AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/6 Ways to Get a Great Mortgage Dealhttp://realestate.aol.com/blog/2012/04/30/6-ways-to-get-a-great-mortgage-deal/http://realestate.aol.com/blog/2012/04/30/6-ways-to-get-a-great-mortgage-deal/http://realestate.aol.com/blog/2012/04/30/6-ways-to-get-a-great-mortgage-deal/#commentsFiled under: , ,

mortgage great dealBy Ismat Sarah Mangla,
Money Magazine

Finding an affordable house is no longer a problem but qualifying for a mortgage can be. Here are six tips to getting a mortgage and a good rate.

1. Put your credit on ice.

The higher your credit score, the lower your rate: The best rates go to those with a 760 or more, says credit-score expert John Ulzheimer.

So keep that plastic in your wallet (and don't apply for new cards or other loans) for at least three months before you go loan shopping. One large balance -- even if it's paid off at the end of the month -- can ding your score by 20 points or more.

2. Ask for time.

Most sales contracts give you only 10 days to nab a loan or the seller can move on. Negotiate for an additional five to 10 days to give you some room to shop around.

3. Get at least six quotes.

Rates on a 30-year fixed conforming loan can vary at least as much as a quarter of a percentage point. Get quotes from national lenders at mortgagemarvel.com and find out what your local credit union or regional bank is offering as well. Inquire about fees; while lenders aren't required to give you a good-faith estimate of closing costs (which average 2 percent of the loan balance) until you actually apply, some will provide it if you ask.

4. Match the lock period to the loan.

You now need 60 days or more to close a loan, says Wharton professor and mortgage expert Jack Guttentag of mtgprofessor.com, and getting an extension on a lock will cost at least a couple of hundred dollars. Ask your lender how long it's taking to close loans like yours -- and don't lock for less.

Understanding Adjustable Rate Mortgages



















5. Opt for an ARM.

If you know you're not going to be in a house for more than seven years, adjustable-rate mortgages can mean big savings, says Guttentag. The monthly payment on a $300,000, seven-year ARM at the recent rate of 3.23 percent is $1,302, vs. $1,455 for a 30-year fixed at 4.13 percent.

6. Talk to a broker.

Those who need a jumbo loan or have an unusual situation (say, you're self-employed) will get the best deal from a mortgage broker who has access to and experience with a lot of lenders. Find a fee-only one at upfrontmortgagebrokers.org.

Read more on CNNMoney:
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]]>credit home mortgagegetting a mortgage dealJack Guttentagmortgage advicemortgage great dealshopping for mortgagetips getting mortgageCNNMoney2012-04-30T13:30:00+00:00Loan Thaw? Average Mortgage Up by $20,000, Study Sayshttp://realestate.aol.com/blog/2012/04/12/home-loan-thaw-average-mortgage-up-by-20-000-study-says/http://realestate.aol.com/blog/2012/04/12/home-loan-thaw-average-mortgage-up-by-20-000-study-says/http://realestate.aol.com/blog/2012/04/12/home-loan-thaw-average-mortgage-up-by-20-000-study-says/#commentsFiled under: ,

By Kerri Panchuk

The average loan size that lenders issued to borrowers in the past three months grew by $20,000, suggesting a thawing in mortgage lending, Capital Economics said Wednesday.

While the report, which was released by Capital Economics analysts Paul Dales, Paul Diggle and Amna Asaf, stopped short of calling the good news a full lending recovery, Dales said, "it may be an early sign that buyer confidence is improving."

In 2012, the average amount of a mortgage went from around $215,000 to $235,000. The higher loan amounts are not the only positive economic indicator highlighted by the research firm.

Capital Economics reported a 20 percent drop in visible home inventory over the past 18 months, resulting in a situation where a months' supply of unsold homes is now at a level where existing home sales can support current prices. At the same time, Capital Economics believes there are currently 3.9 million homes in the nation's shadow inventory.

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Even though employment numbers fell below the average analyst's expectation of 200,000 new jobs in March, Capital Economics is more optimistic with the current three-month new jobs average sitting at 212,000 positions.

"We are not too alarmed by the 120,000 rise in payroll employment in March, which was exactly half the 240,000 gain in February," Dales wrote. "Just as the unusually mild weather meant that employment grew at a faster rate than the underlying trend in the previous few months, it may now be growing at a slower rate than the underlying trend."

Even though mortgage rates grew slightly in March, Capital Economics said the uptick will have little effect on housing activity since prices still remain affordable and undervalued.

The researchers believes there are signs in the market of a price bottom, but said significant home price gains are not expected in the near term since tighter lending restrictions are prohibiting a boom in real estate activity.

Read more on HousingWire:
Fannie, Freddie and the FHA Lead Surge in Multifamily Lending
Mortgage Applications Fall 2.4% as Purchases, Refinances Decline
RealtyTrac: Foreclosure Filings Fall to 4Q 2007 Level

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]]>average home loanaverage mortgageaverage mortgage amountaverage mortgage increasesCapital EconomicsCapital Economics housingCapital Economics mortgagesHousingWire2012-04-12T12:02:00+00:00House of the Day: Luxury by Lake Tahoehttp://realestate.aol.com/blog/2012/04/03/house-of-the-day-luxury-by-lake-tahoe/http://realestate.aol.com/blog/2012/04/03/house-of-the-day-luxury-by-lake-tahoe/http://realestate.aol.com/blog/2012/04/03/house-of-the-day-luxury-by-lake-tahoe/#commentsFiled under: ,



This $6.785 million residence, located in the luxurious Martis Camp community of North Lake Tahoe, Calif., boasts four bedrooms, 5½ baths, and an incredible array of cutting-edge amenities -- including a home iPad interface system and hydronic heating throughout the flooring.

The master suite, which offers commanding views of majestic arboreal wilderness, includes a fireplace and spa-inspired bath. The lower level features a recreation-media room, complete with a surround-sound system and a bar, as well as a 1,000-bottle wine cellar and an exercise den. Moveable glass walls divide the living room from an outdoor patio and walk-out terrace, which offer extensive outdoor entertaining space including a spa, fire pit, dining area and landscaped lawn. Furnishings throughout are a combination of the rustic and the ultramodern.

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As if this all weren't enough, Martis Camp residency offers several extra layers of luxury, including an 18-hole golf course, and a family recreation center with swimming, bowling, basketball, cinema and art. Finally, the community includes 26 miles of private trails for hiking, snowshoeing and cross-country skiing.

Brian Hull of Martis Camp has the listing.

Click on the images below to see more homes for sale near Lake Tahoe, Calif.



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Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email krisanne.alcantara@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to reply to each submission.)

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]]>home of the dayhomes for sale in North Lake TahoeHouse of the DayLake Tahoe luxury homesLake Tahoe real estateEamon Murphy2012-04-03T06:00:00+00:00Mortgage Principal Reduction on Freddie Mac Loans?http://realestate.aol.com/blog/2012/03/26/freddie-mac-principal-reductions-may-be-headed-homeowners-way/http://realestate.aol.com/blog/2012/03/26/freddie-mac-principal-reductions-may-be-headed-homeowners-way/http://realestate.aol.com/blog/2012/03/26/freddie-mac-principal-reductions-may-be-headed-homeowners-way/#commentsFiled under: ,

By Jon Prior

Freddie Mac CEO Charles "Ed" Haldeman gave a strong signal Friday that new incentives from the Treasury Department may be enough to start principal reduction on mortgages backed by the government-sponsored enterprises.

