Great News Out of Washington for HomebuyersIf lawmakers get their way, Private Mortgage Insurance (PMI) will become tax-deductible for home loans originated after January 1, 2007. PMI is a requirement for most home loans in which borrowers make a down payment of less than 20%. The bill has already been passed by Congress and awaits the President's signature before it becomes law.While the new deduction is restricted to homebuyers whose annual household income does not exceed $100,000, the legislation could impact nearly 50% of all homebuyers, according to a SMR Research study of homes financed in 2005.Up until now, many homebuyers have used "piggyback" loans in order to avoid paying PMI. A piggyback loan is where the homebuyer obtains two mortgages, a first mortgage for 80% of the purchase price, and a second mortgage for the remaining funds required, outside of the down payment.Since many homebuyers have chosen a Home Equity Line of Credit (HELOC) as their second mortgage, their required monthly payments have increased significantly as a result of the actions of the Federal Reserve. Today, many homebuyers with a HELOC are now paying more than they would have if they had chosen PMI with their original mortgage.What does this legislation mean to you? Under the law, homebuyers will have more financing options available that offer greater tax deductibility and lower monthly payments. This means a homebuyer could potentially afford a more expensive home! In addition, homebuyers could qualify for traditional mortgages rather than the more expensive options they were forced to pursue in the past.Posted @ www.SinclairRealtors.com
December 19, 2006
The Red Planet is about to be spectacular!This month and next, Earth is catching up with Mars in an encounter that will culminate in the closest approach between the two planets in recorded history. The next time Mars may come this close is in 2287. Due to the way Jupiter's gravity tugs on Mars and perturbs its orbit, astronomers can only be certain that Mars has not come this close to Earth in the Last 5,000 years, but it may be as long as 60,000 years before it happens again.The encounter will culminate on August 27th when Mars comes to within 34,649,589 miles of Earth and will be (next to the moon) the brightest object in the night sky. It will attain a magnitude of -2.9 and will appear 25.11 arc seconds wide At a modest 75-power magnification Mars will look as large as the full moon to the naked eye . Mars will be easy to spot. At the beginning of August it will rise in the east at 10p.m. and reach its azimuth at about 3 a.m. By the end of August when the two planets are closest, Mars will rise at nightfall and reach its highest point in the sky at 12:30a.m. That's pretty convenient to see something that no human being has seen in recorded history. So, mark your calendar at the beginning of August to see Mars grow progressively brighter and brighter throughout the month. Share this with your children and grandchildren.NO ONE ALIVE TODAY WILL EVER SEE THIS AGAIN.Posted @ www.sinclairrealtors.com
July 30, 2007
BEWARE! SECOND TRUST DEED HOLDERS ARE SUING ON NOTESPlease be aware that some lenders holding junior trust deeds, after a foreclosure on the senior lien, have begun seeking recovery by filing a lawsuit on the note.After being foreclosed on a piece of real estate, most borrowers assume that they will not hear from the lenders seeking to recover any deficiency on the junior trust deeds that were wiped out by the foreclosure on the senior lien. In fact, if the obligation created under the junior trust deed does not fall within the anti-deficiency statutes, such as where the loan was not purchase money, the obligation remains intact even though the security is eliminated by the foreclosure on the senior lien. In other words, if the junior lien is not within the provisions of the anti-deficiency statutes, the creditor may sue on the note itself without foreclosing on the property.This often works in the following manner: After a foreclosure on his property a borrower receives a letter in the mail from a law firm advising of the intent of the second trust deed holder to sue in 30 days and asking the borrower to contact the firm to work out a settlement. If the borrower calls, the attorney negotiates a settlement of 20% to 30% of the actual amount owed. If the borrower does not agree to settle, the attorney advises the borrower that the lender will be filing suit to obtain a judgment for the full amount owed. A second practice that has come to our attention is a "bait and switch" on short sales and deeds in lieu of foreclosure. In this situation, the borrower persuades the lender to approve a short sale or a deed in lieu of foreclosure. However, when the release of claims actually arrives from the lender, it releases the lien but reserves the right to pursue "other remedies" that may exist in the law. The other remedies include filing a lawsuit on the note independent of the worthless security. So, where a borrower believes he is being released from all liability he is actually receiving only a reconveyance of the deed of trust or a release of the lien, and not a release of the obligation to pay as created by the note.If your client is considering taking out a second loan on a property, or is trying to decide whether to enter into a short sale or allow property to foreclose, we strongly recommend that you refer your client to an attorney to discuss the issues created by these actions.As can be seen from the above, efforts are being made to address these issues on all fronts, including local, state and federal as well as the real estate and lending industries.Posted on www.SinclairRealtors.comFrom CAR News website
