Katie Stout's Real Estate Blog

The number of loan servicers taking part in a state mortgage-aid program continues to grow roughly one year after its launch.  The Keep Your Home California program now has 55 participating mortgage servicers, up from 21 in June.

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Homeowners who had a mortgage loan on a primary residence and who believe were financially harmed during the mortgage foreclosure process by GMAC Mortgage, HSBC Finance Corporation, SunTrust Mortgage, or EMC Mortgage in 2009 or 2010 can request an independent review and potentially receive compensation.

The review is intended to determine if borrowers suffered financial harm directly resulting from errors, misrepresentations, or other deficiencies that may have occurred during the foreclosure process. The servicers are required to compensate borrowers for financial injury resulting from deficiencies in their foreclosure processes.

A number of servicers supervised by the Office of the Comptroller of the Currency (OCC) are also required to conduct independent reviews.

Borrowers are eligible for an independent foreclosure review if 

• the property securing the loan was the borrower’s primary residence;
• the mortgage was in the foreclosure process (initiated, pending, or completed) at any time between January 1, 2009, and December 31, 2010; and  
• the mortgage was serviced by one of the mortgage servicers listed here.

There are no costs associated with being included in the review; the review is a free program. Borrowers should beware of anyone who wants payment to assist with the independent foreclosure review or any other foreclosure assistance program.

Requests for review by the servicers’ independent consultants must be received by April 30, 2012.  Borrowers are encouraged to carefully consider the information about the review program to determine if they are eligible to participate.  

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Mortgage interest rates, near all-time lows, are likely to remain attractive throughout 2012.  That means opportunities for new home buyers and for homeowners who want to refinance.

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Welcome to this beautiful custom home siting on 1.21 acres. Close to town but with the space of the country. Almost 1900 square feet boasts on the main level two large bedrooms, a full bath, attached two car garage & ample storage. The oversized living room has a brick fireplace & opens to the deck in the back complete with views of the valley & a brick BBQ pit. Formal dining with bay window and bright open kitchen. Master Suite upstairs.

Interest rates are the lowest in decades, enticing many borrowers to shop for a loan.  Mortgage lenders adjust their rates based on perceptions of risk, so unless the borrower can show they’re a low-risk individual, the borrower is unlikely to qualify for a rate that matches those seen in recent advertisements and headlines.

Making sense of the story

• The rates quoted are averages drawn from a variety of financial institutions, and lenders use varied approaches to set them.  Consumers who want to try for the lowest rates available need to consider basic factors, such as credit score, points, property type, down payment, and length of the loan.
• Credit score: The ideal borrower has a FICO score of 740 or higher, which puts the individual in the best place for pricing.
• Points: The lowest rates usually are decreased by paying a fee called a point, or 1 percent of the loan amount.  Borrowers may buy points in order to get the best rates at many banks.  Points might make sense depending on the borrower’s financial situation and how long they expect to stay in the home.
• Property type: Borrowers planning to buy a duplex or a four-unit build likely will have a higher interest rate.  Condominiums also may have a rate premium rate, especially if they are newer or the down payment is less than 25 percent.  Lenders also may charge more if the borrower is not planning to live in the home.
• Down payment: Borrowers who put down at least 25 percent are more likely to obtain the best interest rates.  Lenders offer different breaks on rates if equity in the property is higher, so borrowers should ask what is available.
• Length of loan: Borrowers who are likely to move in a few years may want to look into an adjustable-rate loan with a low interest rate fixed for a few years, and adjusted afterword. 

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First-time home buyers planning to purchase a house later this year may have a better chance of qualifying for a mortgage if they have had a history of paying their rent on time.

Making sense of the story

• Last year, credit-reporting agency Experian added a section to millions of credit reports showing on-time rent payments and raised the credit scores of many people.  The company said that this year it would add in negative marks, including mentions of bounced checks or of tenants’ leaving before a lease was up.
• Incorporating rental payments into credit scores could affect millions of people who have not established credit histories through credit cards, student loan repayments, and other credit sources.
• Almost half of consumers considered “high-risk” experienced an increase of 100 points or more after their positive rental history was added, according to Experian’s rent bureau.  Those with average or higher scores did not experience major movement.
• Although it is still too early to show the effects of the new credit report, which began in December, the changes are intended to allow lenders and consumers to have greater transparency, according to Corelogic.
• People who have lost their homes to foreclosure and are now leasing may be able to rebuild their credit histories by being responsible renters.
• However, consumer groups and advocates are skeptical, noting that reports are sometimes riddled with mistakes and some landlord-tenant disputes may be difficult to capture in a credit report.  Rent may not have been paid, for example, because the furnace was left unrepaired for months.

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4090 Blue Lake Terrace
Half acre lot in Brooktrails listed for $12,000

1130 Elm Street sold for $158,350

Great location near schools and downtown. This three bedroom two bath home features living room, spacious dining room, family room with wood stove and a nice kitchen with tile countertops. Private backyard with covered patio and a one car detached garage and plenty of parking.  Buyers used a renovation loan and financed the costs of upgrading the home.  Call me today for more details.

Americans’ attitudes on a variety of issues are marginally better than one month ago, according to results from Fannie Mae’s December National Housing Survey. Despite overall low levels of optimism among Americans, consumer sentiment trended in a positive direction in the final months of 2011.

Americans who say the economy is on the right track rose by 6 percentage points since November, while the percentage who say the economy is on the wrong track dropped by 6 percentage points. When asked about housing, more Americans expect home prices to  to increase compared to November and, on average, Americans expect home prices to increase by 0.8 percent over the next year, up from an expected 0.2 percent increase last month.

Highlights of the survey include:

• Thirty-six percent of Americans say that mortgage rates will go up over the next 12 months, up 3 percentage points from November and was even with October.
• Seventy-one percent of respondents say it is a good time to buy a home (up 3 percentage points since last month), and 11 percent say it is a good time to sell.
• On average, Americans expect home rental prices to increase by 3.5 percent over the next 12 months, up from 3.2 percent in November.
• Five percent expect a decline in home rental prices over the next 12 months (tying May 2011 as the lowest point in the past 12 months), while 43 percent of respondents believe that home rental prices will increase.
• Thirty-one percent of Americans say they would rent their next home, while 64 percent say they would buy, up 1 percentage point from last month.

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Freddie Mac is giving mortgage servicers expanded authority to provide six months of forbearance to unemployed borrowers without Freddie Mac’s prior approval and up to an additional six months with prior approval.   This means unemployed borrowers may be eligible for up to 12 months of forbearance.  Freddie Mac’s forbearance options are being expanded at the direction of the Federal Housing Finance Agency and will take effect on Feb. 1.

Delinquent borrowers in an existing short term forbearance plan can be evaluated for an extended forbearance under the new policy.

Previously, Freddie Mac allowed servicers to grant up to three months of forbearance with no payment and without prior approval, or six months at a reduced payment with prior approval.  Longer forbearance required prior approval and was generally restricted to events such as natural disasters, permanent disability or long-term medical emergencies.

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