In January, the Treasury said it would triple incentive payments to mortgage investors who allow principal reduction in Home Affordable Modification Program workouts. The payouts ranged between six and 21 cents to the investors for each dollar forgiven under HAMP, but that will grow to between 18 and 63 cents.

"I have to say recently the Treasury sweetened the program and tremendously increased the incentive payments in their offer to us," Haldeman said at HousingWire's REThink Symposium. "We will reevaluate that to see what may be in our economic best interest. If there are very large incentive payments -- which could be 50 percent of what you could write down -- it may be in our economic self-interest to participate in that."

There are currently 11.1 million borrowers who owe more on their mortgage than the house is worth, according to CoreLogic. Of that, estimates show roughly 3.3 million of those mortgages belong to Fannie and Freddie.

The GSEs and their regulator, the Federal Housing Finance Agency, long shunned principal reduction. Their biggest fear is moral hazard -- that borrowers who are still current on their underwater loan would strategically default in order to get principal written down.

"We thought principal reduction could have unintended, secondary consequences on other borrowers seeking the same kind of reduction," Haldeman said.

One previous analysis showed the GSEs would take significant credit losses if a wide-scale program was put in place. A new analysis from the FHFA, which would cover the new HAMP incentives, is expected to be released in the coming weeks.

NPR and ProPublica reported Friday that the analysis will show a reversal, that principal reduction will work for the GSEs under the new version of HAMP.

"As we complete the review, the public should understand that Fannie Mae and Freddie Mac continue to offer a broad array of assistance to troubled borrowers and have continued to implement HARP 2.0 to enhance refinancing opportunities for underwater borrowers," FHFA said in a statement.

Treasury Secretary Timothy Geithner told a House panel this week he and FHFA Acting Director Edward DeMarco were working out their differences.

Haldeman, who announced in October that he would leave his post at Freddie, said the principal reduction verdict will ultimately reside with DeMarco, but he isn't operating on his own.

"At the end of the day, we are in conservatorship, and he is the conservator. But the way it works on a day-to-day basis is that it's a very close collaboration. It is extremely rare that I had a different point of view than Ed DeMarco," Haldeman said.

Read more on HousingWire:
Fannie and Freddie could reverse course on principal reductions
Negative equity gap nears $4 trillion
BofaA offers distressed homeowners a chance to stay in homes

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U.S. Mortgage Rates Rise With Improving Job Market

 

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]]>ed haldemaned haldeman freddie macfannie maefannie mae principal reductionsfreddie macfreddie mac principal reductionsHAMP incentivesHome Affordable Modification Programmortgage principal reductionHousingWire2012-03-26T10:45:00+00:00'Project X' Copycat Revelers Allegedly Wreck $500,000 Homehttp://realestate.aol.com/blog/2012/03/15/project-x-copycat-revelers-allegedly-wreck-500-000-home/http://realestate.aol.com/blog/2012/03/15/project-x-copycat-revelers-allegedly-wreck-500-000-home/http://realestate.aol.com/blog/2012/03/15/project-x-copycat-revelers-allegedly-wreck-500-000-home/#commentsFiled under: ,



It didn't take long before the carnage in the hit house-party movie "Project X" spilled onto the real real estate market.

Thirteen teenagers are being questioned for their possible involvement in a wild house party that will cost the builder nearly $100,000 in repairs, reports KHOU in Houston, Texas.

"It's devastating. This is a new home that was ready to sell," said private investigator Mark Stephens, who was hired by the homebuilder to observe the property. Stephens estimates the home to be worth $500,000.

A tour of the once pristine, 4,000-square-foot-home today reveals gaping holes in the walls, heaps of broken glass and liquor bottles strewn across the property.



Stephens told KHOU that the night after the property was vandalized, he returned to the neighborhood in the hope of catching the culprits in the act. Just down the street, in another vacant home, he came upon a group of teenagers throwing another massive party.

Police took 13 teenagers into custody, with two minors being young enough to be released back to their parents.

Stephens said that when he asked the teens why they broke into the home, they simply said "Project X."

Yet this isn't the first time the riotous teen flick reportedly has inspired copycat revelry. Another party in Houston turned deadly after an unidentified teen was shot multiple times at an illegal party in another vacant home, ABC News reports. The party, which drew between 500 to 1,000 high school and college-age students, was shut down by police, but the gunman reportedly escaped on foot.

Idle Hands, Empty Homes

An underlying problem in these and other cases of home vandalism is the glut of vacant homes sitting idle on the market. As foreclosures have flooded local real estate inventories, vacant properties have attracted all manner of blight, lowering property values and putting more financial stress on already struggling neighborhoods.

And the vacancy problem could continue to rise. Despite a new report that shows a 13 percent drop in completed foreclosures in the first month of this year, as compared to January 2011, there are signs that foreclosures could soon rise. With the $25 billion mortgage settlement finally underway, experts expect foreclosure activity to increase through 2012, as banks begin to clear a massive backlog of disputed foreclosures. One in every 637 homes received a foreclosure filing in February, according to RealtyTrac.

In Houston, where both wild parties took place, one in every 689 homes received a foreclosure notice in February -- up nearly 10 percent from the previous month.

Also see:
Renters Beware: Fraudsters Still Lurking on Craigslist
'Home Alone' House Sells for $1.6 Million

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]]>foreclosure crisisforeclosure vandalismhouston project xproject xproject x copycatproject x partyproject+x+copycatsproject+x+partiesprojectxcopycatsprojectxpartiesvacant homesvandalismAOL Real Estate Editors2012-03-15T12:44:00+00:00Arthur Livingston, Thought Dead by Bank, Very Alive and Frustratedhttp://realestate.aol.com/blog/2012/02/08/arthur-livingston-thought-dead-by-bofa-very-alive-and-frustrat/http://realestate.aol.com/blog/2012/02/08/arthur-livingston-thought-dead-by-bofa-very-alive-and-frustrat/http://realestate.aol.com/blog/2012/02/08/arthur-livingston-thought-dead-by-bofa-very-alive-and-frustrat/#commentsFiled under: ,



Rumors of Arthur Livingston's demise have been greatly exaggerated -- and they're taking a toll on the South Carolina man's credit rating.

Bank of America, Livingston's bank of choice for the past 14 years, mistakenly declared him dead to the three major credit bureaus in May 2009, TV station WIS in Columbia, S.C., reports. As a result, Livingston has been stonewalled by lenders -- who refuse to loan money to the deceased -- and his dream of building a new home stymied by a 2½-year-old error.

Livingston said Bank of America promised to resolve the issue within 30 days of his complaint. It's been more than three months now and the problem has yet to be resolved, he told WIS.

"I spend every free minute I have either sending a message, calling, faxing or just, you know, wondering if it is going to be resolved today," he told the station.

While Livingston's case is an extreme example, credit report errors are a very common -- and costly -- problem for Americans looking for a line of credit.

According to the U.S. Public Interest Research Group, one in four reports can have an error serious enough to hurt one's chances of getting new credit. This is especially troublesome for prospective homebuyers today as mortgage lenders have, since the housing bubble burst, drastically raised the bar on qualifying for a loan.

Tips to Avoid a Costly Credit Report Error

The most basic step to protecting your credit score is regularly checking in with the three major credit bureaus. And contrary to a slew of popular commercials claiming to provide free credit reports, the only federally endorsed credit reporting site out there is annualcreditreport.com.

