I see knew ads on TV talking about everyone can get an FHA loan. Don't believe it. You may be able to to but not EVERYONE can!
There are so many new guidelines to meet, the very best option is to get 3 Good Faith Estimate (ask specifically for a Good Faith Estimate) quotes base on the same criteria, like loan size, down payment... (they may be 3 FHA quotes instead of Conventional (basically non-FHA or VA)). Pick one and get pre-approved (that means submitting your full aplication so they can check your credit, cash and income). Pre -approved means that an underwriter has blessed off on the previous items and the house size you are trying to buy and the only thing left to do is to get the "property" approved with an Appraisal and Title work.
Know you are approved BEORE you go shopping for a house you can't get. Very, very important in todays market!
Who thinks up these programs! I would conservatively think that 90% of the people who can't afford their mortgage NOW, won't be able to afford (quaify) for it with this "new deal"! What was the New Deal in our history books?
Check it out!
"Consumers say the Regulations (as proposed in December) still leave too many loopholes for reckless lending to continue"....... Lenders say: " the proposals are too tight and will prompt them to further restrict credit"!
WHO RIGHT?
Keep in mind they're talking about "future" lending practices, not the guys who are already in trouble!
Here are the Rules proposed:
· Require Lenders to verify Income and Assets
· Prohibit them from engaging in a "pattern of practice" of making loans borrowers can't afford
· Limit Prepayment penalties
· Require escrow accounts for Taxes and Insurance
· Prohibit banks to pay Brokers unless compensation is disclosed
· Prohibit Brokers from coercing Appraisers into misstating a homes value!
Where do I start? There's no queston the Industry needs to be cleaned up. In my mind they should come up with "specific" rules not ones left to interpretation (which is how it is now)! Then whoever breaks the rules get prosecuted to the max! At least 10 years in prison in my mind!
"Brokers" are not the issue, "Brokers that break the rules" are the issue. Brokers keep the market competitive! I also think the consumers need to wake up. Get three bids from "lenders" you've been referred to (quit calling those late night "our rates at 4% guys", they should go to jail for life by the way!) and you will cut out most of the crap!
If the rules are too loose the Consumers will still be hurt and if they are too tight a lot of people won't be able to get a loan. It's definitely "ugly" out there!
John
This doesn't come along very often! Infact I've never heard of it!
Transunion (one of the three main credit bureaus) was caught violating the Fair Credit Reporting Act by "selling" lists with consumers personal and financial information for marketing purposes. The settlement applies to everyone that had an open line of credit from any lender from January 1, 1987 to May 28, 2008. "Pretty much all of us , right"?
Go to www.listclassaction.com from now until September 24th to sign up. The basic options will be six months of "credit monitoring" (access to your credit report and "TransUnion" score, and 24 hour notification of any "critical " changes in your credit report). You also may have the option to receive money from the Class Action suit and file a suit individually! If you choose the nine month option you are also supposed to get the option of a "mortgage simulator" to show how lenders would score you! I just signed up but didn't see that. I also didn't read through the whole settlement, you might want to.
There is supposed to be a final Court hearing September 10th! You should get norified by email when your benefits can start!
John the Mortgage and Credit Coach
PS. Hope you all had a great Fourth!
Heading up North for the long weekend, won't be on the "VOX", y'all behave and don't hurt yoursleves with those Firework things?
Business Week/June 30, 2008
Imagine a world where its not just how you make your payments but WHAT you buy, that will affect your score and a Lenders willingingness to lend!
The FTC (Federal Trade Commision) is suing CompuCredit (a credit card issuer) for "deceptive marketing" practices. The allegations are that CompuCredit is monitoring your purchase habits like: bars, marraige counselors, massage parlors...but they don't disclose that these "things" you frequent or purchase could affect your ability to borrow in the future. The main dispute is that we are not getting told that this might be going on!
Yea! The FTC is finally getting off their butts and being pro-active!
I can't imagine this will really hurt us in the future.....! But what's really scary to me, is that there's so much "data" on us out there and we really don't have any idea what its being used for!
John
PS. Take steps to protect "your data" at all times. Never give out personal information to an individual or company that you did not solicit!
Credit: Pull your credit report for FREE every year at Annual Credit Report! Select one "Bureau" every 4 months, instead of all at once. Better opportunity to catch something "slipping" in! If you want to see your scores (they tend to be a little higher when YOU pull them as opposed to a "Lending Instutution") try MYFICO. Watch out for "Credit Repair Organizations"! You cannot legally remove accurate data from your credit report.
Mortgage: Get 3 "Good Faith Estimates" and compare. Only let ONE of them pull your credit and give you a copy, with scores! Tell the other two to base their quotes on it. Go to Freddie Mac and see where 30 year rates are currently! Demand your "settlement statement" ( HUD-1) at least two days before closing, these are the "final" numbers and "closing" is the LAST place and time you want surprises!
