Monday, August 30, 2010

Home Buyer Tax Credit Extended??

Well its here. Just as I thought, the Obama administration is thinking that the home buyer tax credit should be extended. It does not talk about prices. It’s a HOME BUYER TAX CREDIT and possibly to Investors.

The Obama administration plans to set up an emergency loan program for the unemployed and a government mortgage refinancing effort in the next few weeks to help homeowners after home sales dropped in July, Housing and Urban Development Secretary Shaun Donovan said.

“The July numbers were worse than we expected, worse than the general market expected, and we are concerned,” Donovan said on CNN’s “State of the Union” program yesterday. “That’s why we are taking additional steps to move forward.”

The administration will begin a Federal Housing Authority refinancing effort to help borrowers who are struggling to pay their mortgages, and will start an emergency homeowners’ loan program for unemployed borrowers so they can stay in their homes, Donovan said.

“We’re going to continue to make sure folks have access to home ownership,” he said.

Sales of U.S. new homes unexpectedly dropped in July to the lowest level on record, signaling that even with cheaper prices and reduced borrowing costs the housing market is retreating. Purchases fell 12 percent from June to an annual pace of 276,000, the weakest since the data began in 1963.

Sales of existing houses plunged by a record 27 percent in July as the effects of a government tax credit waned, showing a lack of jobs threatens to undermine the U.S. economic recovery.

House Sales Plummet

Purchases plummeted to a 3.83 million annual pace, the lowest in a decade of record keeping and worse than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed last week. Demand for single-family houses dropped to a 15-year low and the number of homes on the market swelled.

U.S. home prices fell 1.6 percent in the second quarter from a year earlier as record foreclosures added to the inventory of properties for sale. The annual drop followed a 3.2 percent decline in the first quarter, the Federal Housing Finance Agency said last week in a report.

Donovan said on CNN yesterday that it is too soon to say whether the administration’s $8,000 first-time homebuyer credit tax credit, which expired April 30, will be revived.

“All I can tell you is that we are watching very carefully,” Donovan said. “We’re going to be focused like a laser on where the housing market is moving going forward, and we are going to go everywhere we can to make sure this market stabilizes and recovers.”

Reviving the tax credit would “help enormously” in the effort to fight foreclosures and revive the economy, Florida Governor Charlie Crist said on the same CNN program. Florida has the third-highest home foreclosure rate in the country, with one in every 171 housing units receiving a foreclosure filing this year.

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Thursday, August 26, 2010

Top 5 Mortgage Options for Home Buyers

While many great deals exist in today's real estate market, securing the optimal mortgage is a critical part of your home purchase decision.

As a Member of the Top 5 in Real Estate Network®, I, along with my team, have worked with many home buyers over the years and am well versed on the factors in every mortgage loan package that will determine whether or not you can afford the house you want to buy. The most important things to take into consideration are: interest rate, points, mortgage type, closing costs and fees, and down payment and mortgage insurance. Here’s a closer look at each:

Interest Rate: The interest rate determines the amount of your monthly payment. Keep in mind that different lenders offer different interest rates, so it is important to shop around. Generally, a short-term or adjustable-rate loan will offer a lower interest rate because you agree to repay the lender more quickly or to pay fluctuating rates.
Points: Points are fees charged by the lender to originate your loan. A point equals one percent of the total mortgage amount. Lenders will charge different numbers of points for different loans, so it is important to understand how many points a lender will be charging. For example, in some cases, lenders may advertise very low interest rates, but build a high point charge into the cost of issuing the loan, making the deal less valuable than a loan at a higher interest rate.
Types of Mortgage Options:

Fixed Rate. On a fixed-rate mortgage, the interest rate does not change for the entire life of the loan.
Adjustable Rate. Adjustable rates, on the other hand, are interest rates that fluctuate based on market conditions. Since no one knows how the market will behave, they are riskier than fixed-rate loans. Over the life of the mortgage, you could end up paying more or less than you would have with a fixed-rate loan.
Balloon. The next common type of mortgage is a balloon payment loan. A balloon payment loan allows you to make relatively small monthly payments for an initial period, but requires a lump-sum payment toward the end of the term. These are risky to consider unless you are confident that you can either refinance the loan or sell the home at the end of the initial loan period.