Once an error is identified, be prepared to maneuver through an entirely different bureaucracy. "Thousands of [dispute] letters get thrown out," Glamis Haro, a lending manager at a New York credit union, told AOL Real Estate.

To ensure that your complaint isn't lost to the void, Haro suggests sending any correspondence with the credit bureaus by certified mail with a return receipt request.

Under the Fair Credit Reporting Act, the bureaus are required to respond to your complaint within 30 days of receipt.

In Livingston's case, however, because Bank of America has yet to correct the error on their end, his options remain limited. Bank of America told WIS that the issue is under investigation, but resolution has yet to be reached.

See also:
How to Dispute Credit Report Errors
Bank of America Plaza to Sell at Foreclosure Auction
80 Cent 'Typo' Almost Cost Man Home

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]]>Arthur Livingston bankBank of America mistakenly declares man deadcredit applicationcredit ratingcredit rating errorscredit rating mistakescredit reporting errorsmistakenly declared deadAOL Real Estate Editors2012-02-08T19:00:00+00:00New Credit Score Will Tell Lenders More About Youhttp://realestate.aol.com/blog/2011/10/21/new-credit-score-will-tell-lenders-more-about-you/http://realestate.aol.com/blog/2011/10/21/new-credit-score-will-tell-lenders-more-about-you/http://realestate.aol.com/blog/2011/10/21/new-credit-score-will-tell-lenders-more-about-you/#commentsFiled under: ,



Mortgage lenders will soon have access to new details about a prospective borrower's past -- such as past rental applications, inquiries to pay-day lenders, and missed child support payments -- that will be factored in to a new credit score.

Real estate and mortgage data aggregator CoreLogic says it's signed an agreement to work with Fair Isaac Corp., the owner of the widely used FICO score, to develop new credit risk scores for the U.S. mortgage industry.

Much of the data CoreLogic collects on consumers hasn't been available from traditional credit reporting agencies but is important to mortgage lenders, the company said.

CoreLogic says it will serve as a "supplemental credit repository," augmenting data provided by TransUnion, Equifax and Experian with property ownership and mortgage obligation records, property legal filings and tax payment status, rental applications and evictions, inquiries and charge-offs from pay-day and online lenders, and consumer-specific bankruptcies, liens, judgments and child support obligations. The Santa Ana, Calif.,-based company will generate a CoreScore Credit Report for lenders to alert them to bad debts that might previously have gone undiscovered. The reports may also help some consumers by identifying previously hidden credit history that reflects well on them, the company said.

CoreScore consumer information will be "instantly merged" with traditional credit report data "in a single, integrated report only available from CoreLogic," the company said in announcing the new reports last week.

At that time, it was unclear whether the CoreScore reports would also be used to calculate borrower's FICO scores.

Today, CoreLogic and Fair Isaac announced that they plan to offer mortgage lenders a "credit scoring solution" that will combine data from CoreScore reports with Fair Isaac's FICO 8 Mortgage Score. That product will serve as the basis for future solutions that "deliver additional loan level insight and support more intelligent and consistent lending decisions," the companies said.

A spokeswoman for CoreLogic told Inman News that the FICO 8 Mortgage Score "will likely be an input" to a new score that will be provided along with the CoreScore Credit Report. There are no plans to update the FICO 8 Mortgage score itself to use the additional CoreLogic data, she said.

So lenders purchasing services from CoreLogic Credco will get back two scores: The score or scores they use for decisions today, such as the FICO 8 Mortgage Score or classic FICO score, plus a new score that uses the value of FICO 8 Mortgage Score and the CoreScore data.

"By blending the unique data from CoreLogic with the analytic expertise of FICO, we will be able to deliver a new and more predictive credit score with our recently launched CoreScore Credit Report," said Tim Grace, senior vice president of Product Management and Analytics for CoreLogic, in a statement. "Together, this new credit report and credit score will provide the mortgage industry with increased visibility into consumer credit behavior and improved credit risk analysis."

More from Inman News:
Top U.S. Areas With Rising Real Estate Prices
Real Estate Reality TV Family Publishes Fictional Novel
Top 6 Reasons Mortgage Applications Are Rejected

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]]>CoreLogiccredit reportcredit scoreequifaxexperianfair isaacFair Isaac CorporationFICO scoresTransUnionInman News2011-10-21T08:00:00+00:00'Mortgage Prof': 5 Reasons Banks Would Rather Foreclosehttp://realestate.aol.com/blog/2011/10/18/mortgage-prof-why-banks-foreclose-instead-of-settling-for-les/http://realestate.aol.com/blog/2011/10/18/mortgage-prof-why-banks-foreclose-instead-of-settling-for-les/http://realestate.aol.com/blog/2011/10/18/mortgage-prof-why-banks-foreclose-instead-of-settling-for-les/#commentsFiled under: , , , , , ,



"Why won't the bank just reduce the amount of my loan instead of taking my home and then selling it to someone else for way less than I would have been happy to pay?" It's a question that gets asked repeatedly these days, especially by people who are facing foreclosure or are upside down on their mortgages.

For the answer, we turned to Jack Guttentag, the Mortgage Professor and Inman columnist.

Guttentag believes that lenders have been too stingy when it comes to reducing loan balances. Private lenders have offered loan reductions only sparingly, he says, and Fannie Mae and Freddie Mac not at all.

Here's the professor's take on why homeowners can't catch a break on loan reductions.

1. The buck stops there.

The decisions to reduce principal loan amounts are made by the firms that service mortgages -- the same folks who brought the country the robo-signing scandal. As servicing firms, anything they decide must be in the financial interest of their client -- that's your lender, not you. If they depart from customary practice -- and writing down loan balances is a departure from customary practice -- the buck stops with them, Guttentag says. In other words, who's going to take the risk of reducing Joe Homeowner's loan amount and then have to explain it to the boss? To take Nancy Reagan out of context: They just say no.

2. Banks are in the business of making money.

No lender is going to write down the balance of a loan in default just because you owe more than the home is worth. Truth is, there is no benefit to the lender to helping Joe Homeowner keep his house instead of selling it to the next guy. Plus, to help Joe would eliminate the possibility that the bank could also get a deficiency judgment against him. Banks are in this for the squeeze and think of Joe as just the orange. Nothing personal, of course.

3. In this economy, you will likely default anyway.

Sure, you want to believe that the economy is going to turn around and the value of your home will again rise to what you paid for it. After all, hasn't listening to a fairy tale been a surefire way to fall asleep?

From the lender's standpoint, the only reason to write down a loan balance is that it will reduce the chance that you will default. And evidence has shown that people who are heavily underwater -- that's deep in negative equity territory -- are more likely to default than those who aren't. Truth is, negative equity discourages people from making their mortgage payments. They figure: Why keep throwing good money after bad?

4. Banks are short-staffed and the staff they do have is untrained.

Most interactions between mortgage borrowers and servicers are handled by computers or relatively unskilled employees, says Guttentag. Borrowers in serious trouble are referred to a smaller number of more skilled and specialized employees, but until you enter the red zone, you are likely to encounter frustration.

Guttentag says that at the onset of the mortgage crisis, servicers were caught short-handed and the sheer volume of foreclosures in the pipeline hasn't allowed them to catch their breath.

