Home Loan | Mortgage | Refinance

Archive for October, 2009

The U.S. Department of Housing and Urban Development has taken action against Honolulu-based reverse mortgage lender Financial Mortgage USA Inc. for allegedly misleading elderly borrowers and committing other violations of federal lending …
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Like many people doing or considering a mortgage modification, David L. of Oakland wonders how it will affect his credit score. Unlike most people in this situation, David has never missed credit payments and has a very high FICO score of 810. But …
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Sub-prime lenders now offer financing packages with zero down. Interest rates are higher on these types of loans, but they make purchasing a house easier. And unlike a conventional loan, there is no private mortgage insurance required. There are two types of zero-down mortgage packages, each with their own requirements.

Types Of Zero-Down Loans

100% financing, as it names implies, offers complete financing of your property. The other option, 80/20, finances your mortgage with two loans. Both loans may be carried by your lender, but sometimes the seller or a second lender is required to carry the 20% mortgage.

100% financing is easier to deal with, but not all lenders will offer this type of home loan. 80/20 financing is more common, but takes some negotiation if the seller is involved.

Qualifications For Zero-Down

Each lender has their own criteria for determining who will qualify for a zero-down loan. Most sub-prime lenders require any bankruptcies or foreclosures to have been at least twelve months ago. A conventional loan requires these to be discharged two to four years ago.

While a credit score of 600 or higher is best, large cash reserves can also qualify you. Six to twelve month’s worth of cash reserves in the form of savings, money market, or other liquid assets are considered ideal.

If you choose 80/20 financing with the seller carrying the second mortgage, you can qualify with sub-prime lenders with a score of 560.

Zero-Down Sub-prime Lenders

You can find zero-down sub-prime mortgages with both conventional and niche sub-prime lenders. Make sure that you request quotes from as many mortgage lenders has possible to be sure you find the lowest rate and best terms.

You will also want to decide what type of mortgage you want. An ARM is easier to qualify for and has lower rates. A fixed rate mortgage offers the security of a constant interest rate over the life of your loan.

Typically an ARM will be a better deal if you plan to refinance within a couple of years. After you have improved your credit history, you can refinance for a conventional mortgage with low interest rates.

See my recommended companies for Bad Credit Mortgage Loans. Carrie Reeder is the owner of ABC Loan Guide, which offers help with loans for people with bad credit.

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A few years ago getting a mortgage was easy. A lot of the time people didn’t even need a deposit, there were banks out there giving 108% loans! These days things are tougher. The global financial crisis has caused many banks to tighten their lending criteria. Also, many people are reading the fine print before they sign up for a mortgage a lot more than they used to.

If you are looking at getting a mortgage, it definitely pays to be savvy about how you apply for a loan and what product you apply for. Knowledge is most definitely power when it comes to home loans.

If you are unsure about home loans, a mortgage broker can help you with the task. There are many different ways that you can borrow money. Most people will shop around a few banks and choose the best rate. This does not always ensure that you get the cheapest home loan. The best bank is not necessarily the one with the best rate. Many banks which boast cheap interest rates have hidden fees and charges which actually have you paying more money at the end of the day.

A mortgage broker will begin with a consultation, they will discuss your needs and circumstances. Based on the information that you provide, the broker will consult with a panel of lenders to find out which bank is best for you.

A broker will not simply pick a bank for you, they will actually negotiate with the bank to get the best rate and the best package. When competing for your business, banks will often offer an interest rate cut and drop fees and charges. Mortgage brokers will often have relationships with business development managers within the banks that will help them get a good deal. If the manager looks after the broker, the broker will ultimately send more loans to the bank.

Once you have in consultation with your broker, decided on the right loan product, the broker will complete all the necessary paper work and send it off to the bank. You may need to supply some documents, but the broker will do the majority of the paperwork for you. Most banks will get back to the broker with a pre-approval within a few days. Formal approval takes between one and two weeks, depending on the bank, the broker and the work load both are currently under. If a broker has a good relationship with a bank, they often get faster response times from the bank.