Closing Costs: Closing costs and fees are additional amounts that the buyer and seller must cover during the course of the mortgage loan transaction. They include items like credit report fees, appraisal fees, title search fees and title insurance.

Down Payment and Mortgage Insurance: When searching for the right type of mortgage for you, the amount of your down payment, the need for private mortgage insurance (PMI) and other factors, such as whether you are a first-time home buyer, a teacher or a peace officer, will also affect your monthly mortgage payment.

A professional real estate agent, such as a member of the Top 5 in Real Estate Network®, or a trusted mortgage broker can help you decide what makes the best financial sense for you. Please e-mail our team for more information and be sure to pass this email on to others who might be in the market for a mortgage.

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Wednesday, August 25, 2010

Clean Up Your Credit !!!!!!

7 Tips for Improving Your Credit

Here's how to clean up your credit so you get the least-expensive home loan possible.

Getting the loan that suits your situation at the best possible price and terms makes homebuying easier and more affordable. Here are seven ways to boost your credit score so you can do just that.

1. Know your credit score

Credit scores range from 300 to 850, and the higher, the better. They're based on whether you've paid personal loans, car loans, credit cards, and other debt in full and on time in the past. You'll need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms.

You're entitled to a free copy of your credit report annually from each of the major credit-reporting bureaus, Equifax (http://www.equifax.com), Experian (http://www.experian.com), and TransUnion (http://www.transunion.com). Access all three versions of your credit report at www.annualcreditreport.com (http://www.annualcreditreport.com). Review them to ensure the information is accurate.

2. Correct errors on your credit report

If you find mistakes on your credit report, write a letter to the credit-reporting agency explaining why you believe there's an error. Send documents that support your case, and ask that the error be corrected or removed. Also write to the company, or debt collector, that reported the incorrect information to dispute the information, and ask to be copied on any materials sent to credit-reporting agencies.

3. Pay every bill on time

You may be surprised at the damage even a few late payments will have on your credit score. The easiest way to make a big difference in your credit score without altering your spending habits is to diligently pay all your bills on time. You'll also save money because you'll keep the money you've been spending on late fees. Credit card or mortgage companies probably won't report minor late payments, those less than 30 days overdue, but you'll still have to pay late fees.

4. Use credit carefully

Another good way to boost your credit score is to pay your credit card bills in full every month. If you can't do that, pay as much over your required minimum payment as possible to begin whittling away the debt. Stop using your credit cards to keep your balances from increasing, and transfer balances from high-interest credit cards to lower-interest cards.

5. Take care with the length of your credit

Credit rating agencies also consider the length of your credit history. If you've had a credit card for a long time and managed it responsibly, that works in your favor. However, opening several new credit cards at once can lower the average age of your accounts, which pushes down your score. Likewise, closing credit card accounts lowers your available credit, so keep credit cards open even if you're not using them.

6. Don't use all the credit you're offered

Credit scores are also based on how much credit you use compared with how much you're offered. Using $1,000 of available credit will give you a lower score than having $1,000 of available credit and using $100 of it. Occasionally opening new lines of credit can boost your available credit, which also affects your score positively.

7. Be patient

It can take time for your credit score to climb once you've begun working to improve it. Keep at it because the more distance you put between your spotty payment history and your current good payment record, the less damage you'll do to your credit score.

Other web resources

How FICO scores are calculated (http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx)

Answers to frequently asked credit report questions (https://www.annualcreditreport.com/cra/helpfaq)

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New Regulations at Fannie Mae

We Need New Systems and Checks in Place to Prevent What has Happened to Housing!!

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Existing-Home Sales Post Worst Showing in More than a Decade

Sales of previously owned homes in the United States plummeted 27.2 percent in July compared to the previous month, according to data released Tuesday by the National Association of Realtors (NAR).

The market was bracing for a noticeable falloff as payback for the homebuyer tax credits that pulled sales forward into the spring months, but the reality was worse than projected – reportedly nearly double the decline analysts were expecting.

