking back, those moratoriums had very little effect on the volume of foreclosure postings filed during that time," he said. "What we did see were monthly posting levels that remained where they were prior to the start of the moratorium, or very close to that level, followed by a huge spike in postings that led to the current high level of this foreclosure cycle."
In California, another non-judicial foreclosure state, Attorney General Jerry Brown today called on loan servicers to halt foreclosures until they demonstrate they are complying with state law.
Attorneys general in other states including Florida, Massachusetts, Delaware, Connecticut, Ohio, Colorado, Illinois, Iowa and North Carolina are also examining lenders' foreclosure procedures. Ohio Attorney General Richard Cordray has filed suit against GMAC Mortgage (GMAC Mortgage says it expects to prevail).
Although Democrats have been the most critical of lenders' foreclosure procedures, the issue cuts across party lines.
Sen. Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee, has called on federal banking regulators to review the mortgage servicing and foreclosures activities of JP Morgan Chase, Bank of America, and GMAC Mortgage parent company Ally Financial.
Shelby said the Senate Banking Committee should also launch its own investigation, saying he was "highly troubled that once again our federal regulators appear to be asleep at the switch."
The Center for Responsible Lending and civil rights groups including the NAACP and National Council of La Raza on Thursday renewed their call for a national moratorium on foreclosures, citing doubts about procedures followed by lenders filing foreclosure proceedings.
Exercising a "pocket veto" for only the second time in office, President Obama Thursday rejected a bill, HR 3808, that critics said would help banks push homes through the foreclosure process by making courts recognize notarizations made in other states.
PNC becomes 4th lender to review procedures in 23 judicial foreclosure states Friday, October 8, 2010.
Bank of America said it's extended its review of foreclosure documents to all 50 states, and will stop all foreclosure sales until the review is completed.
The ongoing assessment, previously confined to 23 states where courts have jurisdiction over foreclosures, "shows the basis for foreclosure decisions is accurate," Bank of America said in a statement.
According to its most recent quarterly report to investors, Bank of America sold $453million in foreclosed properties during the second quarter, leaving it with an inventory of properties valued at $1.74 billion.
Bank of America had previously identified the 23 states where it was delaying foreclosures as Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.
Meanwhile, PNC Financial Services Group Inc. says it's halting most foreclosures and evictions in 23 states for 30 days, bringing to four the number of lenders who have publicly acknowledged potential problems in their handling of foreclosure paperwork. PNC said it took the step so it can confirm its foreclosure procedures are in compliance with state laws.
In what's become known as the robo signing scandal, GMAC Mortgage and JP Morgan Chase are also reviewing foreclosure proceedings in judicial foreclosure states, following allegations that workers processing files for the companies signed affidavits that contained information they had not personally verified.
Although attorneys for homeowners have mostly succeeded in delaying, rather than stopping, foreclosures when challenging lenders on such procedural grounds in the past, the robo signing scandal threatens to put the brakes on hundreds of thousands of foreclosures nationwide.
State attorneys general, federal regulators and lawmakers are putting lenders on notice that they should discontinue foreclosures unless they are sure their procedures are in full compliance with the law.
The resulting slowdown in foreclosure actions could slow the flow of properties into bank's REO (real estate owned) inventories. Lenders have also begun holding back properties they have already foreclosed on from the market, because of fears that their former owners could file lawsuits questioning the legality of the court proceedings in which they lost their homes.
The American Land Title Association, a trade group representing title insurers, has said homeowners who have purchased foreclosed properties have "numerous defenses" against any claims by former owners.
It's unlikely that a court will take property from an innocent current homeowner and return it to a previous homeowner who failed to make payments on the loan subject to the foreclosure, the group said.
But some lenders and at least one title insurer appear to be seeking more certainty before moving forward with the sale of foreclosed properties.
Old Republic National Title Insurance Co. has reportedly stopped insuring title for properties foreclosed on by JP Morgan Chase and GMAC Mortgage (the company refuses to confirm or deny reports based on internal company memos, citing a "policy of not speaking to the press").
Real estate brokers in Florida, a judicial foreclosure state, told Inman News this week that loan servicers had already begun pulling many foreclosed "REO" (real-estate owned) properties off the market.