Foreclosure: Talk to your Attorney Generals office and find out if they can help talk to your Lender or recommend someone. If you are still suffering whatever issues got you to this point, the Lender will probably not try and help. Talk to your Mortgage guy about "FHA SECURE", it may be an "out"!
Divorce: Never come away with "Joint" debt! "Close out" joint cards and move the debts that are yours to your own card and have them do the same. Also if you are the one leaving the house, get your ex to refinance in their "name only" and get you off the "Note" (it can be done before the divorce), until that happens do not give up your ownership rights with a "Quit Claim"! Do these things before you "settle" and sign the Decree, never trust them to do it later! There is a reason they are called "EX"! Trust isn't one of them! Again, monitor your credit report, they probably know your SSN and it wouldn't be the first time that they applied for credit in your name AFTER the divorce!
Bankruptcy: Send your BK paperwork to all three Credit Bureaus immediately: Transunion, Experian, and Equifax ! Monitor your credit with Annual Credit Report for at least two years to make sure the "old stuff" is off and nothing else "slipped" in, like a judgement! If you do see a judgement and it was part of your BK, get it "removed"!
Identity Theft: The new kid on the block! Go to www.ftc.gov and find out what to do. Don't hesitate, it only gets worse. You could sign up for "credit monitoring". Lots of them out there! The three "Bureaus" above can help. You can also "Freeze" your credit, inconvenient and costs money, but no one will "get in"! Takes about 3 -days to take it on or off, if you are applying for credit.
As Always your Mortgage and Credit Coach,
PS. This "stuff" can be tough! But if you face your "fear" , it dies!
Good to know you're right sometimes! Recent article on CNN Money said Foreclosures are expensive for Banks: "at least $50,000". I think I said $40,000 + some blogs ago, but I was close!
Really good site to warn you about Lending practices across the country and across the different industries:
Center For Responsible Lending . These guys have good information and email notification about: Preditory Lending, Payday Lending (borrowing against your paycheck, 36% interest, holy crap!), Credit Card, Foreclosure legal assistance, Subprime costs to the rest of us....
US Open Golf and Father's Day....perfect combination! Will tiger be ready? His "ugly" game is still better than most! Gentlemen, Have an amazing Day! Ladies, have fun treating your Man to that amazing day!
John
I think one things for sure: we have all either have been touched (and not in such a good way!) by this "market" or know someone who has. I think it will be late '09-'10 before we start to make any kind of real headway. But we are still in for some really bad days short-term. Hiring is down, gas and food are up, homes are down, mortgages are tight, second mortgages are getting tighter.... I listened to 6 "market/economic gurus Friday night! Totally split on where we're going. As Gomer Pile would says, "surprise, surprise..!
New blood in that Oval Office might offer some relief...but if the two branches can't "play nice", we're screwed, again! We have to balance the budget, don't we have to do that at home and our businesses? What the hell! I hope it comes in the form of less spending, but there are only two choices to get it balanced, right! I think housing is always a great bet long term, the only issue with a market like this is when to buy? Monitor your neck of the woods and look for the inventory of listings to get down to 60 days or less (meaning enough buyers to purchase all the listings in 60 days).
In the mean time fix any financial or credit issues you have so you will be in a position to take advantage. Keep your house payment @ 25% of your gross income, I have seen some qualify at 50%, don't do it! Get rid of your non-deductible debt. Don't get involved in "multiple offers", have the house "inspected" (different than an appraisal), take a 30 year fixed, refi if they go lower, don't pay it off sooner if you have the dicipline to eliminate non-deductable debt and max every retirement account you can. If you still have money left over invest it in taxable places (you can usually get at this money if you need to,always helps). If you get a mortgage now, you are borrowing money at about 4.5% depending on your "tax bracket", you can make this all day long with long term investments. Keep in mind when you ay your mortgage down and the market tanks liks this, you can't get at the equity, and if the "values" went down you
lost it for now anyway! More ARMs will adjust this year than last, Kevin knows of what he speaks, the foreclosure volume will surely double in the foreseable future. That inventory will get added to what's already there and "around and around we go". Look for the Mortgage insurance companies to start going down! Keep your "House" in order, you will be fine.
PS. Donna Summer says it best " I (we) will Survive"! It was her wasn't it????
Some of you have asked in the past about "opportunities" with this foreclosure mess! I don't know anyone doing it but
http://money.cnn.com/ had a video presentation today of a builder and someone that I think was a landscaper, getting hired on by Banks to clean up the properties both inside and out for sale! They didn't talk about what they charge the banks, but one lady said she expected their revenue to go from $50,000 to $500,000 this year!
A jump that any CEO would be proud of!
PS. Home Equity loans are tightening up as well, next topic to cover. Let me know if you all have questions or topics you'd like to see covered: on Mortgages, Credit, Real Estate or the impact of Foreclosure and Bankruptcy on these areas as well.
