Tuesday, March 19, 2013
As of March 1st, Fannie Mae and Freddie Mac will allow homeowners to apply for a deed-in-lieu of foreclosure even if they have been making their mortgage payments on-time. Until recently, the GSEs only allowed their borrowers to engage in a deed-in-lieu of foreclosure if they were more than 90 days delinquent.
What is a Deed-in-Lieu of Foreclosure?
It is a deed instrument in which the borrower conveys all interest in a real property to the lender in order to satisfy a loan that is in default. This is done in hopes of avoiding foreclosure proceedings. The deed-in-lieu of foreclosure has advantages for both the borrower and the lender. The borrower is immediately released from most or all of their personal indebtedness that is associated with the defaulted loan. Also, the borrower's credit is not hurt as much as it would be if they went through foreclosure.
Advantages for the lender include a reduction in the amount of time and money that is associated with a repossession. There is also a lower risk of the borrower exacting revenge by vandalizing the property before they are evicted.
It is considered a deed-in-lieu of foreclosure when the debt is secured by the real estate being transferred Both the borrower and the lender are expected to enter the transaction voluntarily and in good faith. However, if the borrower's outstanding debts are greater than the current fair value of the property, the lender may not proceed.
To summarize briefly, a deed-in-lieu of foreclosure basically means that the homeowner cannot afford their mortgage and are voluntarily giving their home back to the bank in exchange for wiping their debt clean. It does have a negative impact on credit scores, but sometimes it is the only option for some people. It is quite possibly the fastest way that one can escape foreclosure.
To qualify, homeowners must be able to prove their hardships, such as the loss of a job, serious illness, or the death of a co-borrower. They must have a debt-to-income ratio of 55 percent or higher, and the property must be in good condition. This mortgage release option is best for those facing a hardship and will not be able to make their payments in the future. It is not expected than a large number of homeowners will suddenly apply for a deed-in-lieu of foreclosure though, especially since home prices are going up. It is up to each homeowner to decide if it is better for them to continue paying their mortgage for a few more years while home prices further improve, or take a hit to their credit now and move on.
If you find yourself unable to make your mortgage payments, be sure to carefully consider all of your options before making a decision. If you are unsure of what to do, we are willing to help assess your situation and answer your questions. Call us at 888-883-5252 for help.
Thursday, February 28, 2013
What are the reasons and benefits of refinancing?
• Lowering your interest rate. Securing a lower interest rate is one of the top reasons for refinancing. This can make a big difference in your monthly out-of-pocket costs for housing and save money on financing fees.
• Convert a an adjustable rate mortgage to a fixed term: converting an ARM to a fixed rate mortgage will allow you to keep payments constant and avoid balloon and spiked payments due to interest rate fluctuations.
• Build Equity Faster: if you are in a position to make higher monthly payments as a result of a salary or other good fortune, switching from a 30 year loan to a 15 or 20 year loan structure will allow you build equity faster and save money by paying less interest.
• Improved credit score: If your credit score has improved as a result of making your mortgage payments on time and in full, you may be in a position to take advantage of your improved credit standing. We can review your current credit score, the terms of your existing mortgage, and review options for other loan programs that could not only reduce your monthly payment, but also save you money on interest fees paid over the life of the loan.
• Use the equity you have established: A cash-out refinance allows you to tap into the equity you have built up in your home. You may want to pay off revolving credit card accounts, send a child to college, or use the money for home improvements or personal expenses. Regardless of your reasons for wanting to refinance your existing mortgage, Quest Loans is interested in helping you make a decision that works best for you. We present our clients with spreadsheets outlining the various programs available. We continually monitor rates and alert our clients of interest rate changes in order to inform them of the best time to refinance. We will also review the terms of your existing mortgage program. It is important to consider whether or not you have a prepayment penalty written into your existing loan, and why you are refinancing. It is important for us to know how long you plan to stay in the home. This helps us to determine whether or not it is beneficial for you to pay points up front to secure a lower interest rate on your new financing. The lender will want to know what the current property value is, how much equity you have built up, and your current credit score
Source: QuestLoans.com | 888-883-5252
Monday, February 18, 2013
The Government National Mortgage Association (GNMA), or Ginnie Mae as it is nicknamed, is responsible for allowing mortgage lenders to obtain a better price for their loans in the capital markets. Recently, Ginnie Mae announced that it has guaranteed more than $41 billion in mortgage-backed securities (MBS) as of December 2012. These are a dependable source of liquidity for loan originators who work with government-backed mortgages.
Ginnie Mae finances housing mortgage insurance programs that are run by the FHA, the VA, and other programs, by raising capital from investors in the global credit market. This ensures liquidity for affordable rental and homeownership for everyone across the nation.
Unlike Fannie Mae and Freddie mac, who are "government-sponsored enterprises" or GSEs, Ginnie Mae is a wholly owned government corporation. Ginnie Mae is the guarantor of MBS issued by government-approved securities issuers who participate in Ginnie Mae's program.
It has always been Ginnie Mae's mission to expand affordable housing throughout the US. Ginnie Mae is an essential part of the housing finance market and its economy recovery.
Tuesday, February 12, 2013
How would you like to be among the millions of responsible homeowners who can refinance their mortgages at a lower rate in order to save thousands of dollars each year? It's within your reach!
Especially now that U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) have introduced this legislation in the 112th Congress. It is called "The Responsible Homeowner Refinancing Act of 2013" and it plans to remove the barriers that are currently preventing borrowers from obtaining the lowest rate possible.
This bill would streamline refinancing as we know it for all of Fannie Mae and Freddie Mac's borrowers whether they are underwater or not. Up-front fees would be reduced, appraisal costs for borrowers would be eliminated, and the HARP program would be extended by one year to allow eligible borrowers to take advantage of it.