Actions by federal regulators and state attorneys general could lead more loan servicers to follow Bank of America's lead in halting sales of foreclosed properties in non-judicial foreclosure states.
In a letter to subscribers today, Foreclosure Listing Services Inc. President George Roddy Sr. shared his views on how the robo signing scandal could affect Texas, a non-judicial foreclosure state. The Addison-based company tracks about 9,000 foreclosure auction postings a month.
Roddy said that until recently, he hadn't expected actions taken by lenders in judicial foreclosure states to impact foreclosures in Texas. But that was before Texas Attorney General Greg Abbot sent letters to 30 loan servicers Tuesday, calling on them to halt foreclosures and sales of foreclosed properties until they have completed a review of their foreclosure processes.
Abbot gave loan servicers until Oct. 15 to demonstrate they are complying with state law, and identify any employees or agents who signed affidavits and other foreclosure documents without personal knowledge of what they were signing. Loan servicers were also instructed to identify any foreclosures in which such documents were used.
The next round of Texas foreclosure auctions is set to take place on Nov. 2, Roddy said, and there's no indication that loan servicers who are able comply with the attorney general's demands will be barred from putting homes up for auction.
Roddy said postings for the upcoming Nov. 2 auction remain at about the same level as at this time last month, with no signs of weakening.
"Based on many conversations with economists, politicians, lenders, etc. over the past few days, I believe that foreclosure postings will continue at the current pace or very near that level during the coming days in Texas," Roddy said. "So, for those of us involved on the 'posting' side of the equation, it should be business as usual or very near it."
Roddy compared fallout from the robo signing scandal to foreclosure moratoriums enacted during the housing downturn.
"Looking back, those moratoriums had very little effect on the volume of foreclosure postings filed during that time," he said. "What we did see were monthly posting levels that remained where they were prior to the start of the moratorium, or very close to that level, followed by a huge spike in postings that led to the current high level of this foreclosure cycle."
In California, another non-judicial foreclosure state, Attorney General Jerry Brown today called on loan servicers to halt foreclosures until they demonstrate they are complying with state law.
Attorneys general in other states including Florida, Massachusetts, Delaware, Connecticut, Ohio, Colorado, Illinois, Iowa and North Carolina are also examining lenders' foreclosure procedures. Ohio Attorney General Richard Cordray has filed suit against GMAC Mortgage (GMAC Mortgage says it expects to prevail).
Although Democrats have been the most critical of lenders' foreclosure procedures, the issue cuts across party lines.
Sen. Richard Shelby of Alabama, the ranking Republican on the Senate Banking Committee, has called on federal banking regulators to review the mortgage servicing and foreclosures activities of JP Morgan Chase, Bank of America, and GMAC Mortgage parent company Ally Financial.
Shelby said the Senate Banking Committee should also launch its own investigation, saying he was "highly troubled that once again our federal regulators appear to be asleep at the switch."
The Center for Responsible Lending and civil rights groups including the NAACP and National Council of La Raza on Thursday renewed their call for a national moratorium on foreclosures, citing doubts about procedures followed by lenders filing foreclosure proceedings.
Exercising a "pocket veto" for only the second time in office, President Obama Thursday rejected a bill, HR 3808, that critics said would help banks push homes through the foreclosure process by making courts recognize notarizations made in other states.
Friday, September 24, 2010
What to consider before you buy a foreclosed home
In today’s market, many home buyers are attracted by the increasing number of foreclosed homes that are constantly becoming available in the market. Although foreclosed homes often present a great opportunity for buyers, foreclosed homes are not always the best option. There are many things that buyers need to consider before they decide to make an offer on a foreclosed home.
There is enough available information out there for buyers to be informed on all the negative aspects that could be involved in a foreclosure deal, but sometimes they buyers need to be reminded that this information is out there. Home buyers need to be well informed in order to take advantage of the positive aspects that some foreclosure deals do offer.
Among the issues that buyers need to deal with is title work. Buyers of a foreclosure home should get a title check even if the foreclosure buying process doesn’t account for one. Buyers need to be away that additional liens such as second mortgages and tax liens may still be attached to the property and passed on to the new buyer.
