Category Archives: Mortgage Information

Loan Modification Based on Amount Owed

Posted on January 26, 2014 | Leave a comment

Q: I paid my 15-year mortgage for eight years before I suffered a hardship and had to stop making payments. I am trying to get a loan modification and want to know what happens to the equity in my home. And is the modification done on the original loan amount or just the remaining balance of the loan?

A: When your lender looks to modify your loan, it considers your budget to get a payment that is affordable for you to make. Lenders estimate that a person can devote 31 percent of their household income toward principal, interest, taxes and insurance. You do keep your equity. The loan modification amount will be based on what you still owe on the loan, plus the accrued interest and penalties for the time you did not pay.

To get the payment to an affordable amount, your bank will first look to lower your interest rate and will adjust the remaining term of your loan only if it is necessary to spread the payments over a longer time. It’s easy to see what your payments would be if the loan mod is approved by applying the 31 percent formula to your income.

disclaimer: for information and entertainment purposes only

A Big Year for VA Loans

Posted on January 21, 2014 | Leave a comment

The number of loans guaranteed by the Department of Veterans Affairs reached a record high in 2013, perhaps marking the peak of an upward trajectory that began after the housing market collapse.

The department guaranteed nearly 630,000 mortgage loans in fiscal year 2013, setting a new high just as the program enters its 70th year, said Mike Frueh, the director of the V.A.’s Loan Guaranty Program. The average loan was about $225,000, an amount that reflects the program’s value to “working-class America,” he said.

Contact the real estate appraisers at www.scappraisals.com; they are VA approved appraisers.

Calling the program’s growth “pretty incredible,” Chris Birk, the executive editor at Veterans United Home Loans, an online broker of V.A. loans, estimated that total loan volume has risen 372 percent since fiscal 2007.

Another factor is the tough lending climate of the last six years, which has made a V.A. loan the most viable option for many service members. “It’s become so much more difficult for military personnel and veterans to qualify for conventional financing,” Mr. Birk said. “This is the only path to homeownership for many.”

One big advantage for first-time buyers is that the loans do not require a down payment. About 90 percent of all V.A.-guaranteed purchase loans are made without any money down. “Our average borrower has about $7,000 in liquid assets at the time they close the loan,” Mr. Frueh said. “That’s not enough to make a significant down payment.”

Disclaimer: for information and entertainment purposes only

Feds Want to Know if You had Closing Woes

Posted on January 17, 2014 | Leave a comment

The federal government has a real estate question for consumers who’ve bought or refinanced homes that’s certain to generate more than an earful: Were there any problems when you went to close the deal?

Any last-minute glitches or surprises that delayed the settlement, required unexpected negotiations or, worst of all, blew up the sale or refi? Did you get your settlement sheet in advance so that you could review the documents intelligently? Were there any errors or discrepancies that popped up — charges that were considerably higher than you had expected, loan-related fees or an interest rate that differed from what you thought you had signed up for? Was the whole process pleasant? Was it “empowering”?

Wow. Talk about stirring up hornets. The Consumer Financial Protection Bureau, which has broad regulatory powers in the real estate settlement arena, wants to know whether there are common problems that need to be fixed. If so, it may make what it euphemistically calls “interventions” in order to right what seems to be wrong.

The bureau also wants to hear from realty professionals, lenders, title insurance and escrow agents, attorneys and others who play roles in closings on homes — the people who produce, bless and witness the signings of mounds and pounds of paper associated with the settling of America’s home transactions.