The July plunge pushed existing-home sales down to an annual rate of 3.83 million units, compared to the 5.26 million pace recorded in June. The latest sales numbers are 25.5 percent below July 2009, and are at their lowest level since May of 1995.

Lawrence Yun, NAR’s chief economist, warned that a hiatus for home sales is likely to last through September, despite extremely affordable housing conditions and rock-bottom mortgage rates.

He remains optimistic, however, that these factors could propel a quick sales recovery provided the economy adds jobs. That boost could be farther away than it is near, though, given the deep erosion of the nation’s employment picture and recent increases in jobless claims.

Yun did note that “even with sales pausing for a few months, annual sales are expected to reach 5 million in

2010 because of healthy activity in the first half of the year.”

With the poor sales showing, total housing inventory at the end of July increased 2.5 percent to 3.98 million existing homes available for sale, which represents a 12.5-month supply at the current sales pace. That’s up significantly from an 8.9-month supply in June, however raw unsold inventory is still 12.9 percent below the record of 4.58 million homes in July 2008.

Price points for pre-owned homes were the one bright spot in NAR’s report, holding steady despite the drop in sales. The national median existing-home price last month was $182,600, up 0.7 percent from a year ago.

Yun credits the homebuyer tax credits for keeping home values stable for the past 18 months despite heavy job losses. He says home values are now back in line relative to income, and he doesn’t expect any measurable change in prices going forward.

According to NAR’s market data, distressed home sales accounted for 32 percent of July’s transactions; they made up 31 percent in July 2009. First-time buyers purchased 38 percent of homes last month, down from 43 percent the month prior. Investors accounted for 19 percent of sales, with all-cash purchases rising from 24 percent in June to 30 percent in July.

Nigel Gault, chief U.S. economist for IHS Global Insight, commented, found the latest existing-home sales numbers disconcerting.

He said, “The most worrying feature of the recent housing data is the absence of evidence of any underlying improvement in sales. All of the action earlier this year appears to have been driven by the tax credit. Mortgage applications for purchase have been moving sideways since June even as 30-year mortgage rates have headed into the low 4s….[A] sustained upturn will depend on an improvement in the jobs market, which at the moment is slowing down rather than gathering pace.”

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Is defaulting from your mortgage in westchester county really your best option?

Miami, FL- Many homeowners, when presented with an underwater mortgage situation, decide to walk away from their mortgage, but is this really their best option?

Underwater mortgages are those where the homeowner owes more on the mortgage than the home's current value. When a homeowner walks away from their debt, they are turning to "strategic defaults". Although this may be attractive to some, financial experts warn that the cost of skipping out on mortgage debt can be really high. Therefore, a homeowner must be aware of the risks and complications he or she is entering into when he or she walks away from a mortgage.

The American Bankers Association recently warned homeowners about the consequences of strategic default, including the possibility of the bank obtaining a judgment to pursue the homeowner's assets, such as bank accounts, cars and investments.

Among the areas affected through a mortgage default are: A negative impact on Credit score, difficulty getting a new mortgage, and in some cases tax liability.

"A foreclosure is one of the stronger predictors of future credit risk," says Craig Watts, public affairs director of FICO. Unfortunately, foreclosures stay on a credit report for 7 years. The score can begin to recover gradually but it does take time. The situation is improved a little if the consumer stays current on all other payments on other credit accounts, explains Watts.

Watts says the impact of a foreclosure on a credit score depends on other factors in the borrower's credit history. The ABA says a foreclosure drops a FICO score by 100 to 400 points.

Furthermore, getting a new mortgage can be a challenge for those who decide to go through the defaulting process. Peter Fredman, a Berkeley, Calif., consumer attorney, says Fannie Mae and Freddie Mac will not approve a mortgage within four years after foreclosure, while the ABA says it can take three to seven years to qualify for a new mortgage.

And finally, some cases can be affected by tax liability as state taxes still may be due on unpaid debt.

There is definitely enough factors that can make a homeowner think twice before defaulting on a mortgage, however, the situation is different in every state, and some states are more risky than others.