Furthermore, inspections are a great way of finding out the accurate condition of foreclosed homes. Some foreclosure properties are open to inspections, but others are not. Buyers need to be aware that many foreclose properties are not in the best condition, and most of them are sold “as is.” Since foreclosed homes often remained abandoned for long periods of times before they get sold, some may be victims of pest infestation, mold growth, and vandalism. Therefore, it is highly recommended that you always get an inspection done on any property you plan to purchase.
Another thing to consider is that a property disclosure statement is not always required, it all depends upon the state the foreclosure property is in; this in another reason why an inspection is even more necessary. It is recommended that buyers check everything from plumbing, electric wiring, foundation, etc.
These are just a few of the issues that buyers of foreclosed homes have to deal with. There are others to consider, and buyers need to do their homework in researching as much as possible before they make an offer on a foreclosed home. They must realize that foreclosed homes are not always great deals, and often times, they come accompanied by a set of problems.
There is enough available information out there for buyers to be informed on all the negative aspects that could be involved in a foreclosure deal, but sometimes they buyers need to be reminded that this information is out there. Home buyers need to be well informed in order to take advantage of the positive aspects that some foreclosure deals do offer.
Among the issues that buyers need to deal with is title work. Buyers of a foreclosure home should get a title check even if the foreclosure buying process doesn’t account for one. Buyers need to be away that additional liens such as second mortgages and tax liens may still be attached to the property and passed on to the new buyer.
Furthermore, inspections are a great way of finding out the accurate condition of foreclosed homes. Some foreclosure properties are open to inspections, but others are not. Buyers need to be aware that many foreclose properties are not in the best condition, and most of them are sold “as is.” Since foreclosed homes often remained abandoned for long periods of times before they get sold, some may be victims of pest infestation, mold growth, and vandalism. Therefore, it is highly recommended that you always get an inspection done on any property you plan to purchase.
Another thing to consider is that a property disclosure statement is not always required, it all depends upon the state the foreclosure property is in; this in another reason why an inspection is even more necessary. It is recommended that buyers check everything from plumbing, electric wiring, foundation, etc.
These are just a few of the issues that buyers of foreclosed homes have to deal with. There are others to consider, and buyers need to do their homework in researching as much as possible before they make an offer on a foreclosed home. They must realize that foreclosed homes are not always great deals, and often times, they come accompanied by a set of problems.
Major players in the mortgage market continue making changes to their loan programs
Major players in the mortgage market have been making changes to their programs in an attempt to help alleviate the risk in their portfolios and improve their financial condition. One very well known player is the Federal Housing Administration (FHA). The FHA has modified its processes in order to provide loans to as many people as possible by designing an aggressive risk reduction program.
Among the changes that the FHA has implemented is the raise for the upfront premium for its insurance from 1.75 percent of the loan amount to 2.25 percent, in April. This change in premium increases the amount of cash the borrower must bring to the table. In addition, the ceiling on annual FHA premiums was raised from 0.5 percent of the outstanding balance to 1.55 percent in August.
“ While FHA has said premiums will not hit the new ceiling, it does expect to shift some of the upfront premium increase into that fee, spreading it out in more manageable chunks,” explains reporter Jann Swanson from The Washington examiner.
“Current low interest rates are cushioning the effect of the increase in premiums,” said Christopher Gardner, president of FHA Pros, which advises condo associations seeking FHA approval. “This is especially true since the increase can be financed.”
“Even if monthly fees increase,” he said, “FHA has so many advantages and will still be a smidgen less expensive than a traditional loan.” That FHA loans can be assumed by a new owner; is like gold when it is time to sell, he added.
Furthermore, the FHA has also raised the minimum FICO score for its 3.5 percent down payment program to 580, and the minimum for all FHA-insured mortgages to 500. In addition, there has been a reduction in the allowed seller concessions. While previously a buyer was able to negotiate concessions up to 6 percent of the price of the home, concessions are now limited to 3 percent.
The concession change is also unlikely to have much effect, said Michael “Mick” Poe, an agent with Re/Max Allegiance Real Estate in Burke. “Just because you can do something,” he said, “doesn’t mean you will. In the real world, we rarely saw concessions as large as 6 percent. The number of buyers this will affect will be negligible, he added.