5. Mortgage insurance works against you.

When mortgages carrying mortgage insurance go to foreclosure, banks are protected up to the maximum coverage of the policy, which generally is enough to cover all or most of the loss. This discourages modifications, says Guttentag. Why would a bank do a modification for $15,000 if the $40,000 foreclosure cost is going to be paid by the mortgage insurer? Even if the insurance coverage falls short of the foreclosure cost, the shortfall has to exceed the modification cost before modification becomes financially more attractive.

So there you have it. A five-point plan for keeping homeowners on the hook for that hefty loan balance.

Also see:
Viewpoint: Where's Housing in the 'Occupy' Protests?
Mortgage Mod Hell: Trapped Between Lenders, Collectors
The Mortgage Fix That Can Save the Economy


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]]>foreclosuresJack Guttentagloan reductionsmortgage loan modificationmortgage modificationsmortgage profmortgage professorprincipal loan reductionsprincipal mortgage loan reductionsAnn Brenoff2011-10-18T14:00:00+00:00Viewpoint: Where's Housing in the 'Occupy' Protests?http://realestate.aol.com/blog/2011/10/05/viewpoint-wheres-housing-in-the-occupy-protests/http://realestate.aol.com/blog/2011/10/05/viewpoint-wheres-housing-in-the-occupy-protests/http://realestate.aol.com/blog/2011/10/05/viewpoint-wheres-housing-in-the-occupy-protests/#commentsFiled under: , , ,



Did the voices of the housing crisis just get swallowed up by the anti-Wall Street protests? Marches, sit-ins and confrontations with police -- all part of the Occupy Wall St. movement that organizers say was birthed organically and fed through social media outlets -- are happening in major cities across the country. Without question, windows across America have opened and, just like in the movie "Network," people are shouting "I'm mad as hell and I'm not going to take it anymore!"

The only problem is that homeowners caught in the foreclosure crisis also stuck their heads out those windows and save for a fleeting few seconds, the take-to-the-streets protests have ignored them in favor of taking corporate greed to task. Nowhere on the main Occupy Wall St. website is housing even mentioned. (Pictured above are protesters in Los Angeles.)

Before you accuse us of wearing blinders, it's worth noting that just a few weeks ago, a coalition of community groups called The New Bottom Line organized a nationwide 10-city protest aimed at stopping foreclosures, demanding that banks reduce principal loan amounts of all underwater mortgages and that Wall Street stop hoarding the trillions of dollars it got in stimulus money and start funding small business' efforts to create jobs. Hallelujah to that, we say.

Seeing commonality with the Occupy Wall St. troops, The New Bottom Line demonstrators have joined forces with the faster-spreading Occupiers. The New Bottom Line co-director Tracy Van Slyke says that the excitement generated by the larger protests taking place will transfer energy -- over time -- to relief for housing. Let's hope so. The millions of displaced families who lost their homes to foreclosures deserve a voice shouting on their behalf.

Where The New Bottom Line had been focused on the housing struggles facing the lower and middle class, Occupy appeals to a younger demographic -- those hard hit by rising unemployment and emotionally about as far away from losing a family home to foreclosure as you can likely be.

About all they have in common is anger, which ultimately may be enough.

Also see:
Foreclosed Homeowner 'Booby-Traps' Home
Realtors' Latest Challenge: A Surge of Squatters
Foreclosure Rescue Scammers Busier -- and Trickier -- Than Ever

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]]>Occupy Wall StreetThe New Bottom LineAnn Brenoff2011-10-05T08:00:00+00:00Low Interest Rates No Help to Housing Markethttp://realestate.aol.com/blog/2011/08/16/low-interest-rates-no-help-to-housing-market/http://realestate.aol.com/blog/2011/08/16/low-interest-rates-no-help-to-housing-market/http://realestate.aol.com/blog/2011/08/16/low-interest-rates-no-help-to-housing-market/#commentsFiled under: ,



With unemployment high, markets on a hair trigger and the memory of Washington debt-ceiling gridlock still fresh, many Americans are reluctant to put their money toward any venture that could be less than fully secure.

Despite efforts on the part of the White House and the Federal Reserve to encourage borrowing and spending, many consumers and investors are less than eager to take the kinds of risks that could stimulate economic growth -- even as the economy risks entering a new recession. With businesses hesitant to hire workers, and with consumers hesitant to make big purchases, fears about the state of the economy could make the economy worse.

Last week, the Fed announced it would be keeping interest rates near zero through the middle of 2013, a policy meant to spur borrowing and keep the economy from slowing to a standstill. But many consumers remain skittish about taking on new debt, especially if they already have loans to pay off, the New York Times reports.

In the housing market, the low rates appear to have resulted in few new mortgage refinancings so far, according to NPR. The housing sector has been plagued by falling home prices for the last five years, and its recovery is seen as a precondition to the broader economic recovery.

Read the full story at The Huffington Post.


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]]>interest ratesmortgage refinancingmortgagesrefinancingThe Huffington Post2011-08-16T11:00:00+00:00Cutoff Date for Relief Loan Applications Fast Approachinghttp://realestate.aol.com/blog/2011/07/05/cutoff-date-for-relief-loan-applications-fast-approaching/http://realestate.aol.com/blog/2011/07/05/cutoff-date-for-relief-loan-applications-fast-approaching/http://realestate.aol.com/blog/2011/07/05/cutoff-date-for-relief-loan-applications-fast-approaching/#commentsFiled under: , ,

Washington is acting to rescue tens of thousands of beleaguered homeowners by offering interest-free loans, some of which will ultimately be "forgiven" if borrowers follow the rules.

But the pre-screening deadline for applicants is July 22, so interested homeowners must move fast. Click here to get started.

Coming out of the budget of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the $1 billion allotted for the Emergency Homeowners' Loan Program is expected to help about 30,000 of them, reports The Washington Post.

But qualifying for the relief program is not easy. Among other conditions, applicants must be unemployed or underemployed, 90 days behind on mortgage payments and have received a foreclosure notice.
Homeowners who qualify for the program -- which is offered only in 32 states -- receive a loan enabling them to meet up to two years or $50,000 worth of mortgage payments. The loan requires no payments for five years, as long as borrowers contribute 31 percent of their income or at least $150 to their mortgage payments. After that, the magic starts: The government reduces the loan balance by 20 percent each year until, poof -- no more loan.

MSN Money offers a more thorough breakdown of the program.

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]]>Dodd-Frank Wall Street Reform and Consumer Protection ActEmergency Homeowners Loan Programforeclosureinterest-free loanTeke Wiggin2011-07-05T13:45:00+00:00Your Facebook Status: Foreclosedhttp://realestate.aol.com/blog/2011/06/17/your-facebook-status-foreclosed/http://realestate.aol.com/blog/2011/06/17/your-facebook-status-foreclosed/http://realestate.aol.com/blog/2011/06/17/your-facebook-status-foreclosed/#commentsFiled under: , , , , ,

facebook foreclosedForeclosure via Facebook? With roughly 4 million foreclosures in the pipeline in this country, some legal experts say it's just a matter of time until lenders win the right to serve foreclosure documents through the giant social network.

That day has already come for one couple in Australia. When they defaulted on a six-figure loan and couldn't be found via a physical address or email, the lender's enterprising lawyers located them on Facebook. The lawyers were able to verify the couple's identities by matching up their names and birthdates -- and, of course, the fact that they had "friended" each other.

