Refinance Mortgage HQ

Wacky Mortgage Products vs Subprime Mortgages

admin — Sat, 19 May 2012 04:09:38 +0000

Should the mortgage crisis be blamed on subprime borrowers? Evidence shows that it only accounted for 34% of bad underwriting while more complicated and crazy mortgage products with rates that shot through the sky accompanied initially with very low teaser rates accounted for a majority of foreclosures.

http://business.theatlantic.com/2009/07/dont_blame_subprime_mortgages.php

WSJ article analyzing the foreclosure crisis.

http://online.wsj.com/article/SB124657539489189043.html

Debt Ratio

Andy — Fri, 18 May 2012 15:07:42 +0000

Debt Ratios is more than likely, the most significant and important aspect of lending to date. A Debt Ratio is defined as the percentage of debt compared to you gross income. In order to have a Debt Ratio of 20, your bills and required spending for a month must be equal to 20% of your gross income for that month. Every lender will have a varied debt ratio, depending on different factors.

Lenders have a hard task to face when calculating and basing a loan on your debt ratio. Lenders of course, would like to give you the biggest loan they can because the interest will be larger. The interest coming back on an $80,000 loan will be larger than a $40,000 loan, and even though it would profit them, there is still the chance that the borrowers won’t be able to pay back the loan. If the lender gave a higher loan, the monthly payment for the loan may be too great for the home owners and due to non payments; they may have to foreclose the home.

The task of the lender is to find a common ground in between these two. While making sure they give a loan sufficient enough to help the borrowers, they need to make sure that it’s a safe investment and that they will be able to pay back the loans. So overall, it’s the largest loan possible within the parameters of the loan being paid back in a timely manner. Once again, it’s also dependant on what the lender is comfortable with, if they believe that the borrowers will be able to pay back a higher loan, then they may take the risk, every lender is different. Lenders have to use the debt ratios and determine which loans go along with which debt ratios in order to make sure the loan payments can be realistically met, while helping the borrowers.

Are You a Victim of Mortgage Fraud?

admin — Fri, 18 May 2012 02:40:32 +0000

Mortgage fraud is a pretty serious crime considering so much money is involved in these transactions. Learn the terminology and the type of scams involved in defrauding borrowers and lenders, home buyers and sellers alike.

The FBI created a national team in December just to handle this type of crime.

http://www.nj.com/business/index.ssf/2009/07/mortgage_fraud_has_many_guises.html

Increase Mortgage Loan Amount with Your Bonus

Andy — Thu, 17 May 2012 12:51:24 +0000

Bonuses are a determining factor on the mortgage loan amount you can take out. However, it is very limited because bonuses have to meet strict requirements in ordered to be counted as steady income when applying for a loan.

The bonuses must be consistent throughout your documented tax returns. Several questions to consider is the frequency of the bonuses. Is it paid annually, quarterly, or even monthly; and what are you likely to be spending the bonus on? If the bonus frequency is applicable to your gross income, the lenders will help you secure the mortgage loan without making you jump through hoops. However, if your bonus is unpredictable then it’s harder to approximate the mortgage loan amount available to you. The last thing a lender wants to see is you not receiving a bonus for some reason, and then fall behind on monthly mortgage payments. All of a sudden, your mortgage loan becomes a risk of defaulting where the lenders might never collect the full amount of the original funds appropriated to you.

You should not factor in bonuses into debt ratios or additional income without proof of consistency. These can include paychecks, or letters from employers indicating how often future employee bonuses are paid. It varies from person to person, and job to job. Some jobs are heavily dependent on bonuses while others are not. The only way to make sure a bonus applies towards your mortgage loan amount is to talk to lenders and qualify your bonuses as documented steady income.

Lenders will also note that if you’re using your bonus to pay off bills and mortgage payments (aka in the lending industry as debt service), then they are willing to factor in the bonus to determine the mortgage loan amount that you can repay in the future. It’s a different story if you’ll be blowing your bonus on a boat or luxury vacations. Lenders actually want to offer you a bigger loan where they can make more money in return. Use this knowledge to your advantage, because well documented bonuses and your commitment to debt service can influence the loan amount that lenders will approve.

Manhattan DA Charges 25 in $100 Million Mortgage Fraud

admin — Thu, 17 May 2012 00:02:33 +0000

Imagine you are the bank where an empty lot is written up as a $500,000 two family home transaction, and you end up holding on to over-valued nonexistent property and mortgage contracts. These are the types of fraudulent transaction shams major banks were taken for over a period of 4 years.

http://money.cnn.com/2009/07/08/news/mortgage_fraud/

How Reverse Mortgages Work

admin — Wed, 16 May 2012 11:08:09 +0000

Kiplinger offers a detailed look into reverse mortgages. Seems like a fair deal except the heavy upfront cost of securing the reverse mortgage for your home. A reverse mortgage loan for $200,000 can cost as much as $20,000 and more. When you are 62 years or older, and if you need money immediately, this may be the best option to help you maintain your luxurious lifestyle.

http://www.kiplinger.com/magazine/archives/2009/08/reverse_mortgage_rescue.html

Home Affordable Refinance Program (HARP)

admin — Tue, 15 May 2012 22:38:06 +0000

The Home Affordable Refinance Program has been put in place by the Obama administrations to help steer delinquent home owners away from foreclosures. The early results of the program that is believed to be able to help 4-5 million families in dire financial situations is bleak. There were 13,000 HARP refinancing cases for June. At this rate it will need 300 months or 25 years to provide help to these 4-5 million families, meaning it will not meet the aggressive goal set for June 2010.

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/07/AR2009070702452.html

Terms of Your Mortgage Loan

admin — Tue, 15 May 2012 08:58:51 +0000

Did you know that 32% of home buyers did not know the terms of their mortgage loans? This is what got the housing market into a crisis the first place, a few years back. When you are borrowing larges sums of money for a once in a lifetime transaction, please do everyone a favor and read the contracts and obligations very carefully before signing the dotted line.

http://blogs.wsj.com/marketbeat/2009/07/07/goin-back-to-cali-home-sales-in-the-golden-state-are-looking-up/

Working With a Mortgage Broker

admin — Mon, 14 May 2012 19:44:12 +0000

Mortgage brokers have access to lenders, and sometimes wholesale lenders. It is your job to know that the mortgage broker you decide to work with are in good standing with banks and lending institutions. You have to understand that they are only looking out for their own self interest as to getting a referral fee to connect the borrower (you) with a lender; and little regard for your financial welfare.

Do your due diligence by checking up on the mortgage broker’s reputation, and comparable rates that they can get for you as a client.

http://www.mainstreet.com/article/moneyinvesting/real-estate/benefits-behind-mortgage-broker

Beazer Homes Pay $53M to Settle Lawsuit

admin — Mon, 14 May 2012 19:44:12 +0000

Homebuilder Beazer Homes pay out $53 million to settle US Department of Justice lawsuit on mortgage fraud. Beazer Homes will avoid further media attention, possible criminal prosecution and jail time by not allowing the lawsuit to make its appearance in court .

http://www.realestatechannel.com/us-markets/residential-real-estate-1/beaser-homes-usa-inc-mortgage-fraud-sec-ian-j-mccarthy-michael-t-rand-us-dept-of-justice-alex-finkelstein-1041.php