Among the changes that the FHA has implemented is the raise for the upfront premium for its insurance from 1.75 percent of the loan amount to 2.25 percent, in April. This change in premium increases the amount of cash the borrower must bring to the table. In addition, the ceiling on annual FHA premiums was raised from 0.5 percent of the outstanding balance to 1.55 percent in August.
“ While FHA has said premiums will not hit the new ceiling, it does expect to shift some of the upfront premium increase into that fee, spreading it out in more manageable chunks,” explains reporter Jann Swanson from The Washington examiner.
“Current low interest rates are cushioning the effect of the increase in premiums,” said Christopher Gardner, president of FHA Pros, which advises condo associations seeking FHA approval. “This is especially true since the increase can be financed.”
“Even if monthly fees increase,” he said, “FHA has so many advantages and will still be a smidgen less expensive than a traditional loan.” That FHA loans can be assumed by a new owner; is like gold when it is time to sell, he added.
Furthermore, the FHA has also raised the minimum FICO score for its 3.5 percent down payment program to 580, and the minimum for all FHA-insured mortgages to 500. In addition, there has been a reduction in the allowed seller concessions. While previously a buyer was able to negotiate concessions up to 6 percent of the price of the home, concessions are now limited to 3 percent.
The concession change is also unlikely to have much effect, said Michael “Mick” Poe, an agent with Re/Max Allegiance Real Estate in Burke. “Just because you can do something,” he said, “doesn’t mean you will. In the real world, we rarely saw concessions as large as 6 percent. The number of buyers this will affect will be negligible, he added.
Can you fix your credit score?
Given the current economic situation, many homeowners have been affected by a decline in their credit score. Low credit scores prevent many homeowners from qualifying for new or refinanced mortgages under the strict underwriting standards presented by lenders and investors such as Fannie Mae and Freddie Mac.
The decline in credit scores presents a great concern for homeowners, and many are looking for ways and opportunities to fix their credit score. Unfortunately, on the other side of the problem, we find companies that are taking advantage of the desperate homeowners. Many of these companies have managed to find ways to involve homeowners in scams that promise to fix their credit score, but in the end do nothing for them.
Most of these scamers promise the homeowner to erase delinquencies, judgments, foreclosures and other problems from files at the three national credit bureaus: Equifax, Experian and TransUnion.
We can find an example for these dealings in Florida. The Federal Trade Commission recently presented a complaint against Clean Credit Report Services Inc. of North Miami. This firm promised its clients it could increase their credit scores dramatically and quickly — even if the derogatory information in their files was accurate and current.
Furthermore, in national radio ads, Internet and TV commercials, Clean Credit said it could make records of "late payments, collection accounts, charge-offs, repossessions and bankruptcies" disappear from credit files, according to the FTC's complaint.
Using testimonials of so called “clients” the firm managed to convince the struggling homeowners to fall into their trap. The firm allegedly claimed that the target for clients was a 650 to 700 FICO score at the end of the file-scrubbing process.
The FTC reported that those who fell into the trap, had to pay up-front fees averaging $400; however, after the payment the company did "little, if anything, to fulfill the promises made" about increasing credit scores and purging negative files. Many of the customers who had to deal with this unfortunate situation, filed complaints with state and local authorities, and the FTC — which oversees the Credit Repair Organizations Act — then took on the case.
Moreover, in the FTC settlement, Clean Credit and its officers agreed to forfeit substantial assets to help repay Clean Credit clients. The agreement also requires that the firm and its principals pay $14.4 million for restitution in case the financial statements they submitted for settlement purposes prove to be inaccurate.
The decline in credit scores presents a great concern for homeowners, and many are looking for ways and opportunities to fix their credit score. Unfortunately, on the other side of the problem, we find companies that are taking advantage of the desperate homeowners. Many of these companies have managed to find ways to involve homeowners in scams that promise to fix their credit score, but in the end do nothing for them.
Most of these scamers promise the homeowner to erase delinquencies, judgments, foreclosures and other problems from files at the three national credit bureaus: Equifax, Experian and TransUnion.