Australian courts upheld the lender's right to send foreclose notices via Facebook, citing the fact that the couple didn't enable privacy protections on their Facebook accounts and were frequent enough visitors to the site that they would "reasonably receive notice as a result."



While Marc Rotenberg, president of the Electronic Privacy Information Center in Washington, says he is unaware of Facebook being used in the U.S. to deliver legal notifications, but "it's bound to happen," he said. "The real concern the courts have is whether it's a fair notice that the person actually receives." According to Bloomberg BusinessWeek, courts in New Zealand, Canada and the U.K. already have adopted the Australian example to avoid having cases stall when people can't be located and served in person.

"There are people who exist only online," Joseph DeMarco, co-chair of the American Bar Association's criminal justice cyber crime committee, told the publication. The ability to serve documents by social-media networks would be useful, he said.

Facebook has taken heat before about its policies protecting the personal data of its 694 million users worldwide. Following the case in Australia, which happened in 2008, company spokesman Barry Schnitt said the company was pleased to see the Australian court validate Facebook as a reliable, secure and private communication medium. (Facebook did not respond to messages left by AOL.)

Is it appropriate to use social networks to find people and deliver legal papers to them via the network?

"No one likes to receive a legal service," said Rotenberg. Legal service, after all, usually isn't good news: Someone wants you for something. And yes, he adds, "There are going to be privacy concerns, but in some respects they're almost inescapable."

Email, by contrast, is generally not considered by courts to be a safe or reliable way to deliver legal notices. We get too much email, much of it winds up in spam and we don't always open everything in our in-boxes. Legal notices delivered this way can easily be discounted with a simple "I didn't see the email."

But Facebook, said Rotenberg, is different. If you don't have thousands of friends and you regularly post status updates indicating that you are active on the site, you lose the excuse that you likely overlooked the notice. Of course not everyone with a Facebook page visits the site regularly, but save it for the judge whether you're one of them.

Bottom line: It's probably going to be determined to be legal, just not likely to be popular. And should use of Facebook as an electronic process-server escalate as a norm, you can expect it would have some adverse impact on the site's participation levels. In the meantime, if you don't want the banks to find you, the best defense is enabling your privacy settings on Facebook and be mindful of the personal data you post.

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]]>Electronic Privacy Information CenterfacebookForeclosuresLegal noticesMarc Rotenbergprivacy protectionsprocess serverAnn Brenoff2011-06-17T13:37:00+00:00Require 20% Down on a House? Hong Kong Tried Thathttp://realestate.aol.com/blog/2011/06/14/require-20-down-on-a-house-hong-kong-tried-that/http://realestate.aol.com/blog/2011/06/14/require-20-down-on-a-house-hong-kong-tried-that/http://realestate.aol.com/blog/2011/06/14/require-20-down-on-a-house-hong-kong-tried-that/#commentsFiled under: , ,



As U.S. regulators fool with the idea that homebuyers should put 20 percent down on home purchases, they need only look across the sea to see what happen when a similar plan was put in place in Hong Kong recently: Sales at 10 of the island-nation's largest home developments fell almost 60 percent the week after the government raised the minimum down payments and deposits for foreign buyers.

Anyone need further proof that requiring $60,000 cash to buy a $300,000 house is going to further dent buyer enthusiasm? At least in Hong Kong, the measure was intended to slow the pace of sales -- something we surely don't need more of here. The Hong Kong government has made several attempts to curb the inflation of home values, including raising mortgage interest rates. This most recent measure was aimed specifically at foreign buyers; about a third of luxury home transactions in the first quarter of this year came from overseas or mainland China.

But the results do provide a good indicator of what the U.S. housing market can expect if the 20 percent rule -- part of the 376 pages of proposed changes known as the Qualified Residential Mortgages package or QRM -- kicks in: Buyers go away.

The proposal made this spring by a group of federal agencies would require a 20 percent down payment, limit to one-third a borrower's debt payment and extend the most-favorable loan rates to only those with excellent credit. Regulators reason that if borrowers had to put down 20 percent of the home's value, they would have more "skin in the game" and be less likely to walk away from the loan.Perhaps what they didn't reason was that just fewer people would be able to buy a house. Public reaction to the 20 percent down requirement was swift, and negative; public comment was extended to Aug. 1.

"If we require 20 percent down payments to get a loan, we will ensure broad swaths of working- and middle-class people will not be able to get a loan," John Taylor, chief executive of the National Community Reinvestment Coalition, told the Washington Post. The NCRC advocates an extension of credit to low- and moderate-income borrowers.

The QRM is an overreaction to the mortgage crisis caused primarily by toxic loans -- the so-called "liar loans" and optional adjustable rate mortgages that put people into homes they couldn't afford, said David Berenbaum, Chief Program Officer for the NCRC. The default rate for 30-year fixed rate loans has been less than one percent, regardless of the size of the down payment. And of all the loans written in 2009, only 30.5 percent would have met the new proposed standards.

Should homebuyers be required to put 20 percent down?
Yes.28 (31.1%)
No.59 (65.6%)
That's still not enough.3 (3.3%)


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]]>down paymentmortgagesnewsQRMQualified Residential MortgagesAnn Brenoff2011-06-14T16:00:00+00:00Case-Shiller: Why the Sky Isn't Fallinghttp://realestate.aol.com/blog/2011/06/02/case-shiller-the-sky-isnt-falling/http://realestate.aol.com/blog/2011/06/02/case-shiller-the-sky-isnt-falling/http://realestate.aol.com/blog/2011/06/02/case-shiller-the-sky-isnt-falling/#commentsFiled under: , , , ,

case shillerCount me among the unpanicked over the Standard & Poor's/Case-Shiller monthly housing index that shows housing values have dipped past a low set during the Great Recession. I'm not even getting goosebumps over the chilling words "housing double-dip."

Nope. For the 70 million home-owning Americans who don't have a need to sell their homes at the moment, this is not the end of the world. Yes, they can thank their lucky stars that they still have jobs and didn't get ensnared in a toxic mortgage. And yes, they can feel for their friends and family who weren't so fortunate -- or, if they are feeling less charitable, weren't as smart as they. But for the bulk of Americans, this is a problem that, well, doesn't hit that close to home.

Want perspective? Of the 75 million owner-occupied homes in the U.S., about 5 million were sold in the past year, which means that there were tens of millions of home owners who were content to stay put, paying their bills and living obliviously to the drops in home prices. Of those five million sales last year, about one third were distressed sales.

Currently, there are 3.87 million homes on the market. In April, distressed homes were 37 percent of sales (24 percent foreclosures and 13 percent short sales). And 7 percent of new listings were foreclosures, but they've been entering the pipeline at a steady pace and selling quickly at bargain prices, says the National Association of Realtors.

Of course, scary Case-Shiller numbers are nothing new. Since last June, when a yearlong rebound in prices began to sputter out, the index has recorded losses every month. If there's a bright spot, it's that in the last quarterly report, all 20 cities tracked showed declines; in the most recent index, two of the 20 actually showed month-over-month improvement.

And for the record, the experts back in December offered the same explanations as did the experts commenting on this week's report: The large number of foreclosures on the market and the expiration of the federal homebuyer tax credit are pushing prices down.

I'd throw in an even larger reason that the experts gloss over: Lenders aren't lending money to even qualified buyers. They have imposed unrealistic standards for those applying for mortgages and then wonder where all the buyers are. Maybe they should look for them under the mountains of paperwork that they keep demanding and misplacing. Seriously, has anyone tried to get so much as a refinance lately?

