September 25th, 2009 5:44 PM by Lehel Szucs
Obama bolsters program that insures home loans
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Uncle Sam bets the house on mortgages
A reckoning on option ARMs
Feds plan to tinker with mortgage interest reporting
Short sales spread across real estate market, leaving frustration in their wake
As more homeowners find themselves underwater -- owing more on their mortgage than their home is
currently worth -- and unable to make the monthly mortgage payments, many are turning to short sales,
which allow a homeowner to sell their home for less than owed on the mortgage. Short sales can be a winwin
situation for all parties, because they enable home buyers to purchase properties in desirable
neighborhoods and at favorable prices.
KEEP THIS IN MIND
does not receive the full amount owed on the mortgage, it also does not incur the costs of
foreclosure and/or eviction, if necessary. Many homeowners also prefer short sales because it is
less damaging to their credit scores than a foreclosure. However, many real estate experts say
that the majority of banks are reluctant to approve short sales, and often let properties go into
foreclosure, even when there are reasonable offers on the property. In addition to considering the
price, most lenders also take into consideration whether the homeowner can demonstrate financial
hardship. If the homeowner is capable of making payments, many lenders will try to work out a
loan modification, rather than a short sale.
properties are likely to be better maintained, as most owners may still live in the home.
paperwork. Due to the large number of offers on short sales, many take as long as a few months
to receive approval. If information or required forms are missing or incomplete, the bank may set
the offer aside, which could delay the process and cause the property to go into foreclosure. To
expedite the process, sellers should work closely with their REALTOR
buyers during the transaction. A seasoned REALTOR
between the seller and the lender, and lead to a successful transaction.
property and willing to accept any offer, it is ultimately up to the lender to determine if, and at what
price, the property can be sold. Home buyers should work closely with their REALTOR
In Other News…
San Francisco Chronicle
U.S. home prices rise 0.3 percent in July
U.S. home prices rose slightly in July from a month earlier, according to a government index, further
evidence the housing market is stabilizing.
1.4 million Americans score $8,000 tax credit
More than 1.4 million Americans have already claimed the new tax credit for first-time home buyers,
according to a report from the Internal Revenue Service.
The Wall Street Journal
Want the home buyer tax credit? Don’t shop for furniture
With the deadline on the first-time home buyer tax credit looming, plenty of buyers are under contract and
looking to close before Nov. 30. Excited to move into a new home, some of these first-timers start hitting the
stores shopping for new furniture, appliances, or curtains. Big mistake.
Los Angeles Times
Homeowners who “strategically default” on loans a growing problem
Research using a massive sample of 24 million individual credit files has found that homeowners with high
scores when they apply for a loan are 50% more likely to “strategically default”—abruptly and intentionally
pull the plug and abandon the mortgage—compared with lower-scoring borrowers.
$30 billion home loan time bomb set for 2010
Next year, many option ARM payments will begin to readjust, slamming borrowers with dramatically higher
monthly mortgage bills. Analysts say that could unleash the next big wave of foreclosures—and home-loan
data show that the risky loans were heavily used in the Bay Area.