The U.S. House Judiciary Committee could vote on a bill as early as next week that would make changes to bankruptcy law aimed at helping borrowers with subprime loans avoid foreclosure, the body’s chairman said Tuesday. Consumer groups have thrown their full support behind the measure, saying that it could help 600,000 homeowners avoid foreclosure in the next two years. The banking industry, however, has lobbied intensely against the measure, arguing that it would increase the cost of credit and create confusion in the market for mortgage debt because loan terms would be less reliable.

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With thousands of troubled borrowers facing foreclosure, two mortgage industry competitors are putting aside some of their differences and joining forces. Countrywide Finance, announced it’s partnering with the Neighborhood Assistance Corporation of America (NACA), a gadfly/community advocacy group that has been its arch enemy for years. “A lot of people have been talking about saving people’s homes,” Bruce Marks, NACA’s CEO said. “Today, we have the solution that can act as a model for saving hundreds of thousands of people’s homes.” The initiative overlaps with the program announced on Tuesday by Countrywide (Charts, Fortune 500) where it would arrange refinancings, restructurings and rate reductions for adjustable rate mortgage (ARM) borrowers. But the partnership with NACA would apply to all the mortgage lender’s clients: prime and subprime, fixed and adjustable. (more…)

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When a mortgage borrower is unable to make the required payments, the servicing agent has an obligation to the owner of the mortgage to resolve the problem in the way that is least costly to the owner. The usual method is foreclosure, but an alternative is to modify the loan contract to make the payment more affordable. In making their decisions, loan servicers usually ignore an asset possessed by the borrower that could shift it from foreclosure to modification. This asset is the right to a share of the future appreciation in the value of the borrower’s house. Borrowers with payment problems who have a lot of equity in their homes have the most to gain from pledging a share in future appreciation. Such borrowers are otherwise unlikely to qualify for a contract modification because foreclosure will be less costly to the investor. Borrowers in trouble, however, can’t assume that the servicer will take the initiative in proposing any modification deal, let alone a more complex variety that includes a pledge of future appreciation. The culture of loan servicing discourages such initiatives because they raise costs and do not generate any additional revenue.

search for : mortgage borrower, foreclosure, future appreciation

September sales of existing homes fell by double the forecast. These sales are measured by closings of contracts written in the months before, and the mortgage crunch did not bite until mid-August. You should assume that October will underperform its forecast, also; September was the worst contract-writing month since that one in 2001. However, perverse good news: At street level it is clear that psychological damage is worse than actual loan-denial. New-home sales are based on contracts-written, not closed, and the cancellation rate is running 30-50 percent. Builders are not “clearing inventory”; they are still building it and then dumping it at market-wrecking discounts — more than 10 percent of the gross revenue for some. Nothing would help housing more than the failure/merger/mothball of as many national builders as possible. (more…)

As reported in The Bellingham Herald, the availability of subprime loans made it easier for poor people to borrow money in recent years, but that borrowing may have hurt more people than it helped, University of British Columbia geographer Elvin Wyly said Friday. Wyly, who spoke at Western Washington University, has researched the geographic concentration of the impact of subprime loans and the upswing in home foreclosures that followed. That research showed the greatest impact tends to be in black and Hispanic neighborhoods and regions. Blacks and Hispanics are almost twice as likely to have higher-interest subprime loans as other groups, he said. Today, Wyly noted, subprime loans are being blamed for billions of dollars in losses to everyone from homeowners to big Wall Street investment firms. Some have estimated that the eventual total lost wealth from the collapse of the subprime mortgage industry could be above $2 trillion.

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A reverse mortgage is a loan where the lender pays the mortgagee a lump sum, a monthly advance, a line of credit, or all three while the individual(s) continue to live in the mortgaged property. To qualify for a reverse mortgage, the applicant must own the property and all owners must be 62 years of age or older. The amount that can be borrowed is generally based on the applicant’s age, the home’s value and the interest rate the lender is charging. Funds received can be used for any purpose. Reverse mortgage loans typically require no repayment for the term of the loan, but must be repaid in full, including all interest and other charges upon sale or death. Reverse mortgages may have tax consequences, affect eligibility for assistance under federal and state programs and have an impact on the estate and heirs of the homeowner.

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Beautiful Wilkes County NC Executive Country Club Home.

MLS Number: 51211 List Price: $359,000

Bedrooms: 3, Full Baths: 2, Half Baths: 1, Est Total SqFt: 3425+
Type/Style: Tudor, Two Story, Area: 6
Elementary School : Moravian Falls Elementary
Middle School: Central Wilkes
High School: Wilkes Central

Construction: Brick Veneer & Other, Solid Masonry Foundation: Basement, block & brick. Roof: Shingle - Composition, Two Years Old, Floors: Carpet/Hardwood/Tile
Garage/Carport: Garage-Double Attached
Interior Features: Smoke Detector(s), Ceiling Fan(s), Newly Decorated, Painted and Carpeted, Central Vacuum, Large Master Bedroom, Walk-In Closets, Hardwood Floors, Basement, Two Fireplaces (Rock and Brick), Gas Logs, Workshop in Basement, Walk-in Cedar-lined closet, Formal Living Room, Dining Room, Den with Oak Bookshelves and Cabinetry, Cable TV w. broadband Internet

Exterior Features: Tiled Patio/Deck and Walkways, Very Private Yard, Level Lot, Set Back From Street.
Subdivision: Farmington
Lot Size: 1.14 acres

Contact Elizabeth Carter, 336.973.5594 or Greg Stikeleather, Broker, 704.880.5247 or email eacarter@charter.net

click here for more information

Seniors apply for a reverse mortgage for all manner of reasons. There are some folks who need the funds to make their financial life easier, but there are many who simply want to enhance their current lifestyle. There are important points to consider about reverse mortgage and the homeowner doesn’t need good credit to obtain a reverse mortgage. The proceeds do not affect your Social Security, Medicare, or any other benefits you receive and the proceeds are income tax free, because they are not considered income.

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Most mortgage professionals indicate that the next generation of subprime mortgages will look much different than the loans issued during the height of the housing boom. Many argue that subprime lenders have been very successful in increasing homeownership rates by creating liquidity and offering credit to those previously denied loans. Many are looking to the Federal Housing Administration to step into the subprime void. Several proposals in Congress would expand FHA lending authority, allowing it to come to the rescue of subprime borrowers struggling with their current mortgages. The FHA, which provides government-backed mortgage insurance on low-down-payment loans, is in a good position to address the subprime market.

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search for : mortgage, subprime mortgage, Federal Housing Administration, low-down-payment loan

High home prices meant that a large percentage of buyers overextended themselves to get into a home. They may have taken out mortgages with low initial interest rates that later reset much higher, counting on rising prices to allow refinancing at lower rates. But when home prices fell, those situations disappeared and the risk of delinquency jumped. That’s what’s happening in many coastal states where property once appreciated at prodigious rates. In addition, high risk markets have foreclosure rates and fraud and collateral risk indices three times the national averages. High risk markets also have job issues such as high unemployment of low wages and wage growth, all indications of economic stress.

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search for : risk of delinquency, foreclosure rate