NAR says, albeit more politely than I do, that "the recovery is uneven, held back by unnecessarily tight credit." The association projects that "if the lending community simply returned to the safe, sound standards that were in place a decade ago (before the lax standards that led to the unprecedented boom-and-bust cycle), home sales would rise 15 to 20 percent over current projections." Now wouldn't that be nice?

Home Prices Drop to Record Low



















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]]>Case ShillerGreat Recessionhome prices declineAnn Brenoff2011-06-02T07:00:00+00:00Short Sales: Nightmare or a Path to Financial Solvency?http://realestate.aol.com/blog/2011/05/24/short-sales-nightmare-or-a-path-to-financial-solvency/http://realestate.aol.com/blog/2011/05/24/short-sales-nightmare-or-a-path-to-financial-solvency/http://realestate.aol.com/blog/2011/05/24/short-sales-nightmare-or-a-path-to-financial-solvency/#commentsFiled under: , , , , , ,

short saleShort sales, the hot potatoes of the real-estate market, are becoming easier to handle. Over the next three years, look for the number of short sales and mediations to grow, as the last reset of those toxic adjustable-rate mortgages comes due and major banks and their servicing divisions get more cooperative.

But throwing a line to upside-down homeowners isn't happening out of the goodness of lenders' hearts. They've just figured out that it's a smarter way to do business.

Michelle D. Plevel, broker and short sales division consultant with Chase International, says that over the past three years, lenders have learned that letting homes go into foreclosure left them holding properties that continued to devalue, and in many cases degenerated physically when left unoccupied. Not to mention the public pressure against allowing foreclosed homes to blight neighborhoods and decrease property values. "Lenders have realized that a short sale is much better," said Plevel.

The biggest obstacle is servicing time: How long it takes the lender to approve the short sale, especially if there's more than one lender involved. That can scare off a potential buyer. (At a recent short sale symposium for real estate agents, Housing Pulse reported that it takes, on average, three potential buyers to make a short sale stick.) And since short sale properties are sold "as is," there's also some uncertainty about what you're buying.

A Breeding Ground for Alligators?

Julie Escobar, a single mom of three teenage daughters, bid on a $149,000 Tampa, Fla., short sale last year so that she could take advantage of the tax credit offered to first-time home buyers. "The paperwork was a long process," she said, "but for me, the scariest part was the condition of the house. What was I buying?"

Her biggest fear was what lurked in the "black swamp" in the yard -- the in-ground pool. "It was pure sludge," she recalled, perfect conditions for those Florida alligators. She'd heard that some sellers, angry about losing their homes, use the pool as a receptacle for everything, including car engines, washing machines and household trash.

Escobar closed escrow in 60 days, then assembled a band of teenagers to fish through the muck. Luckily, there were no reptiles. "Everything worked out," Escobar said, "but I definitely felt that I took a risk."

For sellers, the risk is not getting the debt relief they seek, ending up in foreclosure, and taking a big hit to their credit rating. Ayanna Dookie bought her home in Baltimore in 2007 for $182,000, getting a 10-year, fixed-rate, interest-only loan. When she decided to move to New York a few years later to pursue an entertainment career, "property values had dropped way below what I had paid for the house," Dookie said. She ended up selling for $89,000 -- less than half what she owed the bank.

The short sale dropped her credit rating from 725 to 697, but at 29, she's not worried. "I have time to rebuild. This is the time to follow my dreams."

Getting Short Sale Help

Short sale expert Plevel said that the No. 1 thing for sellers pursuing a short sale to do is find someone strategically trained in loss mitigation.

"John Q. Public can't handle a short sale by themselves," she said, "and many real estate agents lack the experience."

Plevel counsels that sellers should ask potential listing agents how many loan modifications and defaults they've handled, and then check their references and ask those clients how the process went.

Rick Keefer of Pacific Union International in the San Francisco Bay Area, another short sale consultant who has closed about $7 million in short sales, suggests these additional tips:

1. Complete short-sale documentation prior to placing your property on the market. That way, an experienced agent/negotiator can identify any potential obstacles. For instance, a second lienholder may want a contribution to remove the lien or to completely extinguish the debt. Many transactions fail, Keefer said, because all the details don't emerge until weeks or months into the deal.

2. Don't list too low to start. Banks like to see some days on the market at a reasonable asking price. If you start out too low, the bank may reject your offer. List the property at a fair price, then adjust the price every few weeks until you get an offer.

3. Lenders don't like to make concessions for repairs. Buyers should inspect the property and send the lender an as-is offer.

4. Take the long view. Make sure the buyer is committed and in the deal for the long haul. If a transaction fails, you have to start at square one and end up losing valuable time.

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]]>real+estate+short+sale+processrealestateshortsaleprocessAnn Brenoff2011-05-24T15:00:00+00:00Credit Score Catch-22: Mortgage Shopping Can Raise Your Ratehttp://realestate.aol.com/blog/2011/05/19/credit-score-catch-22-shopping-for-a-mortgage-can-raise-your-ra/http://realestate.aol.com/blog/2011/05/19/credit-score-catch-22-shopping-for-a-mortgage-can-raise-your-ra/http://realestate.aol.com/blog/2011/05/19/credit-score-catch-22-shopping-for-a-mortgage-can-raise-your-ra/#commentsFiled under: , , ,

mortgage closing costsIt's a Catch-22 if ever there was one. The very process of shopping around for a low interest rate on a mortgage can adversely impact your credit score and cost you your eligibility for the cheaper loan you're seeking.

Each time a lender does what is known as a "hard pull" on your credit report, their action actually shaves a few points off your score. A lower credit score means a higher mortgage rate. (You can check your own score 500 times a day and it won't matter. A hard pull is when a third party checks your score with the intent of extending you credit.)

With lenders tightening the noose, credit scores have become a matter of great concern for home buyers struggling to qualify for loans. Getting a favorable loan rate can mean saving hundreds of thousands of dollars over the course of the loan, so the idea that just in the course of loan-shopping you are doing yourself financial damage is logic-defying. But it's true.

The one break you can get is to do all your loan shopping within a two-week window. All checks done within this period will count as one -- and drop your credit score by just two to five points. But step outside that window, and each hard pull of your credit will cost you two to five points. Shop among eight lenders and you could see your scores drop by 40 points -- a drop that takes at least six months to recover from.

Tracy Becker, a national credit-score specialist located in New York's Hudson Valley and founder of the 20-year-old North Shore Advisory, offers these tips:

1. Don't open or close any credit accounts for three months prior to applying for a loan.

Yes, you read that right: Closing a credit account hurts just as much as opening a new one. Even the act of ending your car lease will cost you up to 60 points on your credit score.

Somewhere, some place, some analyst determined that one of the symptoms of a person about to go into default was that they began to close credit accounts. Well, duh. Isn't that what you're supposed to do when you find yourself overextended? Apparently the credit scorekeepers lump the financially solvent in with the defaulters' profile. So if your car lease is about to expire, extend it for three months while you loan shop, says Becker. And don't apply to increase your credit limits on any cards or take out any new ones.

2. Don't apply for a loan until you have a signed contract to buy a house and then do an intense day of loan-shopping.

The idea is to have all your hard pulls done within the 14-day window. One obvious problem is that not all home deals come to fruition. Estimates are that about 35 percent of open escrows fall apart. That means that those 35 percent of buyers will likely be back out there looking for another home and another home loan. And when they find it, their earlier efforts could work against them. The one glimmer of reasonableness here is that if you return within 90 days to the initial lender you approached, they will consider the credit score they pulled on that first go-round.