"The first question for anyone considering a strategic default is whether the homeowners will be liable for the debt anyway," says Fredman "Each state has different rules."
Michele Lerner, from foxbusinessnews.com explains that “non-recourse laws protect homeowners in some states. When a borrower defaults in one of these states, the lender can take the home through a foreclosure but has no right to any other borrower assets. (Home equity loans are not eligible for this protection unless they were used as part of the home purchase.)

THE CRECCO COMPANIES

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Anthony J Crecco

Short Sale and Loan Modification Expert

Thornwood NY 10594

914.269.8184

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Nearly Two-Thirds of Defaulted Mortgages Untouched- Westchester County

According to a new report from state attorneys general and bank supervisors from across the country, more than 60 percent of homeowners with seriously delinquent loans are still not involved in any form of loss mitigation with their servicer.

The ratio is disconcerting considering the group also found that one of servicers’ primary loss mitigation options today, loan modifications, are resulting in significant payment reductions with fewer redefaults.

The State Foreclosure Prevention Working Group says loans modified in 2009 are 40 to 50 percent less likely to be seriously delinquent six months after modification than loans modified at the same time in 2008.

“This improvement in loan modification performance suggests that dire predictions of high redefault rates may not come true,” the group said in a paper released Tuesday. “This positive trend suggests that increased use of modifications resulting in significant payment reduction has succeeded in creating more sustainable loan modifications.”

The consortium of state regulators and chief attorneys also found that recent modifications that significantly reduce

the principal balance of the loan have a lower rate of redefault compared to loan modifications overall, suggesting that servicers should strategically increase their use of principal reduction modifications to maximize prospects for success.

Principal writedowns, though, have been slow in finding their way into the mod equation. The group’s study shows that only one in five modifications reduce the loan principal, and in fact, some 70 percent actually increase the loan amount by adding servicing charges and late payments to the loan balance.

The government’s Home Affordable Modification Program (HAMP) recently introduced a principal reduction alternative to its standard waterfall to give servicers the option of prioritizing the reduction of principal, but the state group says “the optional nature of this alternative and its inapplicability to GSE loans will likely significantly limit its impact in the HAMP program.”

Three years into the foreclosure crisis, with just over a third of distressed homeowners working with their servicer’s loss mitigation departments, the State Working Group says it anticipates hundreds of thousands of foreclosures will occur later this year unless improvements are made in foreclosure prevention efforts.

“The report certainly indicates there are positive developments with regard to loan modifications,” said Neil Milner, president and CEO of the Conference of State Bank Supervisors and a member of the Foreclosure Prevention Working Group.

Milner added, “However, there is still a tremendous amount of work to be done to prevent unnecessary foreclosures. Servicers must continue to perform meaningful outreach to those homeowners who are seriously delinquent and to perform modifications with significant principal reduction.”

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Monday, August 23, 2010

Home Sales Collapse

Home sales collapsed after a federal tax credit for buyers expired in April. Since then, the manufacturing-led expansion, which began in the second half of 2009, has been waning, with jobless claims rising and factory orders falling.

“If foreclosures <http://www.reodomains.com/emailmarketer/link.php?M=5372945&N=299&L=10&F=H> continue to mount and depress home prices, that could send the economy back into a recession,” said Celia Chen, an economist who tracks the industry for Moody’s Analytics Inc. “The housing market and the broader economy are closely intertwined.”

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Saturday, August 21, 2010

Short Sale Myths in Westchester County NY- GET THE REAL FACTS!!!

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Friday, August 20, 2010

BofA Leads Industry in Completing Home Affordable Modifications

The number of permanent Home Affordable Modification Program (HAMP) mortgage restructurings completed by Bank of America through July has reached more than 76,000, a number that BofA says continues to lead the industry.

In addition, nearly 100,000 Bank of America customers have received non-HAMP modifications this year, including many that did not qualify under the federal program.

