Alright, so the real estate market is closed until fall so catch-up on some summer reading…
Biggest Defaulters on Mortgages Are the Rich. The article reports that 1 in 7 million dollar plus loans are now seriously delinquent compared to 1 in 12 in the below million dollar loan market. Surely these folks are seeing job losses like the rest of the economy but they’re also likely more quick to walk away from an investment property or simply being savvy about dropping a bad investment.
Fannie Mae gets tough on homeowners who walk away. Interesting “get tough” talk from Fannie Mae first about seeking delinquency judgments against borrowers who walk away from a home but can afford to pay the mortgage. Also, Fannie Mae also said it would make new
mortgages harder to obtain for borrowers if it can be proved that they engaged in a “strategic default” — abandoning a home to foreclosure not because the required payments are unaffordable but because the mortgage is larger than the value of the residence. For such a borrower, Fannie said it would not buy or guarantee another home loan for seven years. Borrowers who worked in good faith with their loan servicers to try to stay in their homes would be barred from Fannie loans for only two or three years, even if they eventually lost their homes after attempts at loan modifications failed. How will Fannie determine when there has/hasn’t been a “strategic default”??
V.A. Loans Harder to Get. No surprise as the VA loan market has tightened with the general mortgage market. VA loans have typically been rather friendly because the federal government’s Veteran’s Affairs Department insures a quarter of these loans to lenders. Major lenders like Bank of America, Citigroup and JPMorgan Chase, typically will not offer V.A. loans to borrowers with credit scores below 610. Debora Blume, a spokeswoman for Wells Fargo, said the cutoff score for her bank’s V.A.-insured loans was 600.
How to Start (And Survive) As a Mortgage Broker. Well, for starters there’s a lot less competition than a few years back…there are 2/3rds fewer mortgage brokers today than 2007.
He launched his business in 2007 with a relatively small capital investment, spending about $4,000 for equipment, services and other basic necessities. To this day, he has no employees and works primarily with lenders with whom he already has relationships, from large players such as Wells Fargo & Co. to smaller, established lenders like Flagstar Bank in Troy, Mich. Mr. Huettner makes money in three ways: by charging borrowers a fee, charging bankers a fee or a combination of the two.
He stands apart from competitors, Mr. Huettner says, by specializing in mortgages for customers with complex financial situations, such as self-employed individuals, second-home buyers and anyone dealing with tricky life matters.
Find a NICHE, great business advice always!
FHA Health Better than Expected. Here, here and 3 cheers for the Federal Housing Administration and the stronger-than-expected performance of FHA-backed loans.
Delinquencies on FHA-backed loans rose slightly to 12.4 percent in May from 11.7 percent in April, but were down from 13.6 percent a year earlier after stronger-than-expected performance in the first half of 2010.
Personally I think the performance of FHA is rather impressive considering the dramatic increase in their usage from the height of the boom years up to now.
FHA and Fannie Mae Getting Tougher on Reverse Mortgage Borrowers. Not a surprise, the reverse mortgage market has been greatly hurt due to home value depreciation. A rare time of government actually squeezing seniors.
Here’s a sobering message for anyone who has a federally insured reverse mortgage or plans to apply for one: If you don’t pay your local property taxes or hazard insurance premiums, you should know that the risk of losing your house to foreclosure is about to increase.
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Jul 14 2010