Becker had a client about a year ago who wanted to refinance his Long Island home. Not knowing the rules, he shopped for a loan about 30 times over a five-month period. He also went shopping for a car loan, got a credit card limit increase and was looking for a student loan for his daughter. The result: His credit score dropped 40 points and he couldn't get the mortgage loan he wanted, at a cost to him of an extra $600 a month.

Another of her clients had a credit score of 722 when he started looking to refinance his home. But he went out and bought a car, dropping his score by four points. Once under the credit threshold of 720, the refi application was denied. "Ultimately he paid down some balances and got back the extra points, but it was a lot of stress, a lot of paperwork and two-and-a-half months to get the loan he wanted," says Becker.

3. Don't let your balances exceed more than 10 percent of your available credit for at least three months, and pay your bills on time.

Getting a home loan these days is hard for everyone, and near impossible for those who have bad credit. Becker says to keep your balances below 10 percent of your available credit for at least three months prior to applying. That means if you have a credit card with a ceiling of $10,000, don't let the balance exceed $1,000. And since the credit reporting bureaus don't update their sites daily, you need to allow for a three-month delay.

FICO last month released information about how easily even a single unpaid bill can wreak havoc with your credit score. If you have a score of 780 and are 30 days late on your mortgage, your score will drop to 670 and it will take you three years to recover it. (Obviously, the F in FICO doesn't stand for Forgiveness.)

Credit consultant and head of New Start Financial Corp. Wayne Sanford -- a.k.a. "Wayne the Credit Guy" -- says that credit scores are just part of the equation.

He recently worked with a Texas family trying to buy a $330,000 home in Plano. The couple was ready to put $150,000 on the purchase and had scores of 690 and 740 between them. Yet the loan was flagged because a well-known national furniture store had marked their account as having a "consumer dispute." It was a computer error; the account had never been disputed and had in fact been paid in full on time and was closed. Nevertheless, it held up their loan and they almost lost their house deal.

Sanford advises running regular checks on your credit--which, by the way, won't impact your scores.

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]]>closing costscredit reportcredit scoreficomortgage ratesmortgagesAnn Brenoff2011-05-19T13:05:00+00:00Army Sergeant Battles Mortgage Servicer -- and Winshttp://realestate.aol.com/blog/2011/04/07/georgia-homeowner-awarded-21-million-in-mortgage-lawsuit/http://realestate.aol.com/blog/2011/04/07/georgia-homeowner-awarded-21-million-in-mortgage-lawsuit/http://realestate.aol.com/blog/2011/04/07/georgia-homeowner-awarded-21-million-in-mortgage-lawsuit/#commentsFiled under: , ,

mortgage lawsuitA Georgia homeowner was awarded $21 million in a lawsuit against one of the largest mortgage servicers in the nation. The homeowner, David Brash, a U.S. Army sergeant, claimed that PHH incorrectly reported his account as "seriously delinquent," when payments had been made on time through automatic deductions from his paychecks. The hefty judgment, according to the plaintiff's attorney, was necessary to get the mortgage servicer's attention. Huffington Post Business reporter Yepoka Yeebo has the full story:

A federal jury has awarded a Georgia man more than $21 million in a lawsuit pitting the homeowner against one of the nation's largest mortgage servicers.

U.S. Army sergeant David Brash was awarded the damages in March, after a Columbus, Ga., jury found that PHH Mortgage, the country's eighth largest mortgage servicer, had incorrectly reported Brash to credit score companies as "seriously delinquent" despite the fact that all his mortgage payments had been automatically deducted from his paycheck.


According to court documents, Brash sent letters to the mortgage company that went unanswered, violating federal laws. When he called his mortgage company to find out why his payments were not going through, his attorneys said, he was repeatedly routed to overseas customer services staff who couldn't answer his questions.





See the full story on Huffington Post Business.


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]]>david brashforeclosure crisishuffington post businessmortgage fraudmortgage lawsuitmortgage servicerrobosigningAOL Real Estate Editors2011-04-07T10:54:00+00:00Renters: Raise Your Credit Score Nowhttp://realestate.aol.com/blog/2011/01/26/renters-raise-your-credit-score-now/http://realestate.aol.com/blog/2011/01/26/renters-raise-your-credit-score-now/http://realestate.aol.com/blog/2011/01/26/renters-raise-your-credit-score-now/#commentsFiled under: , ,

credit scoreIt's probably safe to say that it isn't having a new apartment that's hard, it's getting it. First, there's the legwork, then there's the scraping together a security deposit and first and last months' rent. But for some people, it's that pesky credit score that stands between them and the garden apartment with tons of light and the in-house washer and dryer.

So how can you start fixing your credit score before you find yourself crying as someone else closes on the affordable two-bedroom of your dreams?
1. What is a credit score?

A credit score is a number between 300-850 based on -- primarily -- a person's credit history. The higher the number, the more reliable the renter. The credit score can be assessed by a landlord to reveal the likelihood that a potential renter will follow through on his or her monthly rental agreement.

2. Where does a credit score come from?

A credit score -- also known as a FICO score (from the Fair Issac Corporation) -- is derived by looking at five major categories (listed in order of the most to least heavily weighted): The renter's payment history; what the renter still owes; the length of the credit history of the renter; how much new credit the renter has; and the type of credit the renter has used.

3. How does ones credit score go down?

When a renter does not make his or her credit or rental payments on time or they have racked up so much debt that they become unable to pay a re gular minimum payment, their credit score might be primed to plummet. Further, if a person is a new credit holder or if they are applying for multiple credit sources, they can expect their number to appear less than stellar to a landlord. But more than any of those, filing for bankruptcy can knock a renter's score down up to 250 points and will stay on a credit report for 10 years.

4. What number does a landlord expect your credit score to be?

When a bank loans money, according to this recent Investopedia.com article, lenders consider anything above 770 a top-tier score and anything below 620 subprime. Landlords renting homes are -- in some cases -- willing to overlook a mediocre credit score if the would-be tenant is able to pay a larger down payment or get a co-signer.

5. So what can you do to raise your credit score?

o. Don't Use Credit: It might sound obvious, but the best way to rebuild bad credit is to stop accruing debt. Cut up your credit cards and go back to paying with checks and cash. It might sound old fashioned, but it will help you in the future.

o. Make a Calendar: It's easy in the throws of the day-to-day to forget a monthly bill or two - especially if there are five or six or more bills to pay off each month. So put it on your calendar or have reminders sent to your inbox. Even better, set up an automatic bill pay so you can't forget.

o. Have Fewer Credit Cards: Another no-brainer - why overtax your pocket book with all that plastic? The more open credit cards you have, the lower your credit score will be.

o. Stay in Touch With Your Creditors: Make sure to devote some time each month to going over your monthly statements. Catch mistakes early and report them immediately. The more mistakes you stop in their tracks, the higher your score will be - and it will keep your interest from skyrocketing.

o. Pay More: Don't just pay what you have to, pay more. If you overpay the interest or your minimum balance on your credit cards or student loans each month, you will be improving your overall credit. So look and see what you owe, then add fifty.

Your credit score isn't the only thing in the way of a great rental, but it's an important one. And the good news is, it's never too late to make it the number you know you should have.