Using a mortgage broker not only saves you time and hassle, but it can also save you a lot of money. If just thinking about battling the banks is giving you a headache, save yourself the stress and talk to a mortgage broker today.

You can find out more about Mortgage Broker Sydney by visiting http://www.mortgagebrokersydneynsw.com

David has been marketing successfully online since 2003

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Your credit file is the single most important document that will be used to determine how worthy you are of the loan a lender will give you. It is used by mortgage loan institutions and other types of lenders. They need to look into your report which is like a scorecard to be able to make certain decisions which they can’t find out merely by asking you, and since there are professional bodies that do this for a fee, they inevitably turn to these so called bureaus for your scorecard.

For you to part with the exact amount you’ll need from a creditor to be able to get the house of your dreams there are certain things you must bring to the table. You need to have a fraction of the money to be used in the purchase of the house, a good and steady job, evidence of good income that reflects you’ll be able to pay up on loan given to you, a score good enough to get you the value of house you’re needing, a credit report that reflects you’ve not been in financial distress.

Once you’re able to meet up with the above requirements, getting the necessary fund to acquire a house becomes increasingly easier.

Knowing that your financier will look into your report shouldn’t give you goose bumps, you should let it spur you to the action of cleaning any type of negative account that will hurt your chances of getting a loan. For instance, a single collection on your report will spell danger that you’re probably in the habit of being unable to settle debts which forces creditors to sell the right of ownership to a third party debt-buyer.

Sacrificing about half-hour of everyday for a couple of days or three will help you to understand what you need to do and also take important steps in removing bad accounts from your file. This is in a situation where you’ll be using a self-help restoration kit. An alternative is to hire a repair agency.

Visit do-it-yourself-credit repair or credit repair services to learn more on raising your credit score 200+ points to get approved for car, home and credit card loans.

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Homeowners can use mortgage servicing fraud and abuse practices as a defense to stop a foreclosure lawsuit. Once mortgage loans are originated, they are frequently packaged and sold off to investors. While no one may really know who owns the loan, the rights to collect the payments are transferred to mortgage servicing companies. These companies are one of the greatest perpetrators of abuse and fraud against homeowners, as they have very little incentive to do right by the borrowers.

These companies are typically paid a flat fee by the trustees of the mortgage to administer the loan, collect payments, make sure property taxes and insurance are in place and paid through escrow, and pursue any foreclosure proceedings, if necessary. If homeowners do miss payments, the servicer gets paid anyway, and actually makes more money from a foreclosure than if they offered to work closer with the owners of the property to negotiate for a mortgage modification or other workout option.

That’s right — mortgage servicing companies actually lose more money when they help homeowners modify loans and save their homes from foreclosure! The fewer resources they dedicate towards loss mitigation and assisting borrowers, the more of the flat servicing fee they get to keep for themselves.

Of course, the parties on either side of the mortgage — the homeowners and the holders of the loans — lose far more in a foreclosure than a loan modification. But with a servicing company in the middle of the deal, it is more profitable to let a house go through the entire foreclosure process than to assist the borrowers in making the payments more affordable.

Servicing companies have also been found to “push” homeowners into foreclosure in a variety of abusive ways. If they are not pushed straight into foreclosure, the companies may covertly charge fees and extra interest, or credit payments late. If the owners ever do miss a payment (and many loan servicers only purchase rights to loans that are subprime or have higher risks of default), a foreclosure will quickly result and the costs to reinstate the loan may be astronomical.

The following is a list of the top seven most common mortgage servicing abuses that homeowners will run into. However, the ways that fraudulent companies can take advantage of borrowers are nearly endless, so if homeowners believe that they have been defrauded, they should take appropriate actions in court and with state and federal regulatory agencies. The more that they can discover about how their loan has been handled by a servicer, the better chance they have of proving servicing abuse and other related charges in a court.