October 05, 2007
FHA Fixing Broken ARMs (Part 1 of 2)FHASecure is a new federally-insured (temporary) lending program announced by President Bush on August 31, 2007, and released to FHA-approved lenders on September 4. Qualified homeowners seeking payment relief from their adjustable rate mortgage (ARM) may be able to use FHASecure to restructure their loan into a more stable, fixed-rate program, even if they are already delinquent on payments. "Risk Based" fee schedules, which are to be released shortly, will help price these loans appropriately.Do You Qualify?To qualify for an FHASecure loan, borrowers must meet the following five criteria:1. A history of on-time mortgage payments before the borrower's teaser rate expired and loan reset;2. 3% equity in the home; or cash to compensate (see your mortgage professional to find out about other methods of meeting this requirement);3. A sustained history of employment;4. Sufficient income to make the mortgage payment; and5. The loan application must be signed no later than December 31, 2008.Even if you do not meet these criteria, you should still contact a qualified mortgage professional because he or she can often provide you with other resources to help overcome your current challenges and reach your financial goals.Posted @ www.SinclairRealtors.com
October 15, 2007
FHA Fixing Broken ARMs (Part 2 of 2)The House Takes Initiative: Last month, the House overwhelmingly passed FHA reform bill HR 1852 (The Expanding American Homeownership Act of 2007). The next step is the Senate where a vote is expected within the next few months.As the bill stands now, there are a number of significant changes that could dramatically impact home lending, including making FHA loan limits as high as $729,750 in high-cost areas, such as California and Florida. It's uncertain if the Bush administration will support the bill in its current form, but it has several features that could easily reshape FHA lending as we know it.YOU Magazine turned to FHA expert Jeff Mifsud to highlight what this legislation could mean for borrowers in the future if this initiative is to pass in its current state:Lower Down Payments: Authorizes zero and lower down-payment loans for borrowers who can afford mortgage payments but lack the cash for a required down payment. (In fact, options are now available which may help to expand or stabilize certain programs for those who have little to no cash.)Subprime Borrowers: Directs FHA to provide mortgage loans to higher risk (but qualified) borrowers without authorizing unnecessary fee hikes on such borrowers.Reverse Mortgages: Enhances the FHA reverse mortgage loan program to help seniors pay for health and other expenses by removing the loan cap to avoid program shutdowns, raising loan limits, and reducing the maximum fee lenders can charge for these loans.Multifamily Loans: Raises FHA multifamily loan limits so these loans can fully fund construction costs in high-cost areas, and enhances sale of foreclosed FHA rental housing loans to localities so that affordable housing can be maintained in local communities.Higher Loan Limits: Raises the FHA loan limit in each area to the lower of (a) 125% of the local area median home price or (b) 175% of the national conforming loan limit.Senate's Blueprint for Reform: Read twice and approved by a Senate banking panel on September 19, this is the Senate's version of FHA reform. Again, further steps are necessary before this initiative is to become law. Following are some issues that the legislation is attempting to address:Increase loan limits across the board; Reduce down payment requirements; Simplify FHA requirements for condominiums and housing co-ops; Expand reverse mortgage programs; Enhance home buyer counseling before and after purchase; Establish alternative credit scoring pilot program; Enhance fraud protection;Bottom line: By updating and expanding FHA, lawmakers are clearly invested in removing some of the current limitations in FHA lending. All politics aside, this new flexibility will likely help many homeowners.Home buyers, home sellers, ARMs holders, and other borrowers looking to refinance, don't allow yourself to be overwhelmed by all of the information surrounding these initiatives. These are the facts. Print out a copy of this article and call your mortgage specialist today. Find out what opportunities are available to help you meet your financial goals.Posted @ www.SinclairRealtors.com
