“People trying to do short sales are freaked out about it,” said Elizabeth Weintraub, a real estate agent in Sacramento, Calif. “They’re telling me they’ll do whatever it takes to close by the end of the year.”
….. If the Mortgage Forgiveness Debt Relief Act of 2007 does not get extended by Congress by the end of the year, homeowners will have to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction. more
In theory, it should be a good time to buy a home. In the worst-hit areas, properties have lost more than half their value.
Yet as the average 30-year mortgage rate has slipped below 4 percent, the combination of employment insecurity and unusually tight standards for lending are discouraging buyers en masse. Lenders are asking for extensive income verification and tax returns. One lender I contacted for refinancing even wanted me to get an accountant to certify that I wasn’t lying to the IRS…….
A Credit Reporting Agency may report negative information for seven years.
- Crminal convictions may be reported without any time limitation.
- Bankruptcy – up to 10 yrs.
- Response to application for a job with a salary > $75,000 – no time limit.
- Information reported re: an application for > $150,000 worth of credit or life insurance – no time limit.
- Lawsuit or an unpaid judgment – the longer of 7 yrs or until the statute of limitations expires.
FICO score is as follows:
- 35 percent payment histories
- 30 percent amount of debt (e.g. don’t use over 50% of a credit line).
- 15 percent length of time credit line has been open (a longer history is better if there have always been timely payments).
- 10 percent very recent history including new applications for credit.
- 10 percent type/mix of credit, includes installment loans (like car loans), leases, mortgages, credit cards, and so on.
Effective April 1, 2009, FHA appraisers must now provide the following:
- The Market Conditions Addendum (Fannie Form 1004MC/Freddie Form 71)
- At least two comparable sales that occurred within 90 days of appraisal date
- A minimum of two active listings or pending sales in addition to the three closed comparables
- Bracketed listings using both dwelling size and sales price when possible
- Adjusted active listings to reflect the list-to-sales price ratio
- Adjusted pending sales to reflect contract sales price when possible
- The original list price and any revised list prices
- Reconciliation of adjusted values of active or pending sales with adjusted values of closed comparable sales
- Absorption rate analysis
- Known or reported sales concessions on active and pending sales
This update includes this warning: “Direct Endorsement Lenders are reminded that if the appraiser they selected provides a poor or fraudulent appraisal that leads FHA to insure a mortgage at an inflated amount, the lender is held responsible equally with the appraiser for the integrity, accuracy and thoroughness of an appraisal submitted to FHA.”
How might home buying change if the federal government shuts down the housing finance giants Fannie Mae and Freddie Mac?
The 30-year fixed-rate mortgage loan, the steady favorite of American borrowers since the 1950s, could become a luxury product, housing experts on both sides of the political aisle say.
Interest rates would rise for most borrowers, ……
Life without Fannie and Freddie is the rare goal shared by the Obama administration and House Republicans,………..The reasons by now are well understood. Fannie and Freddie, created to increase the availability of mortgage loans, misused the government’s support to enrich shareholders and executives by backing millions of shoddy loans. Taxpayers so far have spent more than $135 billion on the cleanup.
Make sure your credit is as clean as possible, according to FICO, a person’s score is as follows:
- 35 percent is determined by payment histories on credit accounts, with recent history weighted a bit more heavily than the distant past.
- 30 percent is based on the amount of debt outstanding with all creditors.
- 15 percent is produced on the basis of how long the borrower has been a credit user (a longer history is better if there have always been timely payments).
- 10 percent is comprised of very recent history and whether the borrower has been actively seeking (and getting) loans or credit lines in the past months.
- 10 percent is calculated from the mix of credit held, including installment loans (like car loans), leases, mortgages, credit cards, and so on.
What Do I Need to Get a Loan? <full story
Lending standards remain tight, and lenders have been picky even with the best-qualified borrowers. If you’re buying or refinancing the mortgage on your primary home, you’ll need a minimum down payment of 5% to 10% for a conforming loan or 10% to 15% for a conforming jumbo loan. With 20% or more down, you avoid private mortgage insurance, which typically costs 0.5% to 1.5% of your loan amount per year. Fannie Mae and Freddie Mac, which set the standards for mortgages they buy from lenders, require a minimum credit score of 620; you’ll get the best rate if your score exceeds 720. The Federal Housing Administration requires a minimum credit score of 580 to qualify with a down payment of 3.5%, but FHA lenders often impose a higher minimum score of 670. (If you apply with a spouse, lenders will probably base your rate on the lower of your scores.)