“When a customer is found to be ineligible for HAMP or falls out of a trial modification, we consider an alternative

home retention program and, if no viable solution is available, a dignified exit from homeownership,” said Rebecca Mairone, default servicing executive for Bank of America Home Loans. “HAMP guidelines are quite specific with regard to the debt-to-income ratio, owner-occupancy, trial payment performance, and other requirements. But in many cases, we may be able to provide these customers with other homeownership retention solutions, subject to the mortgage investor’s guidance and approval.”

According to a statement from Bank of America, home retention is the company’s first goal, but it is enhancing programs that provide borrowers with a dignified exit from homeownership when retention options are no longer a possibility, such as using short sales or deeds-in-lieu with possible relocation assistance costs.

During the second quarter of this year, the North Carolina-based company says it completed 25,000 short sale transactions as alternatives to foreclosure for struggling homeowners.

Since January 2008, Bank of America has completed more than 665,000 mortgage modifications through all programs, including 590,000 via proprietary solutions, according to the company.

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Credit Scoring Good Credit Translates into Lower Rates for the Consumer

In the 1960s, Fair Isaac Corporation started working on a system lenders could use to evaluate the likelihood of receiving repayment on loans. Prior to that, it was really a matter of trusting an individual to be a "man of his word," so to speak. Fair Isaac sought to take human error out of the equation with a reliable system that could determine whether or not consumers were truly worthy of credit, and thus FICO was born. This evolved to become the standard for lenders by the 1980s.

Credit scoring has an enormous impact on a borrower's ability to purchase a home. It can mean the difference between getting a good interest rate and the home of their dreams, or whether they even qualify at all. For this reason, it is important for borrowers to understand the credit scoring process, and to know what their credit score is when they look to obtain mortgage financing.

What the credit scoring model seeks to quantify is how likely the consumer is to pay off their debt without being more than 90 days late on a payment at any time in the future. Credit scores can range between a low score of 350 and a high of 850. The higher the client's score is, the less likely they are to default on their loan. Only a rare one out of approximately 1300 people in the United States have a credit score above 800. These are the slam-dunk clients that walk away with the best interest rates. On the other hand, one out of eight prospective home buyers are faced with the possibility that they may not qualify for the loan they want because they have a score between 500 and 600.

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Thursday, August 19, 2010

New Lead Rule Regulations

Remodeling? New Lead Regulations You Need to Know About

While we're all aware of the health risks posed by lead, you might not realize that even common renovation projects can be hazardous in terms of lead. According to the U.S. Environmental Protection Agency (EPA), activities like sanding, cutting and demolition can create dangerous lead dust and chips by disturbing lead-based paint, which can be harmful to both adults and children.

As a Member of the Top 5 in Real Estate Network®, I, along with the rest of my team, am committed to keeping our clients informed on current regulations pertaining to home safety issues. To protect against the lead risk, on April 22, 2008, EPA issued a rule requiring the use of lead-safe practices and other actions aimed at preventing lead poisoning. Under the rule, as of April 22, 2010, contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child-care facilities and schools built before 1978 must be EPA certified and must follow specific work practices to prevent lead contamination.

If you are embarking on a home-improvement project, be sure to use certified renovators who are trained by EPA-approved training providers to follow lead-safe work practices. Lead dust can form when lead-based paint is dry scraped, dry sanded or heated. Dust also forms when painted surfaces bump or rub together. Lead chips and dust can get on surfaces and objects that people touch. Settled lead dust can re-enter the air when people vacuum, sweep or walk through it.

Make sure that your renovators employ the following practices - and you, too, if you're a do-it-yourselfer:

Contain the work area
Minimize dust
Clean up thoroughly

According to the EPA, to permanently remove lead hazards, you must hire a certified lead "abatement" contractor. Abatement (or permanent hazard elimination) methods include removing, sealing or enclosing lead-based paint with special materials. Just painting over the hazard with regular paint is not enough.

For more information on the dangers of lead and the new regulations regarding remodeling, please visit www.epa.gov, or e-mail our team directly. We encourage you to pass this important information along to anyone you know who might be renovating their home soon.

Sincerely,

Anthony Crecco & Joanne Ricciardella
Crecco Real Estate
Office: 914-449-6547
Mobile: 914-469-1861
anthony@creccorealestate.com
http://www.CreccoRealEstate.com

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