Junk fees masquerading as legitimate. These may include property inspection fees, broker price opinions, and outrageous attorney fees, among many others. These will be charged to a borrower’s account in order to increase the amount of a payoff, thereby creating even more profits for a loan servicer during a foreclosure action.

Failure to disclose fees during a Chapter 13 bankruptcy. Servicing companies seem to work even harder against homeowners once they file for bankruptcy. Fees can increase, but little justification for the fees will ever be given, even to the bankruptcy courts.

Collection of junk fees even after discharge in Chapter 13. Because the company knows the homeowners no longer have the protection of the courts or the guidance of a bankruptcy lawyer, they can add the junk fees back in and charge them to the borrowers.

Using junk and late fees to show negative payment history. This would help the mortgage servicer argue that the homeowners have failed to uphold the bankruptcy payment plan and that a relief from stay should be granted. The servicer can try and argue this even if the borrowers have made all of the required Chapter 13 payments on time.

Attorneys for corrupt mortgage servicers just as corrupt. These attorneys will receive information they know to be inaccurate or misrepresented from the servicer and file motions in court like it was legitimate — another case of lawyers abusing their positions in order to keep a rich client happy. But the lawyers also know that they can overcharge for legal and court fees and it will be charged to the borrowers’ accounts. These fees may even be in excess of what courts have approved.

Escrow account abuse. Servicers may create illegitimate escrow accounts to hide the fact that they are taking borrowers’ money and applying it to junk fees, late fees, and interest, instead of on the actual amounts due on the loan. This pushes borrowers even further behind every month. Companies may also fail to fund escrow balances properly, creating negative balances when county property taxes or homeowners insurance are paid. The homeowners are then charged for this deficiency and fees and interest are added to the balance of the loan.

Forced-place homeowners insurance. Too often, servicing companies will arbitrarily determine that the property insurance in place on a home is not sufficient, or they will simply deny there is any insurance present at all. At this point, the mortgage loan servicer will buy a policy from an insurance company it is affiliated with and charge the premiums to the borrowers. Unfortunately, the premium may be several thousand dollars more than the original policy was. But the servicer will adamantly, consistently deny that the homeowners’ policy was adequate, and no amount of proof or phone calls will convince them otherwise.

Unfortunately, there are simply far too many ways that homeowners can be abused by servicing companies to list here. A surprising number of the largest names in mortgage servicing have been found engaging in these practices and have been forced to pay homeowners. A good attorney or foreclosure specialist trained in this area will be able to help the vast majority of borrowers determine if servicing abuse is a factor in their foreclosure.

Although there is no specific federal or state law outlining what constitutes mortgage servicing fraud or abuse, both areas of the law outline some prohibited actions for any mortgage lender or servicer. Regulation Z of the Truth in Lending Act is a good place to begin research, as well as any applicable state foreclosure laws, consumer protection laws, and banking regulations.

In terms of using this as a defense against a foreclosure lawsuit in court, homeowners may allege servicing abuse in the affirmative defenses or counterclaims portion of their answer to the complaint. Depending on the severity of the abuse, borrowers may be able to offset some of the damages they have suffered or have an entire defense to the lawsuit for especially egregious acts.

Nick publishes articles for the My Foreclosure Lender website. These articles provide resources to homeowners facing foreclosure, describing a number of alternatives they can use to delay foreclosure. The site details numerous methods, including loan modification, foreclosure lending, deed in lieu, filing Chapter 7, and others. Visit the site to find out more about how the foreclosure process works: http://www.myforeclosurelender.com/

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The U.S. Department of Housing and Urban Development is taking action against a reverse mortgage lender in Hawaii. HUD’s Mortgagee Review Board wants to permanently withdraw the HUD/Federal Housing Administration approval of Financial Mortgage USA …
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