We can find an example for these dealings in Florida. The Federal Trade Commission recently presented a complaint against Clean Credit Report Services Inc. of North Miami. This firm promised its clients it could increase their credit scores dramatically and quickly — even if the derogatory information in their files was accurate and current.
Furthermore, in national radio ads, Internet and TV commercials, Clean Credit said it could make records of "late payments, collection accounts, charge-offs, repossessions and bankruptcies" disappear from credit files, according to the FTC's complaint.
Using testimonials of so called “clients” the firm managed to convince the struggling homeowners to fall into their trap. The firm allegedly claimed that the target for clients was a 650 to 700 FICO score at the end of the file-scrubbing process.
The FTC reported that those who fell into the trap, had to pay up-front fees averaging $400; however, after the payment the company did "little, if anything, to fulfill the promises made" about increasing credit scores and purging negative files. Many of the customers who had to deal with this unfortunate situation, filed complaints with state and local authorities, and the FTC — which oversees the Credit Repair Organizations Act — then took on the case.
Moreover, in the FTC settlement, Clean Credit and its officers agreed to forfeit substantial assets to help repay Clean Credit clients. The agreement also requires that the firm and its principals pay $14.4 million for restitution in case the financial statements they submitted for settlement purposes prove to be inaccurate.
Popular tax credit for first time homebuyers might be coming back
The Obama administration has not yet decided whether it should bring back a popular tax credit for first-time homebuyers, Housing and Urban Development Secretary Shaun Donovan said on Sunday.
"It's too early to say whether the tax credit will be revived," Donovan said in an interview on CNN's "State of the Union" program. He said the administration would "do everything we can" to stabilize the shaky U.S. housing market.
The analysis is based on the previous federal $8,000 homebuyer tax credit that boosted home sales reviving parts of the housing market. This credit expired several months ago, and things started going down.
The unexpectedly large drop in U.S. home sales in July has brought back fears that the nation could be on the cusp of another sharp drop in housing.
Donovan acknowledged that the data was worse than the Obama administration expected but said the government was already taking measures, including rolling out a refinancing program for some borrowers and an emergency loan program for the unemployed.
Some believe that bringing back the tax credit would help improve the current housing situation. However, those that oppose this idea, say it would blow a bigger hole in the federal deficit.
"I think it would help enormously," Florida Governor Charlie Crist, who is running as an independent for the U.S. Senate in the November elections, told CNN. "I would absolutely encourage the president to support that." His opinion was supported by U.S. Representative Kendrick Meek, a Florida Democrat, who said he also supported reviving the tax credit.
Last month, Obama signed a law giving consumers already in the process of buying a home three extra months to close the deal and still get the tax credit.This means that homebuyers with contracts signed by April 30 who failed to go to closing by the original June 30 deadline will now have until September 30 to complete their purchases.
"It's too early to say whether the tax credit will be revived," Donovan said in an interview on CNN's "State of the Union" program. He said the administration would "do everything we can" to stabilize the shaky U.S. housing market.
The analysis is based on the previous federal $8,000 homebuyer tax credit that boosted home sales reviving parts of the housing market. This credit expired several months ago, and things started going down.
The unexpectedly large drop in U.S. home sales in July has brought back fears that the nation could be on the cusp of another sharp drop in housing.
Donovan acknowledged that the data was worse than the Obama administration expected but said the government was already taking measures, including rolling out a refinancing program for some borrowers and an emergency loan program for the unemployed.
Some believe that bringing back the tax credit would help improve the current housing situation. However, those that oppose this idea, say it would blow a bigger hole in the federal deficit.
"I think it would help enormously," Florida Governor Charlie Crist, who is running as an independent for the U.S. Senate in the November elections, told CNN. "I would absolutely encourage the president to support that." His opinion was supported by U.S. Representative Kendrick Meek, a Florida Democrat, who said he also supported reviving the tax credit.
Last month, Obama signed a law giving consumers already in the process of buying a home three extra months to close the deal and still get the tax credit.This means that homebuyers with contracts signed by April 30 who failed to go to closing by the original June 30 deadline will now have until September 30 to complete their purchases.
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