Closing Chicago Real Estate

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Can Living Near a Train Station Save you From Foreclosure? Well, this piece reported on some research which found that mortgage default rates were higher in locations without ready access to public transportation. Not too surprising as we’ve seen gas prices spike over the last few years. Some interesting discussions about “location efficient” mortgages too. Personally I’m very glad I’ve never been a “car person” and scaling back to one car in our family shortly after my wife and I got married has been a great and relatively easy move for us.

Citi Lets Distressed Homeowners Stay 6 Mos. Free. Hey, foreclosure ain’t a bouquet of roses but this seems like a positive step. Under the recently announced program, eligible delinquent homeowners must have their primary mortgage owned by CitiMortgage and must first be considered for a permanent loan modification. If that is not possible, a short sale will be considered. If neither of those alternatives works, the homeowner could stay in the home for up to six months and at the end receive $1,000 in a cash-for-keys transaction. Program participants also would undergo financial counseling. The program is not being offered to borrowers who have second mortgages on their properties.

FHA Changing Policy on Credit Score, Down Payment. No surprise as FHA loans increased by nearly 100% in 2009 from 2008. To be able to make a down payment of just 3.5 percent on an FHA-insured loan, home-buyers would have to have a minimum FICO credit score of 580, rather than the current 500 FICO outlined in FHA guidelines. New borrowers with less than a 580 score would have to put down 10 percent on a home purchase. The FHA also will increase the upfront mortgage insurance premium to 2.25 percent of the total loan amount, from 1.75 percent. I’ve been rather impressed with FHA’s ability to handle its renewed prominence…they were a non-factor 4 years ago.

Florida asks FEMA to Provide Help in Chinese Drywall Problems. This Chinese drywall endemic in some of the southern U.S. is eye-opening. Florida reports some 2,500 homeowners impacted by this problem. If you haven’t been following the issue too closely, defective, Chinese-imported drywall used to build new homes primarily in the southeastern U.S.  I recall Sean Payton’s home, the New Orleans Saints coach, was impacted by the problem. Again, what’s the worst type of residential real estate to buy?

They Padlocked my Parrot. Squawk, Squawk. Well, I’m not a car guy nor a pet guy but who doesn’t appreciate some litigation against an abusive lender. And the borrower wasn’t even near foreclosure…she wasn’t behind on a single payment. Wonderful business practices, NOT!

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Comments (0) Mar 14 2010

That’s the article title here from The Times. I hear a bit too much about credit scores than I want too and I think it’s absolutely the worst category of e-mail spam, but when it’s mortgage time you do need to be ready. And this is definitely new-to-me information:

¶ 35 percent is determined by your payment history. Do you regularly pay your bills or fines on time to any creditor that submits your information to the credit bureau? Even unpaid library fines, medical bills or parking tickets may appear here.

¶ 30 percent is based on the amounts you owe each of your creditors, and how that compares with the total credit available to you or the total loan amount you took out. If you’re maxing out your credit cards, your score may suffer.

¶ 15 percent is based on the length of your credit history, both how long you’ve had each account and how long it’s been since you had any activity on those accounts. The fewer and older the accounts, the better (assuming you’ve made timely payments).

¶ 10 percent is based on how many accounts you’ve recently opened compared with the total number of your accounts, as well as the number of recent inquiries on your report made by lenders to whom you’ve applied for credit. Your score can drop if it looks as if you’re seeking several new sources of credit — a sign that you may be in financial trouble. (If a lender initiates an inquiry about your credit report without your knowledge, though, it should not affect your score.) Shopping around for an auto loan or mortgage shouldn’t hurt, if you keep your search to six weeks or less. But every inquiry you trigger when you apply for a credit card can affect your score, says Craig Watts, a spokesman for Fair Isaac. So be selective.

¶ The final 10 percent is determined by the types of credit used. Having installment debt — like a mortgage, in which you pay a fixed amount each month — demonstrates that you can manage a large loan. But how you handle revolving debt, like credit cards, tends to carry more weight since it’s seen as more predictive of future behavior. (You can pay off the balance each month or just the minimum, for example, charge to the limit of your cards or rarely use them.)

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Comments (0) Jun 24 2009