This would be done at no cost to taxpayers. It is intended to stimulate the economy by lowering borrowers' monthly mortgage payments. This would hopefully reduce the number of foreclosures around the nation while boosting the housing market.
That’s why the Menendez-Boxer bill has such broad support from industry and consumer groups. With the recent record-low rates for a 30-year mortgage averaging around 3.53%, you could be one of the nearly 12 million homeowners guaranteed by Fannie Mae and Freddie Mac who could refinance! There are many who are not currently able to refinance because of policies and high fees, but if the Menendez-Boxer bill goes into effect, all that red tape would be gone! In fact, through HARP, the average homeowner saves $2,500 per year as it currently is. The bill plans on increasing that amount by expanding refinancing opportunities for all those who are eligible.
If you are ready to take advantage of the current low rates, find out if you are qualified for a loan now! Call Quest Loans at 888-883-5252 to find out when it is the right time for you to refinance! We will answer all your questions!
Sunday, December 30, 2012
When you have found the perfect home and are ready to go through the mortgage process, you will need to contact a loan originator. What many people don't know is that there is a big difference between a State-Licensed Mortgage Loan Originator and one that's only been registered. If they have been state licensed, then they've also passed a series of exams and received their own NMLS number. If your lender does not have an NMLS number, they're most likely registered under their Lending Institutions License and may not have completed the training to be officially licensed in their state.
As of July 1, 2010, new policies were set in place that require Mortgage Bankers and Brokers to be licensed through the Nationwide Mortgage Licensing System. The requirement for being licensed includes passing state and federal tests, background checks, finger printing, pre-eduation and continuing education. They must complete 20 hours of educational classes and pass two separate and lengthy tests. If they've failed the test, they must wait 30 days before retesting. If you fail 4 times, you have to wait 6 months. Those that are simply registered do not have any of this. The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, or the S.A.F.E. Act, requires the Agencies to maintain a system for loan origination to protect consumers. Some 60% of registered lenders do not pass their exams. Before you begin working with an originator, take the time to check if they are correctly licensed by visiting http://www.nmlsconsumeraccess.org/
Saturday, November 10, 2012
What is the Home Affordable Refinance Program (HARP)?
HARP is a federal government program that was introduced in March 2009. It is designed to help homeowners who are underwater with their mortgage payments. It allows them to refinance their home into a fixed loan with a lower monthly payment, thus avoiding foreclosure. In October 2011, President Obama announced a change for HARP that would allow it to reach even more underwater homeowners. It is now known as HARP 2.0.
Are you having difficulty making your current mortgage payment? Do you owe more on your mortgage than your home is worth? Perhaps HARP is right for you! In order to qualify, you must meet all of the following requirements:
-Your mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae, and it must have been sold to one of these before June 1, 2009.
-It cannot have been previously refinanced with HARP.
-The current loan-to-value (LTV) ratio of your loan must be greater than 80%
-The borrower must be current on the mortgage at the time of refinancing, having not missed a payment in the past 6 months. One late payment is allowed in the past 12 months.
-You must have a minimum credit score of 620 to qualify.
-You must have a debt-to-income (DTI) ratio of 45% or less
If you are not sure whether or not you meet these requirements, please call Quest Loans. We can help you determine your eligibility and get the process of applying for an HARP loan started! 888-883-5252
Thursday, November 8, 2012
What is an FHA loan?
Technically, it itself is not a loan. Rather, it means that the Federal Housing Administration has your back. They will insure your loan even if you have fair or poor credit, a low down payment (at least 3.5%), or have experienced bankruptcy or foreclosure. This makes lenders more inclined to help you out and offer you a loan because it reduces their risk of loss if you default on your payment.
The FHA program has been helping borrowers who normally could not qualify for a loan since the 1930s as a way to stimulate the housing market. Typically, these types of loans have been primarily offered to military families, the elderly, handicapped, or lower-income families, but anyone can get one. They are not just for first-time buyers either.
In fact, the FHA loan is the easiest loan that you can qualify for. They are available for both purchasing a new home and refinancing your existing home. It requires a low down payment and your credit does not have to be perfect, which makes things easier on you. Should you need to sell your home, your loan is "assumable" which means that the buyer can pick up where you left off.
If this type of loan would benefit your situation, Quest Loans can help you get the process started! Here is what you need to qualify:
-Have steady employment for the past two years.
-Have a valid Social Security number, be a U.S. citizen and be legally old enough to sign a mortgage depending on your state's age requirements
-Make a minimum down payment of 3.5% on your new house. Or you can put 10% down if your credit score is between 500 and 579. This money may be gifted, whereas other loans do not allow this.
-Have a property appraisal from an FHA-approved appraiser.
-The mortgage payment will need to be less than 31% of your gorss monthly income including principal, interest, property taxes and insurance.
-Monthly debt cannot be more than 43% of your monthly income, including mortgage, credit cards, car payments, student loans, etc.
-Have a minimum credit score of 500.
-Cannot have a bankruptcy within the past two years
-Cannot have foreclosure within last three years
There are a few disadvantages to the FHA loan since it does not hold the same strict standards of a conventional loan. It requires two kinds of mortgage insurance premiums, one of which is paid upfront in full or financed into the mortgage, and the other manifests as a monthly payment. Your house will also need to meet certain conditions and must be appraised.
Quest Loans is an FHA-approved lender and we are ready to help you get into your dream home! Do not let the fear of being able to qualify stop you from becoming a homeowner. Call us today to get started and we will be more than happy to answer any questions you have. 888-883-5252