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]]>credit scoreFair Isaac CorporationFICO scoresrental tipsJoselin Linder2011-01-26T12:12:00+00:00Credit Scores for Home Buyers in 2011http://realestate.aol.com/blog/2011/01/07/credit-scores-for-home-buyers-in-2011/http://realestate.aol.com/blog/2011/01/07/credit-scores-for-home-buyers-in-2011/http://realestate.aol.com/blog/2011/01/07/credit-scores-for-home-buyers-in-2011/#commentsFiled under:

credit scores for home buying in 2011 Consumer lending is still tight, and your credit score will still be a major factor in 2011 if you want to get the best mortgage interest rates. Even if you don't have a top score, you may still be able to get a government-backed loan, such as an FHA, VA or USDA, at a decent rate.

To get the best rate on the market, you'll need to have a FICO credit score of at least 760. But if your credit score is between 700 and 759, your interest rate will be just 0.2 percent higher. That means your mortgage payment on a $200,000 loan will be about $20 more per month. You'll pay about $10,000 more over the life of the loan on a 30-year fixed-rate mortgage at about 5.06 percent. The lowest interest rate for top scorers is 4.86 percent this week.

If your credit score is between 680 and 699, you can still probably find a bank that will consider you for a mortgage, but you may be able to find a better rate by applying for an FHA, VA or USDA loan. Your best best is to work with an independent mortgage broker who is not tied to a particular bank; that way the broker can find you the bank that will offer you the best deal depending on your credit score.
If your credit score is as low as 620, you may still be able to find a lender that will offer you a government-backed loan, but you'll have to do some searching. Most banks will only offer an FHA, VA or USDA loan to people with credit scores of at least 640, but some smaller banks will consider applications at 620.

Even though FHA's official rule is that you can qualify for a 3.5 percent down mortgage with a credit score as low as 580, banks are not offering mortgages to people with credit scores that low. If your credit score is below 620 you'll need to work on increasing your score first, as well as save more cash. If you're able to put down more than 20 percent, you may be able to find a bank that will offer you a mortgage.

So what should you do to improve your credit before applying for a mortgage?



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Step 1: Check your credit report.

Your first step should be to get your credit reports from all three credit bureaus (Equifax, Experian and Transunion). You can order them for free at the government-run website Annual Credit Report.com. This is the only website that offers free credit reports with no strings. (Other sites might offer you a free credit report but require you to sign up for monthly services.)

Step 2: Challenge any errors on your report.

When you get your report, if you see any errors follow the instructions sent with the report for correcting errors. The credit reporting agency has 60 days to respond to you and will send a corrected report. If it's still not correct, be persistent and send another letter disputing the report. You may find you need to dispute reports several times before they are correct, but it's worth the effort to improve your score.

Step 3: Reduce credit card debt.

If you're carrying large balances on your credit cards, pay them down. To get the best credit score you need a credit utilization ratio of 10 percent to 20 percent. You can calculate the ratio by dividing your total outstanding debt by your total available credit. For example if you have $2,000 of total debt on two credits cards that each has a $5,000 credit limit, your credit ratio would be 20 percent (2,000/10,000).

Step 4: Monitor your credit score.

While you're working through the process of correcting your credit reports and paying down your debt, you can check what's happening to your score for free at CreditKarma.com.

Step 5: Order your credit scores.

Once your report is accurate, you've paid down your debt and you think you're ready to apply for a mortgage, order your credit scores at myFICO.com. That way you will see what your potential lenders see. if your score is over 640, most banks will approve a VA or FHA loan. If it's below 640, you'll need the help of a specialized broker. If your score is over 680 you'll be able to consider both government-backed loans and private loans. Look at the numbers and see which one makes the most financial sense given your situation.

If your scores are too low, you may want to see if a parent or other family member will sign as nonoccupant co-signer. If you do plan to work with a co-signer, be sure to inform the broker that up front so he can steer you to the lenders that will approve a loan with a co-signer.

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More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.

 

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]]>creditLita Epstein2011-01-07T07:54:00+00:00Raising Credit Score Reduces Mortgage Costshttp://realestate.aol.com/blog/2010/12/09/raising-credit-score-reduces-mortgage-costs/http://realestate.aol.com/blog/2010/12/09/raising-credit-score-reduces-mortgage-costs/http://realestate.aol.com/blog/2010/12/09/raising-credit-score-reduces-mortgage-costs/#commentsFiled under:

If you have a credit score at 620 -- generally considered the dividing line between good and bad credit -- boosting it by 20 points could save you thousands of dollars on your mortgage. And there are simple ways to do this in a short time. An analysis of about 300,000 loan requests received through Zillow.com in September revealed that a homeowner who raises his or her credit score to 640 points may benefit from

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If you have a credit score at 620 -- generally considered the dividing line between good and bad credit -- boosting it by 20 points could save you thousands of dollars on your mortgage. And there are simple ways to do this in a short time.

An analysis of about 300,000 loan requests received through Zillow.com in September revealed that a homeowner who raises his or her credit score to 640 points may benefit from a 0.10 percent reduction in their annual percentage rate, or APR.

For a $300,000 home loan with a conventional 20 percent down, this yields a savings of $10,000 in interest costs over the life of a 30-year fixed-rate loan.

What about those with credit scores under 620? Without enough loan requests in that segment, Zillow was unable to generate any findings for those deemed to be in the "bad credit" zone. (According to Fico.com, this is an estimated 29.3 percent of all Americans.)

"People with scores under 620 should not expect the same conventional rates," says Jason Biro, author and founder of the nonprofit, Saving Your American Dream. "Lenders are now looking at entire credit history, such as a bankruptcy or foreclosure, and credit worthiness, not just your score."

However, Biro says that those falling within the threshold of 620 to 719 should keep working on their credit scores to benefit from lower interest rates. Here's what you can do to easily boost your score 20 points within a few months:

1. Pull your credit report. Obtain a free copy of credit report from annualcreditreport.com, which you are entitled to each year by federal law. Request a copy from each of the three repositories (Experian, TransUnion, and Equifax) and review them for accuracy.

2. Dispute discrepancies on your credit report. By e-mail or mail, you can appeal any inaccuracies on your report with the repository. According to Biro, if you don't get a response from the agency within 45 days, the law requires that this information be removed from your credit file.

3. Pay your bills on time and don't use more than 30 percent of existing credit. Gail Cunningham, vice president of public relations at the National Foundation for Credit Counseling, says 65 percent of your score depends on paying bills on time and the amount of available credit. She suggests using less than 30 percent of your existing lines of credit to see an immediate jump in your score and being diligent about timely bill paying (all you need to cover is the minimum payment required by the due date).

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4. Request a score improvement analysis. Another option is to get a score improvement analysis, says Biro, in which mortgage brokers or credit counselors can use credit software to see what you should do first -- whether it's paying down debt to closing down accounts -- to bump up your credit score the fastest.

While these tips are what can make the biggest impact in a short amount of time, they won't magically discharge your credit woes overnight, experts say.

Once the errors are corrected, you've reduced your debt or made other necessary adjustments, the improvements should only take a month or so to be reflected in your credit score. However, start to finish, Cunningham recommends beginning the process about three months before you'd like to apply for a loan or refinance your mortgage.

But the good news, she says, is that the lower your credit score, the faster you will see improvement.

 

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]]>creditAol Real Estate Contributor2010-12-09T13:43:00+00:00